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The Russian angle

Posted by Helen Friday, July 30, 2004

It is always instructive to hear how the subjects that preoccupy one are viewed from a slightly different angle. Yesterday evening I heard the eminent economist and historian Philip Hanson, Professor Emeritus in Russian and East European Economy at the University of Birmingham, talk on Russia now and in the future.

While most of his fascinating and well-balanced talk together with the discussion afterwards are beyond the scope of this blog, he did raise a couple of interesting points to do with the European Union.

Speaking of the agreement between Russia and the European Union proclaimed in June (and discussed in this blog) he reminded his audience that the EU had undertaken to support Russia’s application to the WTO. Apparently Pascal Lamy at one point pronounced grandiloquently that said membership would tie Russia into a stable, transparent and liberal economic and political system.

Professor Hanson thought that was going too far. Look at the other members, he said. He did not even want to discuss Italy, but Moldova? Kyrgyzstan? These are stable, transparent, liberal systems? That is surely a chapter from Tales of Porcine Aviation.

Asked about the agricultural sector, Professor Hanson touched on the fact that there had been agricultural reforms in Russia and though the situation was messy and inadequate, the country, almost for the first time since the early Soviet years is exporting wheat. In fact, it is exporting wheat without starving its own population, as it did before the revolution.

The trouble is that its natural trading partner is Europe and Europe, said the professor, is stagnant at best and protectionist and stagnant at worst. He returned to that theme later on when quoting another economist who was trying to forecast the economic future (always a risky business).

It seems that according to this forecast in a couple of decades we shall reach a situation when the world will be divided up economically. America will do services, China industrial production, Russia energy and Europe? Europe will do stagnation. There was no disagreement in the audience, not even (or especially not) from other economists.