Don't Goad The Russian Wolf Too Much !

In my latest post @ The Edge of Town (http://the-edge-of-town.blogspot.com/) I've reflected upon the real and potential dangers of Russian oppression for countries of the former Soviet Block, as demonstrated in the current crisis in Georgia. However, foreign politicians must, in my view, be equally careful not to goad the Russian Wolf to much. The West, notably the United States and Britain, does not have an unblemished record on recent interventions in foreign territories, particularly where energy supplies are at stake.

"New" politicians on the international scene, like David Cameron, want to reflect rather more on how they might handle relationships with Russia, should they win the next British General Election, not least because of our important trading links with that country.

Russian treatment of BP (British Petroleum) may have been heavy-handed, but this is, after all, a company which can justly be accused of gross profiteering, and a tarnished record on environmental and safety issues in some parts of the world.

For my own part, I'd like the Russian Government to take a less "macho" stance on domestic and foreign policy. It's a shame all that testosterone hasn't apparently focused itself more on winning medals at the Beijing Olympics, as I thought one of the main functions of "The Games", along with football and other macho sports, was to distract energy and attention away from violent Geo-politics. However, in the case of Russia we may need more "Nudge Politics" (I think they're called) in the future, if we are to avoid real War Games.

Some Background Information from the US Department of Energy (May 2008)
Russia holds the world's largest natural gas reserves, the second largest coal reserves, and the eighth largest oil reserves. Russia is also the world's largest exporter of natural gas, the second largest oil exporter and the third largest energy consumer.

In 2007, Russia’s real gross domestic product (GDP) grew by approximately 8.1 percent, surpassing average growth rates in all other G8 countries, and marking the country’s seventh consecutive year of economic expansion. Russia’s economic growth over the past seven years has been driven primarily by energy exports, given the increase in Russian oil production and relatively high world oil prices during the period. Internally, Russia gets over half of its domestic energy needs from natural gas, up from around 49 percent in 1992. Since then, the share of energy use from coal and nuclear has stayed constant, while energy use from oil has decreased from 27 percent to around 19 percent.

Russia’s economy is heavily dependent on oil and natural gas exports. In order to manage windfall oil receipts, the government established a stabilization fund in 2004. By the end of 2007, the fund was expected to be worth $158 billion, or about 12 percent of the country’s nominal GDP. According to calculations by Alfa Bank, the fuel sector accounts for about 20.5 percent of GDP, down from around 22 percent in 2000. According to IMF and World Bank estimates, the oil and gas sector generated more than 60 percent of Russia’s export revenues (64% in 2007), and accounted for 30 percent of all foreign direct investment (FDI) in the country.

Kremlin policy makers continue to exhibit an inclination to advance the state's influence in the energy sector. Taxes on oil exports and extraction are still high, and Russia’s state-influenced oil and gas companies are obtaining controlling stakes in previously foreign-led projects. State-owned export facilities have grown at breakneck pace, while private projects have progressed more slowly or have been met with roadblocks by state-owned companies or by various government agencies.