Interviews
Mandelson urges Russia to take 'final steps' into global economy
31 Mar '07
3 min read
Speaking to an audience in Moscow, Mandelson argued that Russia's long-term economic interests can only be safeguarded by moving beyond a dependence on commodity trade, greater diversification and transparent conditions for trade and investment. WTO membership for Russia he said is "not about pleasing international opinion, but the pursuit of its own economic interests".
He argued that the voices calling for "Russian isolationism can only lead Russia in the wrong direction". Mandelson concluded: "President Putin has overseen significant achievements and brought Russia to the threshold of full integration into the global economy. Now it is time to take the final steps".
Mandelson argued that while Russia has made strong economic progress under President Putin, it remained economically vulnerable to swings in commodity and energy prices: "82% of Russia's exports are related to hydrocarbons and metals. Although no one is predicting a drop in oil and gas prices in the short term, no one predicted the current hike either."
"And the risk, therefore, is of a false sense of security, especially if high energy prices are not so much the economic icing on the cake as a large part of the cake itself… If self-assurance were to turn into over-confidence, it would risk becoming a brake on reform, or worse, a rationale for turning away from the huge sustained effort Russia needs to make to diversify and integrate fully into the global economy".
Mandelson argued that WTO membership remained a vital step in diversifying the Russian economy and attracting new trade and investment: "It is true that the new Russian economy was built without the advantages of WTO membership. But that's an economic picture of the status quo. If Russia's only ambition is to be a hydrocarbon power, then it probably doesn't need the WTO. But Russians want more for their country".
He argued that the voices calling for "Russian isolationism can only lead Russia in the wrong direction". Mandelson concluded: "President Putin has overseen significant achievements and brought Russia to the threshold of full integration into the global economy. Now it is time to take the final steps".
Mandelson argued that while Russia has made strong economic progress under President Putin, it remained economically vulnerable to swings in commodity and energy prices: "82% of Russia's exports are related to hydrocarbons and metals. Although no one is predicting a drop in oil and gas prices in the short term, no one predicted the current hike either."
"And the risk, therefore, is of a false sense of security, especially if high energy prices are not so much the economic icing on the cake as a large part of the cake itself… If self-assurance were to turn into over-confidence, it would risk becoming a brake on reform, or worse, a rationale for turning away from the huge sustained effort Russia needs to make to diversify and integrate fully into the global economy".
Mandelson argued that WTO membership remained a vital step in diversifying the Russian economy and attracting new trade and investment: "It is true that the new Russian economy was built without the advantages of WTO membership. But that's an economic picture of the status quo. If Russia's only ambition is to be a hydrocarbon power, then it probably doesn't need the WTO. But Russians want more for their country".
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