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What, no Evian for Putin at G8's
table?
By Peter Lavelle
MOSCOW - Looking back, it was never really made
clear why Russia was invited to become a member of the
G7 in 1998, transforming this exclusive group into the
G8. Was it a token of respect recognizing Russia's
former great-power status? Was it a personal favor from
Bill Clinton to bolster Boris Yeltsin's hopes to reform
Russia during its rough and tumble experience with both
democracy and capitalism? Asking the question why Russia
is part of this group of countries never really seemed
important until a few weeks ago.
About a year or
so back, Russia's ambiguous relationship with what was
then the G7 appeared to be normalized. Even after being
invited to join the club, Russia had remained outside
the decision-making process that concerned financial
issues, the rationale being that the original seven
members had come together because of their economic
wealth and that, though Russia is rich, its economy
remains underdeveloped. For the most part, this
deficiency was put aside during the Kananaskis summit
held last year.
This was possible for at least
two reasons. First, what was called the G7 does not
really have a formal application process for membership.
It is a private club and has its own internal list of
rules and regulations. Second, it appears that the most
powerful member of the group simply decided that it was
time to let Russia in. After all, George W Bush's
newfound comrade-in-arms in the war against terrorism
was present - Russian President Vladimir Putin. Looking
back to one year ago, the reason that Russia was invited
to the club in the first place starts to make sense. It
had little to do with Russia's economic condition: Its
political attitude toward the United States appears to
have been the litmus test. The same test - though
possibly with a different outcome - appears to be
operative again today due to the differences Washington
and Moscow have had with respect to the war in Iraq.
Over the past few weeks, several international
media outlets have reverted to using the name G7 again,
particularly in reports ahead of the meetings of finance
ministers in Washington little over a week ago. It was
then that US Secretary of the Treasury John Snow
distinctly referred to the G7 within the framework of
financing the rebuilding of Iraq. At almost the same
time, and halfway around the globe, Putin specifically
referred to the upcoming meeting of G8 leaders, which is
due to be held in Evian-les-Bains in France at the start
of June. He was speaking at a news conference after
meeting with German Chancellor Gerhard Schroeder just
prior to a dinner engagement between the two leaders and
France's President Jacques Chirac.
The message
coming out of Washington could not be clearer. While it
appears that no one really desires to part with the
improvement in US-Russia relations we have seen over the
past 18 months, it is also obvious that few on Capital
Hill are in a mood to do Russia any favors in the short
term. The Bush administration seems to have delegated
some members of Congress to express displeasure with
Putin and even threaten Russia by revoking its status in
the G8, while core issues like US-Russia energy
dialogue, international security regarding the Caucasus
and proliferation of weapons of mass destruction will
move forward unhindered.
The US Congress has the
power to hit Russia hard - and senselessly. With Bush's
undoubted approval, there appears to be little hope in
the short term of changing US legislation that would
fast-track Russia's integration into the global economy
and removing trade barriers and long-standing, out-dated
amendments like the Jackson-Vanik that have serious
implications before Russia can be granted
"most-favored-nation status" for bilateral trade.
American threats against Russia in the realm of
economic relations are a mistake. American attempts to
punish Russia's economic development because of its
stance against the Iraq war are patently
counterproductive for both American and Russian business
interests. Mutual engagement is in both countries'
longer-term economic and political interests.
The International Monetary Fund and the World
Bank are both right (for a change) when they observe
that Russia's economy is bursting at the seams, with
first-quarter growth of up to 8 percent due to the
influx of petro-dollars - because of which real reform
of the economy has been allowed to be conveniently
ignored by the government of Prime Minister Mikhail
Kasyanov.
US engagement of Russia can help force
Kasyanov to rethink his priorities. As things stand now,
because there is no compelling reason to do otherwise,
Kasyanov's vision for Russia is a replication of the
South Korean chaebol economic order, with foreign
investment in the country aimed only at a very quick
return on the dollar on the back of quick and dirty
asset plays. Decisions made by the US Congress can help
Russia enter the world economy in a way that will make
long-tern investment in the country's booming economy
not only profitable for all involved, but also legally
sound. This is the crux of meaningful international
economic integration.
Russia's continued G8
membership could still make this happen - eventually.
Perhaps Russia did become a member of this exclusive
group of powerful, rich countries for the wrong reasons.
But denying its place among the VIPs of the world now
would be an even a bigger mistake. Not serving Putin his
glass of Evian at the upcoming summit would be an
exercise in petty revenge due to emotive events of the
moment.
Anyway, considering the circumstances,
why should Bush himself expect to be presented with this
simple liquid of French entrepreneurial genius? Russia
is developing a sober view of the world - can that be
said of the United States?
Peter
Lavelle is a Moscow-based analyst and author of the
weekly e-newsletter "Untimely Thoughts".
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