Russian G8 Summit - Beginning Of A New Era
Finance Ministers from the G8 recently held two days of
discussions in Moscow. The focus was the Kremlin's growing clout
in world oil and gas markets.
This wass Russia's first time as chair of the group meetings.
With growing energy concerns, shifting patterns of power, and
rapid growth of China, India, and other expanding economies,
this is perhaps the beginning of a new era.
The diverse agenda included talk about world trade, debt relief
for poor countries, fighting infectious diseases and terror
financing, but observers expect energy issues will continue to
dominate these and future discussions.
Along with its other G8 partners --- Britain, Canada, France,
Germany, Italy, Japan and the United States --- Russia invited
Brazil, China, India and South Africa, recognizing their rapidly
growing clout in financial circles.
**Global Energy Security
Russia singled out "global energy security" as the focus for
discussion at these meetings, and, in fact for its entire G8
presidency.
One particularly contentious issue is Russia's offer to setup a
uranium enrichment center for use by nations needing nuclear
fuel for power production. Russian President, Vladimir Putin
expanded on this offer in a news conference held Jan 31.
The suggestion is seen as a compromise in the Iran standoff over
Tehran's continuing nuclear research program. The Russian offer
would potentially remove the need for countries like Iran to
conduct controversial research that could also be used to build
nuclear weapons.
**Dependable supplier of oil and gas
With Russia's growing role as a supplier of oil and gas to
Europe, another of Putin's primary objectives is to emphasize
Russia is a dependable energy partner with huge reserves, in a
time when Middle East volatility is rising.
Its recent dispute with Ukraine over gas prices did not help
bolster the image of Russian dependability. That dispute
disrupted supplies to other European clients downstream when
Ukraine temporarily turned off the pipelines.
Another concern is Russia's reassertion of state control over
energy resources. This move links the dependability of Russian
energy supply to the politics of the day. This is normally seen
by western global customers as an attempt to create levers for
furthering the supplier state's political agenda, and prying
control away from multinational corporations.
Given the current state of oil supply in the world, Russia is
unlikely to be bullied on this matter. This is especially the
case if emerging giants like China and India are sympathetic to
attempts to break Western control over oil supply.
As Russia continues to flex its muscles on energy issues, the
global power balance between energy users and producers
continues to shift. For decades the major industrial powers have
used western controlled multinational corporations to control
world supply of oil and gas. But Russian state control of supply
and delivery systems could signal a signicant shift in this
pattern.