Russian steelmakers say that an anti-dumping investigation now underway in South Africa is unfair to the Russian steel industry, and should be modified by the granting of full market economy status to Russia when the two governments’ trade officials meet in Pretoria next month.

The South Africans have responded by branding Russian tariff penalties on South African fruit imports as equally unfair. What ought to be a straightforward quid pro quo, however, has been dragging on now for several years. If a deal on steel-for-fruit can’t be reached by the end of November, Russia’s ability to strike a far more complex set of bargains over a much wider range of goods with the World Trade Organization must be in doubt. (more…)

by John Helmer - Friday, October 4th, 2002
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When Louis XIV was dying in 1715, he had ruled for 72 years, the longest period of absolute one-man rule in the history of Europe to that time, or in the time that followed.

So long in fact, that almost all the lawful heirs to the throne of France were dead – Louis’ son, his grandsons, and all but one of his great-grandsons.

That led his two bastard sons and bastard daughter into a conspiracy to put them in line to succeed, in case Louis, the five-year old great-grandson, died prematurely. To ensure success, they stoked the allegation that Louis’ nephew, Philippe, Duke of Orleans, had poisoned the others to capture the succession for himself. (more…)

by John Helmer - Friday, September 20th, 2002
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Nuri Said was the puppet prime minister of Iraq during the 1950s, when the British pulled all the strings in Baghdad.

When revolutionary Iraqi officers toppled him in 1958, his mangled corpse was dragged through the streets – much as President George Bush and his colleagues are thinking of doing to Saddam Hussein, if they can catch him. Said used to say: “You can always rent an Arab, but you can never buy him.” His end more or less confirmed that. But the Bush administration is filled with violent men with short memories, who won’t have heard of Nuri Pasha, and aren’t in the frame of mind to listen to his advice.

At the time, Said’s downfall was attributed to the clever tactics of the Soviet Union, in part because some of the revolutionary officers were communists, and mostly because the events took place during the Cold War, and Washington and London had no other way of explaining unexpected outbreaks of nationalism, localism, and the like. It didn’t take long for Moscow to realize the fragility of the new situation in Baghdad, as the Baath Party, in which Saddam got his start, began its long and bloody rise to power. Russians who have known Iraq from those days to the present realize that the only certain thing about Iraqi politicians is their thirst for blood, and the only reason for Hussein’s long rule is that he has out-drunk all others. Such Iraqis, Russians understand very well, can be rented, but not bought. (more…)

by John Helmer - Friday, September 6th, 2002
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In 1701 an unusual cargo arrived from the Netherlands in the Spanish port of Cadiz. Documents indicated it was chocolate for the head of the Society of Jesus, a powerful and secretive organization in Catholic Spain. The cargo was so heavy that a customs officer decided to inspect it. Inside, he found closely packed bars of chocolate. Suspicion aroused, he began to scrape at the chocolate, until he discovered, beneath a finger-thick layer, pure gold. The cargo for the Jesuits was smuggled bullion. Public exposure of their secret was so embarrassing, they claimed to know nothing about the precious comestible. And so, the gold was taken by the King of Spain, and the chocolate eaten by the port’s stevedores.

Russia’s negotiations for accession to the World Trade Organization (WTO) are like the chocolate shipment. If you believe the declarations, they are one thing. If you dig below the surface, you find something secret. (more…)

by John Helmer - Friday, August 30th, 2002
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Prime Minister Mikhail Kasyanov recently summoned Russia’s chief insurance regulator, Konstanin Pylov, and told him to mind his mouth.

The subject of the prime minister’s concern was the World Trade Organization’s demand that Russia dismantle its restrictions on foreign insurance companies in the Russian
market.

The regulator, who is officially head of the Department of Insurance Supervision at the Finance Ministry, understands that if Kasyanov says, “Jump!” he should cry, “How high?” (more…)

by John Helmer - Friday, August 23rd, 2002
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MOSCOW – Beer advertising is pervasive on Russian television, but not because it’s hot weather and Russians are thirsty. President Vladimir Putin has criticized the advertising, chiding media officials, including the press minister, for promoting profits ahead of health and physical fitness. The point he didn’t make is that, in Russia, the alternative to beer isn’t health. It’s vodka.

