Potemkin Economics? And a wry aside way off topic…

A friend and colleague points me to remarks made by Prime Minister Victor Zubkov, at a meeting with the management of the Syktyvkar timber processing business:

"You are in great luck - you run your business in the most stable country. The financial crisis [elsewhere] in the world will, of course, affect the operations of many enterprises abroad.

“You work in a stable country, with a stable political system, stable taxes: that is why your business is on the way up"

And who can blame the Russians for enjoying the economic weakness of America, as they also take advantage of US foreign policy log-jam in Iraq?

But two sets of stats out of Russia give pause for thought and remind us that Potemkin economics is never far away, as a risk. Beyond hydrocarbons – whose pricing can be highly volatile if world demand falters on US consumer-led recession, not least in terms of demand for Russian raw materials from China – I think that the big economic risk for Russia 2010-2015 is that the manufacturing base won’t cope with burgeoning demand and that this will see the benefits of consumer demands leak away to overseas manufacturers.

The early signs of this may already have begun, if the Institute for the Economy in Transition is to be believed (noting, of course, that the IET is a vehicle for Yegor Gaidar, whose views are hardly neutral). At the same time, Russian wage inflation continues to soar; way out of kilter to GDP growth.

This is good, at this stage of the election cycle, for the ruling elite to shoe-in Dmitry Medvedev as President, on a landslide victory. In the long term, however, the combination of soaring wages and manufacturing capacity growth seriously lagging behind, leads to structural mess in supply side economics, and doesn’t bode well for President Putin’s laudable, long-term economic ambition: diversification of Russia’s economic base (away from oil, gas and metals).

An increasingly wealthy, free-spending Russian consumer is good electoral politics – and makes the retail sector and retail/warehousing real estate a strong buy – but it may lead to economic gains being lost to ramping inflation.

Now don’t get me wrong. Russia in 2008 will still bring in one of the world’s best GDP growth performances in 2008. But it won’t be entirely unaffected by the recession in the USA and Europe. For the reasons mentioned elsewhere, I would guess GDP growth in 2008 will come in under the Russian government’s forecast of 6.4%: I would say closer to 5%. Inter alia, this does suggest a tighter leash on P/E-led valuations for stocks on the Russian stock exchanges.

Off topic?

Ah yes. The humiliation and fall of UK Conservative MP, Derek Conway (who decided the public purse was a good way of ‘keeping it in the family’ and whose political career began its death tonight).

Some years ago – when he was between seats in Parliament having lost his seat in the 1997 UK General Election, he was casting about for a job in political lobbying. Not getting one he decided to go it alone. At the time he said: “I have met these New Labour Consultants and basically all they know how to do is pour gin & tonic for Peter Mandelson” (approximate quote as I can’t find the original).

He was talking about me.

The prat had come to me for a job and – not thinking much then of his brain or his understanding of what people like me do for clients – I politely sent him on his way. His sneering comments came a week later and, Tory mates at Westminster (I had, and have, a few bizarrely) pointedly said he had me in mind...

Well now, mate, you can pour me a G&T.

In pursuit of further randomness

At 04.00 am the snow-plough that helpfully clears our streets of this weekend’s heavy fall slightly prangs the Lexus parked below my bedroom window: its owners sleep more heavily than me so I listen, sing-songly, to the car alarm for 24 minutes (2 ½ minutes of alarms, in nicely varying tones, followed by a thirty second interval of silence, before it starts all over again).

As the snow-plough withdrew, taking what I guess was a fender with it; it made a soothingly crunching sound…

So, 04.09 am, I find myself thinking about ruble re-valuation – apropos yesterday’s post – it comes to me that there is a very good reason for Russia to re-value.

The Ruble is storming in the forex markets; and structurally has lots of strength to come. Russia hates the US dollar ideologically and, given its last four years’ performance against the RUR, Russia hates it financially as well.

An OPEC-for-gas between Russia, Iran and Qatar (that gas-field with a flag) is looking more likely. But would they want to price gas in USD? They would not. If you had an OPEC-for-gas it would be their choice as to their pricing currency. The Euro is a possibility, but ideologically, the Euro is hardly more popular with either Russia or Iran.

Why not piece gas/MMbtu in Rubles? You revalue the Ruble – at, let’s say 1 RUR = US$4 – and then it makes a good reserve currency for gas. And Iran would love it. Qatar would not object. Ruminations on Russia had a pithy comment on why an OPEC-for-gas should not work; but since when did economics get in the way of ideology?

