After 18 long years, the Russian bear has finally entered the WTO cage – or is on the verge of doing so. Georgia was the last stumbling block en route to WTO membership for Russia as Tbilisi insisted on customs control between Russia and Abkahazia and also between Russia and South Ossetia. Both the aforementioned dominions separated from Georgia in August 2008 and Moscow has since gone on to acknowledge both of them as sovereign states as the rest of the world acknowledged them as veritable part of Georgia. However, with that particular thorn plucked out, it has paved the way for Russian entrance into WTO; and with the final decision expected in mid-December, some believe that it was about time!
WTO membership is being touted as the opening up of Russia to the rest of the world, hence making things facile for European and American hierarchies to ameliorate their commercial interests in the area. Kremlin might have conjured up a political triumph, but there are fears – most notably via the noise that Prime Minister Vladimir Putin has been generating – that such a maneuver would limit Kremlin’s hegemony over Russian economy. As things stand Kremlin dictates matters pertaining to foreign investment, and moulds it in synchrony with its personal benefits. However, the accession would connote that there would be an independent framework of rules and regulations and hence the government’s stranglehold over domestic matters would weaken.
Experts opine that such an absence of foreign exposure and the government’s grip over domestic matters has ensured that Russian industries have suffered and more often than not their productivity has stalled for prolonged periods. Energy industry especially is being touted to benefit from the WTO accession, as competition from foreign market would mean that the prices would be reduced considerably; hence ensuring social stability. Russia has suffered on a multitude of fronts owing to its isolation from the world market, and now with the seemingly inevitable accession on the horizon, there is every cause for sanguinity in Moscow; especially considering the fact that Russia is joining the WTO on some incredibly lenient terms.
If one were to discern the vocalisations on the European front, one gets the impression that the partially wounded, partly crippled European hunters had been on bear hunt for quite some time; and ostensibly they have finally hit the bull’s eye. With the European financial quagmire become all the more menacing day by day, it is understandable that they’d be clutching at any straws that they could find – not suggesting that this is the case here, Russia actually does give Europe genuine cause for buoyancy.
It goes without saying that mutual cooperation between Europe and Russia would boost with the latter joining WTO, and most of this would be the logical corollary of the presence of a more predictable trade market in Russia – considering the capricious situation in the finances of most global realms, this is a blessing without any disguise whatsoever. Russia has synchronised its trade laws, with the international laws and hence stable profit-making is a safe bet in the Russian market. With the transparency in the Russian investment climate becoming all the more conspicuous one should expect a blitzkrieg of European investment, as the euro zone vies to dig itself out of the financial fix.
Growth of European exports to Russia also insinuates that there would be a precipitous ascent in job opportunities in Europe. Considering the fact that as many as 10.3 per cent of the people in euro zone are being jettisoned in the bin of unemployment; that’s one huge part of the jigsaw sitting right there in front of us.
The writer is sub-editor, Profit. He can be reached at [email protected]