The growth of South African Breweries (SAB) explains why. SAB will shortly launch new Russian brands of beer in a plan to double its brewing capacity in Russia from 2.2 million hectolitres to 4.6 million hectolitres, Alan Richards, SAB’s chief Moscow representative, announced recently. Richards heads Transmark, the European affiliate of SAB, which recently acquired the big US brewer Miller.

The US brewers were too timid to invest in Russia for the past decade; SAB’s initiative shows them how. The expansion is the third at SAB’s Kaluga brewery site, 180 kilometers southwest of Moscow. According to Richards, US$60 million in fresh capital expenditure will be required. More than $100 million has already been spent. (more…)

by John Helmer - Wednesday, August 21st, 2002
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MOSCOW – Among courtiers, courage of conviction is rarely a qualification for the job. It can, however, help in dealing with insults, the occupational hazard that comes with paying court to most sovereigns.

By this standard, Dmitri Kozak, deputy head of President Vladimir Putin’s administration, is no Vauban Le Prestre, Marshal of France at the start of the 18th century. The difference between them I’m coming to. Their similarity is that both tried to change the way in which land and the resources are taxed in a state reduced to poverty by the folly and greed of its leadership.

Vauban was a siege engineer, a military profession that was crucial in the wars of King Louis XIV. Vauban was so good at this that the king decided to promote him to marshal in 1703. What Vauban didn’t reveal until four years later was that, while he had been laying sieges against France’s enemies, he had also been conducting secret research into every form of taxation in the country. From this Vauban produced a book in which he explained how the system had impoverished France’s producers, enriched the privileged few, weakened the army and shorted the king and treasury of what an uncorrupt and equitable system could provide. The book then recommended a new, simpler tax regime, based on encouraging higher yields from production in land and industry. (more…)

by John Helmer - Thursday, August 15th, 2002
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It’s no tragedy, and it cannot be. That’s what Russian government officials said in mid-1999 when, over the strenuous objections of a majority of its steelmakers, Russia agreed to a U.S. ultimatum and signed an agreement to limit Russian steel exports to the United States.

That year started with an attempt by U.S. trade negotiators to put a limit on hot-rolled steel imports. Moscow agreed to the Washington terms, which included fixing a quota on the volume of the steel that could be imported in a year, as well as setting a high reserve price below which nothing could be sold at all.

Imagine the surprise in the Ministry of Trade and the Kremlin when the Americans suddenly said their own deal wasn’t enough. They then added what was called a “comprehensive steel trade agreement,” listing new limits on more than a dozen categories of iron and steel, in addition to the hot-rolled products. It’s no tragedy, and it cannot be, said the Americans, when the Russians objected that there was no justification for adding import restrictions on Russian imports that were too small to damage the U.S. market and weren’t the target of investigation according to U.S. trade law. (more…)

by John Helmer - Saturday, August 3rd, 2002
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In Russia, the village folk say that even a blind horse can pull a cart, if he is led.

In the case of Russia’s state insurer Rosgosstrakh, it is easy to see that the horse is being led in a circle; more difficult is to identify who has his hands on the bridle.

After selling a 49 percent stake in Rosgosstrakh to a still-secret consortium of foreign and Russian insurance interests, led by the Moscow investment bank Troika Dialog, the government is quietly considering a plan to release a controlling interest soon, according to a government source. (more…)

by John Helmer - Friday, August 2nd, 2002
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There is no better test of the maxim that absolute power corrupts absolutely than Russia’s Finance Ministry. Take the silver tax of May 1999, for example, and its predecessor in absolute folly, the silver edict of France’s King Louis XIV of May 1709.

At that time, Louis’ treasury was empty and his armies and administration impoverished. The desperation was finding expression each night in Paris, where statues of the king were defiled and lampooned. The Duchesse de Gramont conceived the idea of ingratiating herself in court by making a public offer of donating her silver dinner service to be melted down for the treasury, and used to fund the army’s expenses. The controller-general understood the folly of the idea. But the number of courtiers seeking the king’s favor was so great, the Mint was struck by an avalanche of table silver -too much, in fact, for Louis to have time to read and remember all of the names on the lists of the ambitious donors. (more…)

by John Helmer - Saturday, July 27th, 2002
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