And why not change the reserve currency for oil? You see Venezuela complaining? (actually, I think China and Japan would, so scrap that). And friends in the Gulf tell me the Emirates and Saudi are sick of their currencies, pegged to oil prices of course and therefore to the USD, slip-sliding as well.

The Ruble as the reserve currency for hydro-carbons? Oh yes. Definitely a possibility. And a *huge* political win in Russia. Instant hero-status for a newly-minted President Medvedev: “Russia *is* the beating heart of the world economy” etc. Fab spin.

Separately, a great brokers’ note from RenCap today, on matters Ukrainian:

“The government has prepared a decree allowing customs and the tax service to countermand 'illegal' court rulings….

“The aim of the new measure is to reduce corruption in the judiciary, sending a message to bribers that the rulings for which they pay will not be enforced, and to judges that they will be held more accountable in future.

“Though the intention is laudable, we think any measure that allows court rulings to be ignored, no matter how exceptional the circumstances, is a fundamental threat to the rule of law and gravely misguided. Unless the government provides substantial clarifications as to how its idea will work, it risks sending the wrong signals to the investment community and electorate alike.”

Personal experience reminds me – having had a client on the shit-end of this stick – you can buy a Ukrainian Supreme for about $50k a decision. Remind me, why was the Orange revolution such a break with the past?

Democracy, with out an independent judiciary, is not progress at all. There is no democracy without rule of law. And there is, literally, more rule of law in Russia.

Blogging tonight in my usual haunt – memo to self: sort out home Wi-fi – I can barely hear myself think. There are only 11 people in the bar. Six of them, sitting together, are damn near shouting. Every other word is ‘f******’; they are drunk and being staggering sexist; indifferent to the fact that all the staff speak fluent English. These are braying, arrogant, appalling expats: 40 minutes in their company and I am coming round to Zhirinovsky’s POV.

PS: if you are about to do business with CB Richard Ellis in Moscow, tell them to have their boys learn how to behave when out in public (the downside, boys, of loud, drunken conversations is we know who you are!). Although illuminating to hear one of you say: “I won’t get out of bed for any deal worth less than 1,000 sqm to me”; which at current market rates I calculate is about $83,000. Tossers!

Three more random facts of life in Moscow

There’s an open-air pop concert on Pushkinskaya right now. Of course there is! After all, it is only minus 3 out there. I am blogging at the bar of Scandinavia: my internet router at home has died and I am taking advantage of their free (and fast) Wi-fi. While down the street, on Tverskaya, by the old Telegraph building, the regular rock band is holding its weekly impromptu concert; it draws a hardy but enthusiastic following which somehow manages to dance despite the lethal sheet black ice all over the sidewalk today.

Separately, rumors from two sources (one close to the CBR) reach me that, in April, the Central Bank will revalue the ruble. By 100 times! (this would be the eighth 'modern' Ruble.) This has been whispered before and April would make perfect timing. How better for President Medvedev to settle in and underline Russia’s roaring new strength than tell people ‘the new Ruble is worth US $4!’ (and would buy GBP £2). We’re talking new banknotes here, of course, rather than an excuse to place a big play on the forex markets.

Of course, ever trying to seek the underlying meaning of things – and you know you’ve been here too long when you do that about everything – I wonder whether such an announcement will be tied into a development about that much-heralded Federal Union of Russia and Belarus. And if that happens, then what will VVP plan to do then (new constitution, new career possibilities?)? Well, I'll stop theorizing there…but the next Belarus-Russian summit has just been announced so…

Anyway, finally, Friday we eventually had our staff ‘Old New Year’ party. I let the choice of venue / event / format down to the team (my job is just to pay the bill, after all and it is *their* night). In other countries, staff parties have tended to be of the dinner/dance variety. But my team – a quietly studious lot in the office (yeah, right) - like to party when they let their hair down.

Last year was a raucous affair in a Cuban dive off Taganskaya Ploshchad: with, I gather, the dedicated hard core partying until dawn, fuelled on absinthe, so I hear. Suggestions for this year included taking over a banya (an idea which I quietly, desperately, vetoed). They opted instead…for a karaoke extravaganza.

Oh well.

