Vladimir Putin, Russia’s powerful Prime Minister, has launched a swinging attack on Western financial rescue packages, calling for no less than a new world order to reserve the global financial crisis.
business.timesonline.co.uk
On his first visit to the World Economic Forum in Davos, Mr Putin said the crisis was a “perfect storm” that had arisen from a world dominated by one power, the United States, and that only a rebalancing of global power could cure the problem.
He warned that extravagant financial stimulus packages of the kind agreed by Washington and London could lead those countries down a path well-worn by Moscow, while doing little to aid a global recovery.
“Interference of the state, the belief in the omnipotence of the state: That is a reaction to market failures,” Mr Putin said in his keynote address at the opening of the four-day meeting. “There is a temptation to expand direct interference of state in economy. In the Soviet Union that became an absolute. We paid a very dear price for that.”
Mr Putin’s speech came as Russia announced it was halting plans to deploy missiles in Europe as a gesture of goodwill to the Obama administration. Moscow had begun to deploy the missiles in the Baltic as a reaction against the former Bush administration’s decision to forge ahead with a missile defence shield in Eastern Europe.
He offered an olive branch to Barack Obama, saying: "We wish the new team success.” "I hope they are willing to cooperate constructively," he added.
Mr Putin’s main theme was the strengthening of multilateral cooperation to tackle not only the financial crisis but conflicts like the recent war in Georgia and the Israeli assault – a theme that echoed earlier calls from Kofi Annan for an overhaul of international institutions like the United Nations Security Council to better address the needs of an interconnected world.
There was a danger, he said, that aggressive military action was being used by countries as “another way of distracting from economic situation.” In solving these regional disputed, he said,” multilateral institutions turned out to be as ineffective as financial institutions.”
“We cannot rule out this happening in future,” he added.
The underlying theme, however thinly veiled was Russia’s return to pre-eminence as a world power as a result of the diminishing America clout that might result from the global meltdown.
On the need for energy independence and security, Mr Putin proposed the expansion of Russian gas and oil supplies to Asia and Europe – a description that might surprise the Baltic States denied power by Russia’s Gazprom earlier this month.
Mr Putin call for the expansion of the range of reserve currencies and the diversification of financial centres was an assault on the historical pre-eminence of the US dollars and more recently, the Euro, at Russia’s expense.
Mr Putin also talked for the need to stabilise oil prices, a reminder of the damage that plummeting crude prices have done to the Russian economy – and to Mr Putin himself, who is constantly rumoured to be plotting his return to the Kremlin, and who has seen his own popularity come under unprecedented assault due to Russia’s economic woes.
Russian military commanders recommended late last year that Moscow should consider scrapping plans to update its nuclear arsenal in order to properly fund its ailing conventional military. Many analysts see Moscow’s offer to stand down its missiles not so much as an act of goodwill towards President Obama as the result of a simple cash flow problem.
“Militarisation does not help solve problems,” Mr Putin told the audience. “We are against spending more money on military efforts." Mr Putin’s comments on the dangers of state bailouts, however, were well-received by many analysts at Davos, who have warned that stimulus packages will fail without a coordinated international response by the G20 and even the UN to bring in global regulation.
It was an ebullient performance for Mr Putin’s first appearance at Davos, a depressed, chagrined version of its former glittering self. The US is thinly represented here, with President Obama clinging on to his team to steer through his bailout package, and many American bankers who usually attend out of work or grounded.
The appearance of the Chinese Premier, Wen Jiabao, and Mr Putin on their first visits to Davos, underlined the shifts in global power that the Russian leader sought to highlight.
He drew laughs for his descriptive mockery of the failure of business leaders to predict the crisis, saying: “As winter comes to Russia unexpectedly every year, it happens this time again with the global economy.”
He bristled, however, at the suggestion that Russia could be helped to build on its technology advances by the outside work. “We are not an invalid, we don’t need help,” he growled. “Pensioners need help, development countries need help, we do not need help.” |
