Upper Volta with Exxon

WASHINGTON, May 27 (UPI) -- Back in the Cold War's final decade of the 1980s, mocking Westerners would sometimes call the crumbling Soviet Union "Upper Volta with rockets." And as President George W. Bush and other Western leaders gather this week in St. Petersburg for the 300th anniversary party that President Vladimir Putin is having in his hometown, they might want to update the old jibe.

Think of Russia today as "Upper Volta with Exxon."

Considered as an energy conglomerate, Russia is doing fine. The country's gross domestic product has enjoyed 20-percent growth in the past three years. Foreign exchange reserves are up six-fold to $61 billion and almost a third of Russia's international debt has been paid off. Exports have quadrupled since Putin came to power, real incomes are up 30 percent, and for the first time in 50 years, Russia has become a grain exporter.

The ruble is strengthening, and U.S. Ambassador Sandy Vershbow told the graduating class of Moscow's New Economic School last week that Russia was about to experience a trade and investment boom with the United States. European trade is booming already, with German, Irish, French and Dutch hypermarkets opening around the cities and IKEA booming in Moscow and British Petroleum buying a 50-percent stake in Tyumen Oil, Russia's third-biggest energy group.

The problem is that outside Russia's thriving Exxon economy the non-oil sector remains a massive disappointment and a social disaster. And this is where most of the population struggles to get by. The World Bank reckons that one Russian in three lives below the pitifully low poverty line. Low birth rates and high death rates make Russia a demographic disaster. The Novosti press service reported this week that half of today's 16-year-olds in Russia will not live to see their 60th birthday.

In his State of the Nation address this month, Putin pulled no punches. The economic achievements were "very modest," he said, and largely attributable to high oil prices. Poverty was widespread; economic growth was unstable and slowing fast while unemployment was rising again.

"The powers that our bureaucracy has remain vast," he complained. "And yet, despite the huge numbers of functionaries, there is a severe dearth of personnel in the country, at every level and in all structures of government. There is a dearth of modern managers, of efficient people."

With an economy smaller than that of Holland, Russia would not be taken seriously by Bush and the other visiting world leaders were it not for the relics of Soviet nuclear power the Kremlin still commands, its oil and gas reserves and its strategic location. Still the world's largest country, with Europe to the west, China and North Korea to the East and the restive Islamic world to the south, Russia is at the heart of some of the world's most dangerous neighborhoods.

And like France and Britain, Russia also holds that other useful symbol of global significance that is so comforting to formerly major powers -- a permanent seat on the U.N. Security Council, with a veto on the world body's decision-making. And as Bush and British Prime Minister Tony Blair discovered to their frustration on the eve of the Iraq war, those U.N. vetoes still matter.

Moreover, Russia still thinks of itself as a great power, able to play the game of nations by forging temporary diplomatic alliances with France and Germany and China against the American hegemony, while cozying back up to Washington almost at will.

This week, for example, Putin spent three days with his first guest at the St. Petersburg events, new Chinese leader Hu Jingtao. And on the eve of Hu's arrival, Putin was wooing (and flattering) the Europeans again, telling a St. Petersburg news conference, "If Europe wants to be an independent and credible center of forces in the world, the shortest and most reliable way to reach this goal is to have good relations with Russia."

The fact is that for all its courtship of the French and Germans, and for all Putin's readiness to swallow NATO enlargement, Bush's missile defense system and Bush's ditching of the venerable 1972 Anti-Ballistic Missile Treaty, Putin has very little to show for all his gestures to the West.

The European Parliament still issues snooty condemnations of the war in Chechnya. Russia's hopes of joining the World Trade Organization remain on hold. The U.S. Congress still has not bothered to retire that humiliating relic of the Cold War, the Jackson-Vannick amendment, that makes Russia's trade with the United States conditional on an acceptable rate of emigration for Russian Jews. And from next year, Russian visitors to the United States will join Arabs in being photographed and fingerprinted on arrival. (Even the French are not subjected to that kind of treatment.)

So do not take at face value all the fraternal embraces and the ringing rhetoric of friendships and strategic partnerships that will be heard at St. Petersburg this week. Russia is still far from being even a candidate member of the West. Still, Putin might reflect, it could be worse -- were it not for all that oil. Upper Volta with Exxon is an improvement on Upper Volta with rusting rockets that might not even work any more.