#9
Moscow Times
April 28, 2001
Nation 45th in Competitiveness
By Maxim Trudolyubov and Mikhail Overchenko
Vedomosti
Russia is no longer considered the least competitive country in the world.
Over the course of last year, Russia surpassed Colombia, Poland, Venezuela
and Indonesia to take 45th place in terms of its competitiveness, according
to a poll of business leaders conducted by the International Institute for
Management Development, or IMD.
The Economic Development and Trade Ministry said the country's higher ranking
demonstrates that attitudes toward Russia are changing.
Every year, the IMD business school in Lausanne, Switzerland, compiles a
ranking of countries' competitiveness. This year, the list includes 49
countries, two more than last year. The purpose of the list is to demonstrate
to what extent countries help their business leaders achieve greater
competitiveness on the domestic and international markets. Countries are
rated not only by objective economic factors, such as the rise of gross
domestic product, but a long list of criteria that includes:
o 68 criteria for economic activity that evaluate macroeconomic indicators;
o 84 criteria for government performance, including general policies, tax
policies and protection of investors;
o 60 criteria for effective business management, including profitability,
responsibility and innovation;
o 74 criteria for infrastructure, measuring to what extent local, technical,
scientific and human resources meet business needs.
In addition, IMD used statistics received from international organizations,
national and private institutes and data compiled from a survey of 3,678
directors of large and medium-sized companies in the countries studied.
The Economic Development and Trade Ministry said the IMD survey could be used
to gauge world opinion. "We keep track of such data," said Deputy Minister
Arkady Dvorkovich. "It might not be entirely objective, but it's an indicator
of attitudes toward us. Russia's position will continue to improve if the
measures we propose are implemented."
However, the government does not study the country's competitiveness in its
own analyses. "The rise in exports — that's the rise of our
competitiveness,"
said Alexander Pakhomov, head of the Economic Development and Trade
Ministry's trade policy department.
Using exports as an indicator, Russia ranks high. It's fourth in the world
for the growth of exports and is second for its positive net trade balance.
Moreover, Russia comes out on top in some categories. It has the highest
correlation of the value of exports to the value of imports and the lowest
cost of electrical energy for industry. Over the past year, the government
achieved the greatest reduction of its state debt among the countries
surveyed, with a 30.8 percent drop, not taking into account inflation.
Russia could perform much better if it targeted those areas where it
particularly falls behind, said Suzanne Rosselet, who was responsible for the
methodology used in IMD's research. If Russia brought results in its 20
weakest areas up to the IMD study's average, the country's rating would rise
to 39.
Russia's weaknesses, in IMD's opinion, include the highest foreign debt as a
percentage of GDP at 85.6 percent, the highest level of energy consumption at
62.7 kilojoules per dollar of GDP, the absence of a mechanism to protect
foreign investment, and drug and alcohol abuse.
The ratings rose the fastest among countries that focused on government
performance and effective management of infrastructure, Rosselet said.
Finland and Sweden, for example, are increasing their competitiveness through
large investments in new technology.
Hong Kong, significantly, improved its rating by returning to sixth place —
the position it held in 1999 — from 12th place in 2000. Like Russia, Hong
Kong achieved its higher ranking through an improved macroeconomic rating.
Last year, Hong Kong's GDP rose 10 percent.
The institute's specialists warn that this year, the arrangement of power
could change, given that the United State's economic slowdown and the current
economic crisis in Japan will have a negative impact on other countries.
"The year 2000 was a year of economic excess, 2001 could be the year of the
economic hangover," the report states.
"The United States and Japan create 46 percent of the world's gross national
product," said Professor Stephane Garelli, director of the project. "A
worsening economic situation in those countries could hurt every country in
the world."
Japan's rating has fallen for the past 7 years. For eight years until 1994,
Japan held first place. But the country is being undermined by the reluctance
of its authorities to undertake reforms that would allow it to overcome
stagnation. The Americans, who have held first place since 1994, are not in
danger of losing their position.
"The leading countries have created conditions not only for attracting
investment, but also the best minds," Garelli said. "The U.S. has been the
most active in this area. From 1994 to 1999, they 'imported' 124,000 Indians,
68,000 Chinese, 57,000 Filipinos, 49,000 Canadians and 42,000 British
citizens, all highly educated. In the race to increase competitiveness, the
struggle is waged for bytes and minds."