Actually it was huge fun. They had booked out the slightly Ottoman-looking ‘VIP’ lounge at the Jelsomino Café on Petrovka Ulitsa. Made famous by the fact it was ‘graced’ by Paris Hilton that extraordinary time when she was paid $2 million dollars to visit Moscow for Fashion Week. Completely sound-proofed from the public club, it is way cool and unambiguously ‘lounge-lizard’. When I did venture out public-side, for a toke on a sly fag, there were clearly some wannabe-boybanders out for a vocal warm-up.

It is the classic New Moscow yuppie night out (I am sure there is a better word for such a nomenclature, something more authentikny: does either reader know one?).

The evening featured:

- VIP room draped in silk everywhere
- Bottles of Irish whisky (my team are so cute they know how to get to my good side) – actually only in Moscow do I consider it perfectly normal to order whisky by the bottle; like those Saudis I used to know who holidayed in Lebanon when I was there. Obviously everyone was drinking whisky because there seemed to be three bottles on the bill. Martini Bianco seems to be the ladies’ weapon of choice
- Vast plates of sushi: actually the rice-green fish roe-eel thingy was disconcertingly tasty
- The singing. Oh yes the singing: the guys are all very talented at what they do but, boy! half of them could seemingly be entrants into ‘Russian Idol’ (dance moves included).
- Party games (yay). My guys love ‘em!

I like to think my 01.00 exit was still dignified. I did just once sit back and watch them have a ball and think “gosh, they are wonderful”. Four years ago there were just six of us (none too brilliant the crew I inherited and I out-placed and re-hired PDQ). Now we’re 30-odd. I have been running teams doing what we do for 12 years: and this lot, of all the teams in all the countries… well, when the time comes, I will miss them a lot.

Why Kosovo should not become independent: and how Russia is not helping Serbia’s cause

Today I was more than mildly amused by this piece in the alerts I receive from http://www.businessneweurope.eu/; the actually rather good news service I subscribe to for central and eastern; south eastern Europe; Russia and central Asia:

Hollywood stars to back Serbia over Kosovo
Bne

Hollywood stars George Clooney and Sharon Stone have voiced support for Serbia's attempt to retain control of the breakaway province Kosovo, according to a report by Serb language German daily Vesti.Clooney said "I will, with my colleague and friend Sharon Stone and her childhood friends, who are of Serb origin, organize a protest soon over the attempt to have Kosovo declare independence," the paper quoted him as saying. The Serbian news agency Tanjug reported on January 21 -- citing unnamed foreign media -- that two other stars, Sean Connery and Richard Gere, have also voiced support for Serbia's case.-18-240108

[Incidentally, the great thing about BNE is the investment banking, banking and corporate newswire service it has. Its political commentary, while colourful, is I find a little more eccentrically hit-and-miss].

It is often pre-supposed that all Westerners support independence for Kosovo. Not true.

This is not because I am slavishly pro-Slav: the pan-Slav political bloc, as a cohesive geopolitical force, has raised its paranoia to an almost psychotically delusional level. The world is not pathologically anti-Slav. Moreover, not supporting an independent Kosovo is not, for a scintilla of a moment, to excuse the appalling behaviour of the Milosevic-era Serbian state in the 1990s. NATO was right to intervene as it did in 1999. Still, it is nice for once to be on the same side as some liberally-minded celebs...

Breaking the world up into ever smaller and smaller micro-states, based on ethnicity, is not a sensible way forward. It only serves to enhance ethnic and religious divide in the world, not establish sustainable cohabitation. Microstates:

- Find it more difficult to protect citizen interests against the behemoths of global super-sized corporate giants
- Generally suffer in global capital and foreign exchange markets
- Find infrastructural investment more difficult and more costly per unit
- Over-spend on central government services as a proportion of GDP and yet, paradoxically, find their ability to fund social and welfare programs more compromised
- Are more vulnerable to global economic shocks
(And these were just the reasons I pondered on the Metro home tonight).

In the giddy heyday of the post-Cold War era, we were all (I think) much taken with the concept of soft power over hard power. As Britain is finding in its relations with Russia today, soft power doesn’t work: it is no power at all. Dividing Europe into ever smaller and smaller pieces – and this applies just as much to ETA-conceived Catalonia; and to other would-be secessionist regions - only serves to weaken the voices of European citizens, not to strengthen it. It goes against the grain of developing a multi-polar world and, frankly, only America stands to benefit.

Russia and China – not only for the obvious reasons of Chechnya and Taipei, respectively – oppose secessionism. But for Russia this is a rather… er… nuance-lite argument based on Slavic nationalism, religiosity and, in short, a ‘grand plan’ spoiling of US and EU/NATO policy in the Balkans (‘Russia getting back into the Balkan game’). It is hardly noble: nor, to date, terribly effective.

