As the global economic malaise deepens, Russia’s solid economic and political climate makes it a tempting spot for investment for even the most xenophobic American politician.
Case in point: The next time Republican US presidential candidate Mitt Romney decides to brand a country a bitter enemy of America, he might want first check where his money is invested.
Despite his avowedly hawkish stance towards Russia, Romney purchased shares in Russian firms in 2011 through his equity fund. According to media reports on his 2012 tax returns, Romney invested in Russian energy giant Gazprom, as well as Russian Internet search engine Yandex.
This leads to an interesting question that may arise in the upcoming debates between Romney and the Democratic incumbent, Barack Obama: What businessman – especially one who is making a run for the White House – would invest his money into a country he derided as an enemy?
Romney attracted harsh criticism, especially from the Kremlin, for March remarks that labeled Russia as America’s “number-one geopolitical foe.” Although the statement was largely discounted as election-year hyperbole, they nevertheless set off alarm bells in Moscow.
This new revelation could prompt further research into how much the Republican contender invested in US companies compared to Russian and Chinese firms. With the US unemployment rate still sky-high, Romney could be sorely embarrassed if it revealed that he bet heavily against the American economy.
Although Romney sold off his Russian holdings as the campaign season began to heat up, his investment strategy reveals a deeper trend: In a world drowning in international financial crises, Russia’s strengths in the commodity and resource markets have made it an island of relative fiscal stability.
Russia is also forging stronger relations with China, the regional economic dynamo. In June, President Vladimir Putin made a trip to Beijing to meet with Chinese President Hu Jintao. With both leaders experiencing difficulties in their dealings with the West, the two nations found it easy to strengthen ties.
Hu Jintao echoed Putin’s sunny outlook on the bilateral relationship, saying he anticipated building a “dynamic strategic relationship with Russia.”
Moscow is likewise exerting greater influence in the region through various alliances – most notably the Shanghai Cooperation Organization, a security organization founded in 2001 consisting of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.
Russia’s considerable natural resource deposits have also offered the country economic and political opportunities. Brazil, Russian Federation, India and China – known as BRIC – are emerging, fast-growing nations within the oil and gas industry, with a collective market value estimated at $859 billion in 2011.
The strengthening of ties between Beijing and Moscow paved the way for revitalized relations between the two countries – something that even Mitt Romney can appreciate.