At this time Igor Sechin seems to be facing defeat in his attempts to increase the influence of Rosneftegas (and himself) in the privatization of government owned assets in Russia’s fuel and energy sector. Prime Minister Medvedev (and his economic ministers) are demanding that Rosneftegas hand over most of its accumulated cash to the official budget in order to help pay for President Putin’s pre-election expenditure promises.

This has further stimulated Sechin to seek to develop a relationship between Rosneft and BP.

Are these developments good or bad for “Russian economic reform”?

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Both Russia and Australia are experiencing some sort of increase in official interest in Asia. There is nothing cultural in this, as Russians would in their hearts prefer to look toward Europe and Australians would prefer to look toward the US and UK.

Despite the fact that in many ways Russia is geographically better placed to take advantage of the economic growth of China, Australia is likely to continue to outperform Russia in taking advantage of the economic rise of Asia. But with one proviso – which I will address later!

In Russia, the most obvious manifestation of the interest is the huge spending (and often stupidly excessively, a la bridge to Russky Island) on the APEC Summit in Vladivostok and recent creation of a “Far East” Ministry.

In Australia, the most obvious manifestation of the interest is an “Australia in the Asian Century” report being prepared by a team led by former head of the Australian Treasury, Dr. Ken Henry. See: http://asiancentury.dpmc.gov.au/about

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