[kitchencabinetforum] ASIA-PACIFIC ECONOMY AND POLITICS

Siberia increasingly is to Putinland what Putinland is to the world, a supplier of raw
materials that those who are consuming them take without much thought to what is
happening at their source economically or ecologically, a pattern that Siberians
find increasingly unacceptable. The Kremlin uses its neighbors and Europe's
dependence on Putinlandian natural gas as a foreign policy tool to pressure states.
In 2009, Putinland cut off gas supplies to Ukraine and to Europe by extension,
causing the International Energy Agency to deem them an unreliable supplier. http://venitism.blogspot.com

Putinland has taken over the rotating chair of the Asia-Pacific Economic Cooperation in 2012 and will host this year's APEC Leaders' Week in Vladivostok. A Putinlandian Spring could ultimately be a great buying opportunity. Picture a Putinland in which entrepreneurs no longer face crushing bribery costs, shareholders have rights and investing is more about value than guessing whom the Kremlin will favor. Revolution could bring an economic renaissance.

Asia-Pacific economy is controlled by China and USA. Basil Venitis, venitis@gmail.com, points out China is the world's second largest economy after Uncle Sam. It is the world's fastest-growing major economy, with average growth rates of 10% for the past 30 years. China is also the largest exporter and second largest importer of goods in the world. China became the world's top manufacturer in 2011, surpassing USA. http://venitism.blogspot.com

China is facing a burst bubble, and the shock will provide a useful lesson in the limits of authoritarian rule. Monolithic government and state-directed investment can be effective in pulling countries out of poverty, but not in building a middle class or in reaching the ranks of the world's wealthy nations. Economic troubles will spur China's 1.3 billion people to demand more freedom and more of a voice in the way they are governed.

Putin and his men proudly declare that they have returned Putinland to
strength. In truth, they have hijacked it. Putinland 's constitution is little more than an empty shell that does a poor job of concealing the neofeudal regime of Czar Putin.

Dmitry Medvedev declares Putinland's key objective is to further liberalise trade and investment and to facilitate economic integration in the Asia-Pacific region. Medvedev expects his cooperation in these fundamental APEC spheres to yield practical results. Now that Putinland has joined the World Trade Organisation, Medvedev will be able to fully participate in trade liberalisation discussions. A consolidated position among APEC member economies should jumpstart multilateral trade talks and make them more constructive.

The private sector hardly dominates the Chinese economy. If anything does, it's
the state again. Derek Scissors points out there have been important changes in
the state sector. It has shrunk and operates very differently than it did just
15 years ago. During the 1990s, state assets were sold off, sometimes replaced
by genuinely private firms.

Scissors notes privatization met serious political opposition. In response,
during the 2000s, state-owned enterprises (SOEs) were instead converted into
shareholding entities, many of which sold stock in Shanghai, Hong Kong or
elsewhere. These shareholding firms took on some characteristics of true
commercial businesses.

There is a big difference between the Soviet era and today's Putinland. The Soviet
state spread the atmosphere of fear to prevent emergence of politics and
people's participation in it. Today, the key for the state authorities is to
make sure people are not interested in politics. A person who doesn't care about
politics or the situation with human rights in Putinland may live a comfortable
life without ever encountering an FSB officer. What suffers the most is
democracy in Putinland; the Kremlin is interested in stability, not democracy.

Medvedev points out that following the successful conclusion of the WTO accession process, Putinland is now ready to start talks on free trade agreements with APEC economies. Of course, Putinland will act jointly with Kazakhstan and Belarus, the other members of the trilateral Customs Union. Added to the potential of the Common Economic Space, this could pave the way to a fundamentally new form of APEC integration and help expand the Asia-Pacific market to the whole of the Eurasian continent.

Medvedev's bear seems now to be a very different animal. The snarling statist
bear with a statist head has been replaced by a lovable bear, and while it may
not be ready now to roll over and have its belly tickled, Russia will not take a
bite out of its rivals. Uncle Sam (US) and Uncle Ken (UK) now like to pet this
bear!

Putinland also plans to promote APEC cooperation on food security. Like all other member economies, Putinland has a stake in ensuring that food is available, affordable, safe and of high quality. In light of the growing social commitments of governments in the post-crisis period, Putinland must develop stable food markets and dampen price fluctuations. Furthermore, Putinland must continue to search for ways to ensure agricultural development based on rising mutual investments, modern technologies and compliance with quality standards.

In order to modernize Putinland's economy and industry, Putinland needs cooperation
partners from abroad, and those modernization partners are to be found mostly in
USA and Fourth Reich. That's the logic that lies beneath Putinland's new softer
foreign policy towards the West. It shows that external policy is seen as an
instrument for internal development and modernization.

Medvedev notes the prospects of greater integration in APEC are closely connected to the need to improve logistics or as it is often described within APEC to ensure supply chains connectivity in the region. Putinland is prepared to offer access to its transport corridors, which are the shortest route between Asia and Europe. Medvedev knows that they must be upgraded, which will require major investment. This is what Medvedev will be discussing with his partners, who will surely show interest in Medvedev's proposals. Putinland has developed practical ways to use modern technology to resolve transportation issues, in particular organising cargo routes, cargo handling and vehicle tracking.

Having given in on Iran sanctions, Putinland has forced itself into a corner. It
will now have to toe the U.S. line on every question pertaining to Iran.
Medvedev's decision on Iran reflects his ideological affinity of Igor Yurgens,
chairman of the management board of the Institute of Contemporary Development
think tank, of which Medvedev is chairman of the board. Both Medvedev and
Yurgens are driven by a desire to join the Western countries and occupy an
honored position at the G8 table.

Medvedev asserts that innovation-based economic development is crucial for stable economic growth. This issue, which Putinland sees as a priority, has been met with a lively response from APEC partners. Putinland will promote extensive interaction among universities, research centres and companies. Cooperation in education and developing human capital is vital, and the protection of intellectual property is becoming increasingly important. Putinland also see opportunities for advancing joint initiatives in these spheres within APEC.

China uses a classic mixture of carrot and stick. The carrot has been growth.
Even if the benefits of growth haven't been equally distributed, hundreds of
millions of people have still been taken out of poverty. Meanwhile, the stick
has been to crack down on anybody who is perceived to be stepping out of line.

The problem is that both the carrot and the stick are becoming harder to wield.
Economic growth is going to slow down in the coming decade. It then won't be as
easy to buy off potential dissent. Meanwhile, mobile communications and the
Internet are mutating in ways that Beijing will find increasingly difficult to
control.

What's more, there's a connection between political rights and economic
advancement. This was not apparent in the past three decades, when the Chinese
model was based on low-value manufacturing. Millions of people could be stuck in
factories and told to get on with the job. But it will become apparent as
Beijing tries to switch to a new model based on services and high-value
manufacturing. If this transition is to be successful, people will have to think
for themselves more. They will also have to harness the full power of modern
communications. It will then be virtually impossible to keep a lid on free
speech.