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#10
Program on New Approaches to Russian Security Policy Memo Series (PONARS)
http://www.fas.harvard.edu/~ponars/memos.html
Memo No. 188
PONARS, 2001
The United States and the Unipolar Delusion:
Implications for US-Russia
Relations
By Ted Hopf
Department of Political Science
Ohio State University--March 2001
Who would have predicted that 10 years after the disappearance of the Soviet
Union, US defense spending would remain at levels characteristic of the Cold
War? Or that the United States would lead a campaign to push the borders of
the military alliance designed to fight the Cold War, NATO, ever closer to
Russia's borders? Or that the energy reserves of Central Asia and the
Caucasus, and the routes by which they reach Western markets, would be
understood by Washington as strategic assets that should be denied to Moscow,
for fear of Russia's growing influence on Azerbaijan, Georgia, Turkmenistan,
and Kazakhstan? Or that the United States would relentlessly pursue the
deployment of ballistic missile defense, despite the opposition of not only
China and Russia, but also its own NATO allies? How can we explain this Cold
War behavior in the absence of a Cold War enemy?
There are three parts to a possible answer. The first two--expectations for
absolute security and the conception of security as necessitating a world
that looks like America--are features of American political strategic
culture. The third part concerns the military-industrial complex and its
associated discourse of American hegemony that dominates domestic politics in
the United States today. In identifying these possible causes for the
continuation of the Cold War after the disappearance of Washington's only
rival, I suggest how Russian foreign policy might be crafted so as to both
avert the dangers emanating from America's unipolar delusion, and help
gradually do away with the delusion.
American Delusions of Absolute Security
Georgi Arbatov, writing in 1971, put his finger on one half of the story:
American political culture celebrates the myth of absolute security. Situated
for centuries behind perfect oceanic defenses, the United States, quite
unlike its Asian and European counterparts, experienced only the most trivial
threats of invasion and occupation. This state of security grace has come to
seem natural to Americans, who for more than 200 years have unilaterally
provided for their own security, with no reliance on others to stave off
threats to the American homeland. This helps to explain Ronald Reagan's love
affair with SDI ("Star Wars"). It also explains the fact that the end of the
Soviet threat has not ended America's embrace of a weapons system whose
fundamental logic was rejected for decades by American nuclear strategists,
whose proscription was trumpeted as a great victory over Soviet plans for
nuclear superiority at the time, and whose deployment threatens to alarm
allies and provoke putative enemies into a real, not illusory, arms race. In
a very real sense, the resurrection of Star Wars is an effort by Washington
to escape the unavoidable consequence of the nuclear revolution: US security
is forever in Moscow's hands.
American Universalism
Over fifty years ago, Louis Hartz and George F. Kennan, quite independently,
wrote important books in which they argued that the United States and its
people are afflicted with a very troubling and consequential case of
self-righteousness. This deeply-held collective belief in the superiority of
American political life does not in itself imply a crusading, proselytizing
foreign policy. Indeed, as both scholars point out, self-satisfied
isolationism is equally consistent with this political culture as demanding
that all the world accept the American way of life, "or else." But what this
culture does imply, according to Kennan and Hartz, is an American foreign
policy that, once engaged, adopts a universalizing mission to remake the
world after its own image. Indeed, without other states just like the United
States, Americans do not feel secure: their absolute security is threatened.
If one combines the American quest for absolute security with its equally
strong conviction that all the rest of the world naturally wants to become
the United States, it is possible to explain how US policymakers, apparently
sincerely, assert that NATO's expansion to the East can worry only states
with revisionist agendas in Europe. For example, an unnamed White House
official on March 15, 2001, claimed that only "those who intend to blackmail
us" could object to deployment of ballistic missile defenses. In other words,
since the United States is obviously a peace-loving power, who can object to
its deployment of defenses or the expansion of the defensive NATO alliance,
other than states interested in the insecurity of others? One might note that
this was precisely the attitude of Soviet policymakers in the 1960s and 70s,
during the period of self-encirclement.
The Military-Industrial Complex Lives, and Votes
A most important part of American behavior in international affairs has been,
and remains, the place of the military-industrial complex in American
political and social life. This complex accounts for a very large percentage
of the US economy. What is important, however, is that its vital parts--its
bases, plants, and shipyards--are strategically located in areas of the
country that evoke intense political support from Southern and conservative
Senators and Representatives.