A much more reasoned argument for Russia – using both hard power and elusive soft-power – is to demonstrate the constructive benefits of keeping a unified Serbia. Which, BTW, includes the Russian government stepping up to use its now vast wealth for infrastructural and industrial investment in Serbia, including in Kosovo: on an ethnically-blind basis. Allowing Gazprom to buy Serbian energy monopoly, NIS, is not what we’re talking about here. We’re talking structural, long-term macro-economic aid.

It would make a nice change for Russia to be someone else’s deep pocket of last resort; rather than relying on the EU/EBRD. Ultimately, Serbian policy, over the long-run, will follow the money. Selling off energy assets aside, Russia shouldn’t be too surprised if a weakened Serbia has no option but to follow an EU/NATO track (because enlargement-era history shows you can’t join the former unless you’ve joined the latter).

There is a good case to make for keeping Serbian intact: but Russia isn’t making it.

Old warriors rattle nuclear sabre

Well it didn’t take long for the West to match the Russians in their willingness to use nukes preventatively did it?

Russian war-planners will go ah-hah! Especially given that one of the authors is this manifesto is of Georgian heritage. But this isn’t about Russia. It’s about Iran; where the key facility may be too big and too deep underground to be taken out by conventional bunker-busters.

Mapping the 2007 State Duma elections: turnout analysis

A friend and colleague showed me the above chart which has been bouncing round the Russian blogosphere this weekend. It shows, along the bottom, percentage voter turnouts, against the number of constituencies.

Your eye might first be caught by the far right of the chart: the number of constituencies reporting over 90% turnout. Well, my colleague points out, that this is not so unusual actually. In some parts of Russia there would have been near ubiquitous turn-out: far-flung military bases being a good example (which form tiny constituencies all of their own).

No, the interesting thing to note – and this data comes from the Central Election Commission’s own stats – are those little peaks: around 60%, 70%, 80% etc. in most non-compulsory election systems you would expect a normal distribution (or bell) curve; peaking around the 50-60% mark. The peaks around some fairly…um … ‘headline’ numbers are interesting.

There have been some snarky comments about this in the Russian blogosphere. I won’t comment: not least as I am reminded that, in Russia, it is a criminal offense for foreigners to criticize the government, state, church or cultural institutions. Said colleague may have been tempted to post about this on our corporate blog, which sadly I would have to veto: that would be the wrong sort of political development for our corporate blog to discuss. Either reader, though, looking at the chart, may care to draw their own conclusions.

Gathering mushroom clouds...

It is not exactly heart-warming when the head of the Russian army goes on State TV and tells the Russian population: "... to defend the sovereignty and territorial integrity of Russia and its allies, military forces will be used, including preventively, including with the use of nuclear weapons..."

This will, in tomorrow's Western media, cause quite the storm; especially in the UK where everyone is now rabidly Russophobic. The excellent blog Russian Strategic Nuclear Forces suggests that this is because Russia is feeling more isolated and vulnerable.

[The picture above, BTW, is a Topol M ICBM, or RT-2UTTH. NATO IDENT: SS-27]

Russia feeling insecure is becoming a rich theme at present. Rupert Wingfield Hayes, one of the BBC's better correspondents in Moscow, broadcast about 'Russia's inferiority complex' just before Christmas. Personally, I struggle to understand why Russia should feel inferior - its got Europe by the gas-guzzling balls; is likely to be one of the few economies to experience GDP growth in 2008 - although perhaps less than the government reckons it will achieve - and has wrested political stability from the edge of fracture and chaos. But perhaps the key is that - in Presidential election year - it is thought that the people need to be reminded they have enemies all around them and would be under threat if not for the might of the state. Of course there is no real truth or necessity to this statement: but it is good domestic realpolitik. Especially if Ukraine pours fuel on the fire of Russo-Occidental relations by pushing NATO membership.

Personally, I think NATO membership for Ukraine is bad for both Ukraine and NATO, let along Russia. RIA Novosti published an interesting comment piece on this last week, which I think gets it about right.

Speaking of Ukraine, the excellent English-language blog on Ukrainian politics, Foreign Notes (which is worth reading, despite the very crappy template it uses) has just flagged the latest paper from the Defence Academy of the United Kingdom which has published Russia and the West: a reassessment. You can download it. It will be my bedtime reading tonight, but I think it starts spot-on:

"A powerful Russia... is a fact of life... They are no longer seeking [the West's] approval... The post-Cold War partnership, founded at a time of Russian disorientation and weakness, is history.

