Intelligence Brief - 7 November 2014

Putin accelerates turn to China

Russia’s President Vladimir Putin gave an extensive interview to China’s leading media companies on 6 November ahead of the 10-11 November APEC  Summit in Beijing.  Two things were clear from the interview: first Putin’s determination to further deepen Russia-China relations and, secondly, his open linkage of this determination with Russia’s dissatisfaction with US foreign policy.

Here are some examples of Putin expressing his determination to deepen ties with China and his linking of this to US policy, even to the extent of seeing the fall in oil prices as an anti-Russia conspiracy:

Asked how he rated the role of APEC, Putin said: “It is worth noting that all the decisions adopted on the basis of the principles of mutual respect, accommodation of the interests of each other, which reflects the spirit of APEC.  Under the current conditions, when some countries [presumably the United States]  prefer to act on the international arena using the methods of political, economic, and often even coercive pressure the role of APEC as an effective coordinating mechanism for building a new regional architecture is indispensible.”

Asked about Russia-China ties, Putin said: “Strengthening ties with the PRC is a foreign policy priority of Russia…We take similar or even identical stands on major global and regional issues…Russia and China are interested in enhancing the international law and the key role of the UN.  We oppose the return to the ideological confrontation in world affairs…”

Asked about the fall in global oil prices, Putin said: “The obvious reason for the decline in global oil prices is the slowdown in the rate of economic growth…[but] in addition a political component is always present in oil prices…derivatives greatly increasing the volatility of oil prices are being actively used.  Unfortunately, such a situation creates the conditions for speculative activity and, as a consequence, for manipulating the prices in someone’s interests [our emphasis added].”

Asked about the Trans-Pacific Partnership and the view of some experts “that Washington seeks to counter the new association to APEC due the growing influence of Russia and China in the region”, Putin said: “It is not easy to evaluate the Trans-Pacific Partnership progress.  This initiative is carried out behind closed doors, even businesses and the public of the contracting states have no access to it, let alone other countries…Obviously, the Trans-Pacific Partnership is just another US attempt to build an architecture of regional economic cooperation that the USA would benefit from.  At the same time, I believe that the absence of…Russia and China in its composition will not promote the establishment of effective trade and economic cooperation.”

Brain drain concerns

Separately, one of Putin’s obsessions during his lengthy period in power has been Russia’s demographic weakness.  He has come back to the subject again and again, and he will not be at all pleased about the latest figures that show an accelerating brain drain.  On 2 November, the news website reported more people left the country in the first eight months of 2014 than in any complete year under Putin’s rule.  Emigration from Russia for January-August was 203,659; the number for the same period in 2013 was 120,756 and for all of 2013 it was 186,382.

An employment analyst was quoted as saying: “There is no particular sectoral reason for this.  Nothing has happened in the economy as regards specific industries, these problems are all at the macro level”.  Although all types are leaving, the majority are skilled specialists.



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