As important as this material stake in the continued production of arms and
armies, is the cultural and social stake in the continued reproduction of the
Cold War in popular culture and discourse. The production of the military
cannot be equated with the production of any other government program or
private entrepreneur, because it materially reinforces the insights of
Arbatov, Hartz, and Kennan. The military is the physical embodiment of
American superiority, unilateralism, and pretensions to universalist values.
The Unipolar Disease
The Soviet collapse left the United States in a position of splendid
unipolarity. How it has behaved in this position can be explained by its
domestic political culture of absolute superiority and security. From the
Russian perspective, this outcome has meant mostly bad news. Washington
continues to insist on unilaterally advancing its own conceptions of global
security, while demanding that other states (like Russia) either become like,
or forever remain existential threats to, the United States. The symptoms of
this malady are many, but they share the common thread of unilateral exercise
of American power with only the lowest priority given to others' interests. A
partial list includes NATO expansion, ballistic missile defense (BMD), the
continual bombing of Iraq, the war in Kosovo, management of the global arms
trade, and the pipeline politics in Central and Southwest Asia and the
Caucasus, which are largely directed against Russia and Iran.
While American unipolarity has made the world a less attractive place for
many states, Russia included, we should not exaggerate: the United States
does not even imagine directly infringing on Russian territorial integrity or
sovereignty, as it is conventionally understood. But that does not imply that
Russia should welcome the continuation of US hegemony. The good news is that
US unipolarity is a declining asset. Because of its fetish for unilateral and
absolute security, America (seemingly congenitally) rejects any broadening of
its hegemonic management to include true multilateral
co-determination--whether with Europe, Japan, China, or Russia--of the
international security environment. But this kind of unilateralism, while
temporarily perhaps meeting Americans' cultural need for absolutism in
foreign affairs, conceals the fact that US authority is slowly and surely
being eroded by these actions.
In fact, it could be argued that we are witnessing a race between the gradual
disappearance of America's unipolar moment through: 1) its growing loss of
authority among other states in the world, including its NATO allies and
Japan, not to mention Russia, India, China, Iran, et. al.; and 2) America's
provocation of another power, say China or Russia, to confront it. In other
words, US actions may create a self-fulfilling prophesy (a world that looks a
lot like the Cold War it seems to have never ended prosecuting). Or, the US
might wake up to the fact that it dominates the globe, and realize that
sharing hegemonic management of the globe with others, including Russia, will
preserve that position of dominance far longer than will its unilateral
assertion. Moreover, the promised gains of such a long-term arrangement are
vastly greater than the meager rewards from getting a pipeline to pass
through Turkey rather than Russia.
How Russian Foreign Policy Can Help Cure the Disease
The cure for American unipolarity is definitely not the emergence of another
pole, or collection of poles. Multipolarity will only increase the
interventionist and militarized tendencies of American foreign political
culture. Rather, Russia's best bet is to help, as subtly as possible, to
expose the illegitimacy of US unilateral policy in international affairs.
This means not confronting the US, but rather demonstrating--both through its
own adherence to principles of international law and common practice, and by
couching all opposition to US actions within that normative framework--that
Washington is acting without any legitimacy in the world.
The following is a list of maxims that might guide a Russian foreign policy
based upon enduring unipolarity, while working to hasten its end:
Continue on the road of economic and political reform. Russia's domestic
economic and political reforms should aim at restoring Russia's material
basis for great power status;
Do not ally with others. This will only vindicate American Cold War logic;
Ignore Washington; embrace Europe. As far as possible, deal with Europe on
questions of global politics;
Undermine the legitimacy of unipolarity. Through its own actions--both at
home (in Chechnya, for example) and abroad (in relations with Iran, for
example)--Russia should scrupulously adhere to multilateral (that is,
European) understandings of good conduct;
Work to reduce threats to the United States. Russian efforts to get North
Korea, Iran, and Iraq off the American list of "alarming" states (used to
justify BMD, among many other unilateral absolutist security policies) could
undermine the very basis of US strategy;
Be Russia. Continue to resist America's universalist export of itself; and
Be ironic. Russia--realizing that neither fundamentally undermines Russian
security--should point out the absurdity of NATO expansion and BMD, and
invite the devotion of yet additional US resources to these illusory goals.
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