"...Although Russia is not a global threat, it seeks to be both enabler and spoiler. It will exploit our difficulties in Iraq and Afghanistan and leverage its influence in Iran to diminish Western influence in the former USSR, where it will use both hard and soft power to resurrect its dominance." [my emphasis]

Recently, there has been some colourful talk in Moscow about the 'resurrection of the USSR by 2010' (I gather radio Ekho Mosckviy ran a talk-show on this) and I have even found a delightfully barking blog dedicated to this idea. I am not sure I buy the remake of the USSR, but I suppose a lot of Cold Warriors will be feeling nostalgic today.

I think it was my mate, Talleyrand, who first said: "Russia is never as strong as she looks; Russia is never as weak as she looks". Which not so long ago, President Putin amended this to comment: "Russia was never so strong as it wants to be and never so weak as it is thought to be."

Too true. Nukes are of course central to Russian defence if, for a moment, you consider how the military top brass struggles with a largely conscript army of uncertain efficacy where, apparently, it is proving harder and harder to boost the number of contract soldiers.

[The map above is from the Natural Resource Defence Council, those cuddly US-greenies. It is what they call their 'US playbook for nuclear attack'. The blue dots are de-commissioned missiles silos, the NRDC claims to have tracked from de-classified US military sources concerning nuclear attack targets. The red dots, they say, are the sites of 360 operational nuclear silos the US has pre-programed as targets, according to declassified sources. But as I recall, most of the Russian nuclear missile capability is road-mobile or submarine based: precisely because the USA has so many of the land silos identified.]

Time to remember where you put all your suitcases?

I think the commentators at (snazzy new look) Siberian Light have got it about right when they say that, however London tries to spin it, the closure of the British Council offices in St Pete’s and Yekaterinburg is a slam-dunk victory for the Russian government.

From the very first it was clear that, closure having been ordered, there were never going to be any circumstances under which the British Council would be allowed to keep these outfits open, in bald defiance of the Russian government’s orders.

Seen from the perspective of us Brits living in Moscow, this looks like a classic UK New Labour spin doctor’s game: adopt a position certain to provoke a Russian reaction and then pretend to ‘take the moral high-ground’ and spin out how – while not conceding Moscow’s point – London has shut down the two complained of offices (as initially instructed) ‘in the interests of staff safety’. It is exactly how I would have played it. As chess moves go, there have been no missteps here, by either side. This game has played out in a way that each side can exploit to the full.

It is clear though that Official Russia – and the tabloid storm it whips up – would gladly like now to see some Brits in the private sector expelled, thus to enforce the idea that Britain has sent enemies into Russia, far and wide across the country. I think that will be next.

This is purely a personal observation, for which I have no empirical evidence, but it seems to me there is more than the Litvinenko thing going on here. I suspect the Russian government has good reason to suspect a substantial upsurge in UK SIS activity in Russia.

That said, and less melodramatically, even the British Council’s best friends would say that some of their cultural programs were sailing very close to the wind. I was slack-jawed, at a private lunch with BC managers last year, as they described their support for Chechen activists…sorry… theatre groups. To be fair, one BC manager privately conceded to me that they needed to tone down the politics of some of the arts programs they were supporting. It seems they didn’t do so soon enough.

My sense of unease today was not helped when one staffer, with FSB mates, warned me: “I’ve been told that all British citizens resident in Russia are being reviewed by the FSB”. Needless to say, as someone who – as it says at the top of this blog – is ‘An Englishman in Moscow, whose life is a slalom between the attitudes, aspirations and realities of modern Russia and the prejudices and politics of the West’ – one feels the tiniest bit exposed…

Three random facts of life in Moscow

Visa hell. And although my bosses say ‘steer clear of all admin, refer it all to HQ’, I am sucked into it…

Not mine. New hires and the other expats. My Chief of Staff is complaining at the document load – and the cost – for six expats. The problem is magnified because we are changing from one legal entity to another – in the West this would be a quick paper-trail exercise: in Russia of course it means cancelling existing permits and visas and starting all over again. To compensate I have vetoed a Russian hire I would otherwise have done this side of summer. I am nothing if not budget-management boy…

We estimate it’ll cost about Euros 3,000+ in legal fees each for work permit renewal / initial grant; and about 3 person-days of admin for each one. The most painful, interestingly, is for a Lithuanian (but one well worth the hassle); and for a US hire who already has a work permit, but I have poached from a local competitor. So, again, the process starts from scratch. Oh, if only Russia had Green Cards…

In the light of HM’s Ambassador’s latest ‘up yours’ to Russia, one colleague – a dual-nat – I have told to switch her work permit / visa application from her UK to her Irish passport. And resolve not to hire more Brits. Apropos of which I curse myself for rejecting the chance I myself had to be a dual-nat: then to avoid the other country's national service. Ironically, I now think I would have been a much better person to have been in the services and wish I had done so. Strange huh?

