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Sakhalin Grab Indicates a Future of Managed Economy in Russia

Thomas Lifson, editor and publisher of The American Thinker and a well known Japan expert, just published this op/ed on the Sakhalin shakedown (hat tip RealClearPolitics).

Shell and Russia have not agreed on terms of separation, as it were. They have to negotiate, a lop-sided exercise at best. In the end, Gazprom will probably in theory “buy” approximately half the stakes of foreigners, out of “royalty income.” But in practice, it will be a form of expropriation, intended to give Russia operating control of something built and paid for by others. With this control, Russia can better master the complex technologies, and make them its own, as it were. Shell, Mitsui and Mitsubishi have no choice but to make the best of it. They will smile and talk about great progress being made, hoping that Russia will allow them to achieve some return on their investment, in order to keep their resources available in the future. We often carelessly assume that the march of progress will continue inevitably, secured by the triumph of market economies. While it is true that capitalism provides a demonstrably richer life for its beneficiaries, many powerful forces in the world do not find themselves advantaged by it. Russia, Islamofascists, and certain Euro-Socialists would rather see market forces confined and a greater number of important decisions in the hands of state or religious bureaucrats. Russia’s move against the Shell consortium is a blow against the regime of international capitalism, in the end. By itself, it is not a major affair, but as a harbinger of things to come from Russia, it is as chilling as the Sakhalin LNG whose shipment will now be delayed by Russia’s hardball tactics.

Read the entire article here.