The Cost of Support

Today’s New York Times article by Andrew Kramer, “Russian Auto Bailout Protects Jobs (Efficiency Not So Much)” (Tuesday April 7, 2009) chronicles the Russian governments efforts to prop up employment in automobile manufacturing including the Lada (Avtovaz) factory in Tolyatti.  The Russian government is giving billions of dollars, no strings attached,  in an effort to subsidize employment in a facility that has a wretched productivity – each worker producing on average 8 cars a year as opposed to 36 cars a year per worker at GM in Bowling Green, Kentucky.  At the same time, as identified in the World Bank’s trade protection (reported in Elisa Gamberoni and Richard Newfarmer’s “Trade Protection: Incipient but Worrisome Trends“) list, Russia in the fall imposed a tariff on imported cars.  The collapse in automobile demand in Russia has come later than the United States, according to the Times article, but it could be more severe.  And the Russian government is now supporting a no-layoff policy.

Russia and the Conundrum of B(R)ICSAM

It’s difficult situating Russia in the context of the BRICs and BRICSAM. Various articles seem to stumble in their effort to place Russia in the correct circle of influence. As far back as first CIGI Policy Brief in International Governance, (May, 2007) (the date tells you it’s not that long ago) Andy Cooper, CIGI Distinguished Fellow, tackled the curious place of Russia. The title of his piece raised the question of Russia’s leadership position – “The Logic of the B(R)ICSAM Model for G8 Reform.” Though the Brief focused principally on adequacey of the G7/8 governance, the rather unique term raised, not for the first time the place of Russia in the G7/8 as well as in BRICSAM. Russia evidences multiple identities. It is a member Continue reading