Today geoeconomics is the arbiter for both domestic
and foreign policy. Synchronizing these policies gives optimum results. Germany
and Russia have varying parameters in order to sustain their geoeconomics
momentum. However, both are looking for
a win at the expense of the other.
Who can win the waiting game? Let me assay both
Germany and Russia in their Geoeconomics makeup and crafting a winning strategy.
Germany
1. Western liberal democratic set-up is rooted in
the history and culture of Germany in the post- world war two scenario where
high-value & high-tech generated export-led economic growth. Commerce & industry are the
main pillars of the geoeconomics back-bone. Incidentally, both work as Siamese
twin in that one fails the other would fail too. Undoubtedly, commerce is the
driving force. Export volume is about 40% of the German GDP that oils the
domestic economy and to some extent subsidise German households to enable them
to enjoy standard of living much higher than elsewhere in the European neighbourhood.
2. In addition to Marshall Plan, Russia played a
major role in energizing the German industry. Pun intended deliberately by
me. It was the cheap Russian energy including natural gas that leveraged higher
volume of manufacturing for both domestic and export use. Ukraine war predicated it.
Western conspiracy intending to break German resolve in forging ahead in
geoeconomics finally had its success when pipelines bringing Russian gas to
Germany were destroyed. Soaring energy cost has eliminated the premium
cash-flow hitherto enjoyed by the Germans.
Russia
1. As a centrally planned country, Russia is best
managed by an autocrat with some semblance of democracy and public vote.
However, the power centre remained with the coterie of selected people based in
the Kremlin. Russia has an
extractive economic model that facilitates production and sale of wide
range of energy products including but not limited to oil, gas, diamonds, gold,
minerals, rare- earth and associated by-products such as fertilizer. Agro
products including wheat, marine products including caviar are notable exports
outside the mining industry. Not to forget the armament enterprises.
2. Russia never weaponized the energy sector. This phenomenon
occurred only because of the Western intransigence after the collapse of Soviet
Union when the capitalist cabal went on to humiliate Russia ending with the
Ukraine war which is currently in progress. Fashioned by hatred towards Russia
on the one hand and the jealousy exhibited chiefly by the USA as regards to the
immense wealth lying below the surface throughout Russia, US spread “Russia is
enemy” narrative. Germany fell for it.
Here is the waiting game. Germany has unwittingly joined the West looking forward to the collapse of Russia in general and Putin in particular. Pipeline shutdown was the major tool in their armoury. Putin is wise enough to diversify his buyers, making China the biggest market for his energy products. While Russia does not openly call for ruining of German geoeconomics, with tongue in cheek, Putin wants to teach a lesson or two in the waiting game!
My Direction
In the short term neither Germany nor Russia would
win the waiting game. In long
term Germany might lose, perhaps badly!
Navigating strategy amid geoeconomics, Germany should take a bold stand against Western mechanization and befriend Russia ASAP.
Cheers!
Muthu Ashraff Rajulu
Strategy Adviser
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Strategy Adviser
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