Dealing with Fundamentals

Yesterday’s Cato Institute seminar on Russia’s energy policy was an informative event, which set off the views and personalities of two contrasting discussants who none the less share a common perspective on the issues concerned. Robert Amsterdam’s contribution was an impassioned appeal to Western political and economic forces for a realistic and ethical appraisal of the processes now underway in the Russian Federation with regard to the limiting and eradication of democracy and democratic freedoms, while Andrei Illarionov presented a drier, sardonic and more analytical approach to the same issues, revealing the ways in which the Kremlin has begun to use economic and energy leverage to influence Western policy-making. One got the overall impression that while the Soviet Union may no longer formally exist, the Soviet approach to global politics is still very much alive in the thinking and practices of the Russian federal government.

One of the most interesting and compelling statements came not in the talks themselves, enlightening though those were, but in Robert Amsterdam’s reply to a questioner who wanted to know about the current state of U.S.-Russia relations. As a Canadian citizen resident in Europe, Amsterdam is able to offer a North American perspective that comprehends, but doesn’t necessarily endorse, the position in which the United States and Europe now find themselves where Russia is concerned [my transcription]:

As far as I’m concerned, of the big-picture items geopolitically between the US and Russia there is nothing actually bigger than rule of law, the WTO, the entire transnational system of international laws and treaties and for Russia and Europe and the US to obtain a common grammar in respect to those. That’s the most important thing. Because Russia cannot mobilize its resources without it. Russia cannot continue its disaggregation policy with it. And once Russia signs the Energy Charter, and Russia has to agree to transit gas, we’re going to be in an entirely different energy world, where something called competition may actually evolve in some of these markets, and that is going to help in terms of liberating people, and it is going to help in terms of, in fact, putting Russia back on a better road in terms of democratic freedoms.

I think what we’re seeing right now has been many American politicians attempting to close their eyes to the reality of Russia because they think, in respect to Iran or North Korea that Russia somehow geopolitically is on their side. And as I said when I spoke, they’re wrong - the concepts that are coming out of Moscow, and there’s a recent paper that’s just come out called The Likely Scenario of Action of the United States towards Russia - there’s a tremendous well of hostility towards the US among the siloviki who have become very powerful in Russia. And there’s a false game in terms of many of these American politicians who believe, somehow, that by the President and Mr Putin getting along, all of a sudden the world is going to be light - it’s not going to be how it’s going to happen. We’ve got to deal with fundamentals. We can’t deal with isolated issues. And we have to have a negotiating table with Russia where the hard issues or and about Russia are addressed. They can’t be obfuscated. And that’s why I’m saying the way to do that is to begin today to focus on those Western banks that are the complicit players in this geopolitical game. Because as far as I’m concerned, these banks have become political actors. And they are unsupervised, and their goals are short-term profit maximization at the expense of rule of law, and that doesn’t work in a market economy. You can’t have what I call “constitutional dumping”.

Update: It's now possible to download a podcast of the entire event from the Cato website. The video of the discussion can also be watched there.