Page 28 - TURKRptJun22

28 I Cover story bne June 2022
Russia has moved on from Lenin’s vision and retains a mix of free market economics coupled with autarky, and global trade limited by sanctions. It is a pseudo- democracy run by a repressive political elite. The leadership needs to win a large share of the popular vote, but it tolerates no dissent and is not against throwing its opposition into jail. Opposition blogger Alexei Navalny has now served six years of his 38-year sentence.
The combination of the war in Ukraine and the global pandemic brought the process of globalisation to an end, but the war also raised serious concerns amongst many of the non-aligned nations that only became apparent in the following years.
The other emerging markets, particularly China, were concerned by the weaponisation of the dollar and use of trade restrictions to punish Russia and have been reluctant to join the sanctions regime or ostracise Moscow. The decision to force Russia into default on its bond obligations, despite its willingness and ability to pay, has led many nations to rethink their debt strategies.
It has also led to closer geopolitical co-operation amongst the Emerging Markets, roughly based on the G20, that seek to balance the power of the West with the new Global South alliance, led by the Russia-China axis.
www.bne.eu
The change in orientation was most noticeable at the G20 summit in Indonesia in 2022, which Putin personally attended, to the protestations of Washington that boycotted all the Russian sessions.
G20 leaders, especially China’s President Xi Jinping, went out of their way to show their support for Putin, but still maintained enough distance to avoid bringing down US sanctions on themselves. At the event Putin gave a triumphant speech about how the US hegemony over geopolitics had finally been broken.
The same sentiments were on display at the second Russia Africa Summit held later the same month, where 35 African leaders made the trip – down from the 48 that attended the first summit in 2019.
Cut off from Western markets, Russia has increasingly been reorienting towards China and other emerging markets that are less squeamish about its invasion of Ukraine; Indonesia notably refused to disinvite Russia from the G20 summit in Jakarta in November that year.
Many speculated that Moscow would become the junior partner to Beijing, but the tensions between Beijing and Washington remain high since the Taiwan crisis in 2024 and the US attempt to force through the Asia-Atlantic
Comprehensive Free Trade Agreement (AACFTA) in the last two years. The clash between the US and China for advantage in Asia has kept the Russo- China relationship more balanced. China needs Russia's potential military threat to Europe, especially since the fragile ceasefire with Ukraine was signed in the autumn of 2022, to complement its own power in Asia that has contained US ambitions to open up Asia.
At the same time, the BRICS organisation has grown in prominence, becoming the Emerging Market equivalent to
the G7 of leading industrial nations. The body was originally a marketing term invented by Goldman Sachs’ chief economist Jim O’Neill, but then became first an economic club but is increasingly playing a geopolitical role. That has been enhanced in the last few years after the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) joined as official observers, representing the Arab world at the regular BRICS meetings.
The Russia Africa Summit is now in its seventh year and Russia has emerged as a major investor into Africa, rapidly expanding its mining and agribusiness, arms and energy sales, and increasingly its leading retail and banks are moving in to exploit Africa’s emerging middle class in conditions that are almost identical to those Russia experienced
in the noughties.