Russo-UK relations are only going to get worse not better, so prudent risk management means reducing exposure to UK nationality staff where we can. Once again, I ponder that I could do my job just as well based in lovely Kyiv: it is time to give that move much more serious thought…

In passing, I no longer understand what the UK government is playing at with its approach to Russia – apparently ‘diplomacy’ is no longer a New Labour requisite for the FCO.

Having been fair summoned to my mother’s sixtieth birthday* party at the beginning of February, I have been searching for a cheap way home (ideally in and out the UK in three days). Nah…

[* I was an…er…unexpected present at university]

Searching for even economy fares to fly to the airport in the North – where our English house is – airlines want absurd amounts to do a Moscow-[via]-[Northern England]-[via]-Moscow flight (Air France wanted $3,000 – in economy????). And then the scheduling proved impossible. OK, I thought, fly to London and take the train for the weekend trip… um…no. UK rail does ‘engineering’ on Sundays so the usual 2 ½ trip would take…five hours. If only RZhD ran Britain’s railways…

It would have been a third of the total cost – and much better weather – if the party had been held at our French place. North Yorkshire? In February? Go figure.

So locking into a ludicrous schedule – into London Thursday night from Moscow; train ‘oop North’ Friday morning (in time for the sacred party, at which all my mother’s Slow friends will attend, but let’s not use the word gruesome); train to London Sunday, fly home Monday. Three days’ leave.

It will be interesting, though, to see which of my half-Step siblings turn up…

Tonight I was surfing the schedules of the Moscow opera and ballet companies I like. Q1 looks like the most tedious schedule I have ever witnessed. I trawl just four things to go to between now and the end of March. Four? In 2 ½ months?

It is not helped by the fact that I have now, it seems, seen everything – I mean *everything* - currently in repertoire at the Bolshoi. So I go for ‘favs’ amongst current productions: Tosca; Nabucco; In the Upper Room and Chaika. I am embarrassed to count how many times I have now seen the last two in Moscow. But – lame as this may sound – if I don’t see opera or ballet fairly regularly I honestly feel my soul starting to wither…

Good news, bad news...

Pleased to read in the Moscow Times today that Nashi (Russia site here) was for once on the opposite side to the authorities yesterday. Their picketing of the EU ‘Embassy’ (sic) in Moscow, now and then, is almost as irritating as when they harass HM’s Ambassador.



That said, the authorities normally cut Nashi a lot of slack; which makes me wonder when I read that dozens of them were detained for an illegal demonstration. Now that the State Duma elections are over – and any neo-Orange threats apparently safely put to bed, now is the time the Kremlin can focus on a calm transition between Presidencies. In other words, Nashi has kind of served its purpose for now.

A post-Soviet Komsomol was always going to have its attractions for the nostalgic. But, boy-scouts aside, Nashi as political shock-troops? I just wonder if there isn’t a sense that they need to be on a shorter leash. One can but hope…

…but then I saw this on the BBC so, perhaps then, reasonableness is not about to break out all around.

Admittedly the Americans and their bloody shield started it, but – groans – this is not a hugely helpful development.

Dmitry Rogozin is a ‘pick a fight’ politician and not someone inclined to improve Russo-NATO relations. He makes John Bolton look like Talleyrand.

Russian arms exports

This magnificent beast below is the Su-34 fighter-bomber (NATO Ident: “Fullback”). Aficionados of big, hairy weapons systems (and I am not one) say that it creams the F-16 in performance terms.



According to Kommersant today, Australia is thinking of buying them too. Obviously Australia isn’t a part of NATO – small issue of geography there – but they have snuggled up close to it.

Which begs the question about interoperability: the slightly spooky RAND Corporation has written well on this issue.

But can you imagine the hullabaloo amongst the US right / military if the Aussies buy Ruskie? That would be fun to watch…