Big Business in a Multipolar World

No image available.

Journal Title: International Affairs

Issue Edition: Vol. 66, No. 1

Author: A. Borisov


Big Business in a Multipolar World


Author: Alexander Borisov, Professor, Department of International Relations and Foreign Policy of Russia, Moscow State Institute (University) of International Relations, Ministry of Foreign Affairs of the Russian Federation, Doctor of Sciences (History); albor@rambler.ru

Source: International Affairs, Vol. 66, No. 1, pp. 31-46

DOI: http://dx.doi.org/10.21557/IAF.57744975


Key words: U.S.-China, Huawei, geopolitics, Nord Stream 2, Northeast Passage.

THE 20TH CENTURY went down in history as a century of ideologies and sharp confrontation of states belonging to different systems, the Soviet Union and the United States in the first place. The 21st century has already demonstrated a mounting geopolitical confrontation of great powers that drew international business interests into their whirlpool. It turned out that the main actors of world politics cannot agree on new principles of economic cooperation, free competition and respect for the spheres of interests - they have chosen the road of mounting worldwide tension.

America and China

THE AXIS of geopolitical and geoeconomic confrontation is gradually shifting toward the relations between the United States and China. With Donald Trump in the White House, Washington no longer cherishes the illusion that it would transform China into a "manageable partner" in the system of global American interests. The U.S. has obviously missed the moment when strong state and private corporations, especially in the high-tech branches, rose from the soil of Communist China and its one-party system. Today, they determine the pace and trends of scientific and technical progress and have challenged the seemingly unattainable leadership of the United States.

This has been clearly demonstrated by RAND Corporation, America's biggest analytical center, which in March 2019 published its latest report with a telltale title "Russia Is a Rogue, Not a Peer; China Is a Peer, Not a Rogue." It has offered the American elite some far from comforting assessments and forecasts and instructed it how to place accents and identify priorities in the unfolding global confrontation.

In 2016, China became the top goods export destination for 13 economies, constituting 9.2% of the global economy, and the top source of goods imports for 49 economies, constituting 53.9% of the global economy. In contrast, in 2000, the United States was the top goods export destination for 33 economies and the top source of goods imports for 28 economies. By 2016, the United States remained the top goods export destination for 30 economies but served as the top source of goods imports for 20 economies. "China is thus displacing the United States as both the leading goods exporter and the leading goods importer in a growing number of markets," write the authors [9].

Corporate America is worried or even is openly hostile to the Made in China 2025 plan that has defined ten promising innovation trends and the Chinese leaders' ambitious plan to double the country's GDP by 2049, its 100th anniversary. If realized, it will make China the main economic partner for nearly 70 countries with 66% of the world's population and 43% GDP of Planet Earth. China's increased economic pressure on the world market earned its leader Xi Jinping the title of "president-expansionist" and "red emperor." In 2017, during his visit to Beijing, President Trump in his typically American condescending manner called Xi Jinping "the King of China" which the latter never appreciated.

In fact, seen from the American shores, China's manners in doing business bring to mind the history of America's foreign economic expansion pursued a century ago with well-known results for other even congenial countries: Great Britain, for example, moved away to give space to the United States. Unwilling to follow the same road, Washington is bracing itself for a long struggle against the new claimant for world leadership: unlike its "elder sister" (that lost its colonial empire after its Pyrrhic Victory in World War II that Churchill called "unnecessary"), it has no recent history of disasters and remains the most powerful world military and economic power. There is an opinion that while geopolitically the world is growing increasingly multipolar, it so far remains unipolar geoeconomically: Washington has prevailed over its opponents through some successful arm-twisting.

The international scandal around Huawei, China's biggest telecommunication corporation that has set up a 5G network to insert into the World Wide Web, was the latest and most typical example of deep-cutting contradictions between the two economic giants. Washington reacted nervously to what it interpreted as China's intention to push its main rival on the high-tech market to the side.

Washington did not hesitate to use "foul" methods of competitive struggle, as well as the might of American diplomacy and special services; it put pressure on its closest allies and partners from among NATO and EU members and, under a false pretext that China was using high technologies for espionage, even on the so-called Five Eyes (FVEY) Anglophone intelligence alliance.

The highly tense relations between Russia and the United States are explained, to a great extent, by clashes on the fuel market and the fact that the sides are so far not ready to arrive at a mutually acceptable global modus operandi.

Arrest in Vancouver (Canada) of the financial director of the company, daughter of its founder who was former military, crowned this "game without rules": the company was accused of violating the regime of American sanctions imposed on Iran. Since the arrest that bared the ties between geopolitics and commercial interests was made by Canadians, they also became a part of the scandal.

By that time, Beijing had rejected the behests of Deng Xiaoping "Do not push forward" and "Cross the river by feeling the stones" which had remained gospel truth far too long. China's response was harsh: as if by chance, several Canadians found themselves behind bars. One of them was recently a high-placed diplomat, another, a drug dealer, was sentenced to death after repeated court hearings. The U.S. has met its match, so to speak. The story has not ended yet Europe, including the UK, refused to follow the United States and ban the Huawei technologies on its territory.

Trump turned to protectionism and tariff wars with China in order to cut down the huge American trade deficit with China ($419 billion in 2018) caused not by China's malice but by fair competition.

Back in 1876, at one of the world's first international exhibitions (the first of that kind organized on American soil in Philadelphia), now known as Expo, America presented a wonder of industry - the latest electric motor, Britain demonstrated an upgraded steam engine, Germany boasted of a giant lathe for gunsmithing while China exhibited 12 silver spoons from the treasury of Qing Dynasty. This caused no surprise: a backward nation, its members perishing by thousands at railway construction sites in the United States.

Today, the picture is different: the United States that lacks the courage to accept the natural course of history explains China's breakthrough, of which Huawei is one of the examples, by branding it "the den of the technologic thieves"; Washington insists that American firms working in China are forced to share their secrets within JVs, that Chinese businesses and Chinese economy are flourishing under the patronage of the state, on state subsidies and within the system of state economic management. America can barely conceal its demands that China should revise its methods of economic management in favor of the Western liberal model. So far, Americans have been avoiding bigger troubles because Chinese demonstrate restraint and still want to arrive at a consensus. This will finally catch up with the United States - the laws of fair competition have not been annulled.

With the largest amount of America's sovereign bonds, China has enough means of retaliation. Today, with over $1 trillion-worth sovereign debt, the United States can print money to pursue its costly external and military policy. In the trade war the U.S. unfolded early in 2018, China retaliates with precisely targeted measures that affect those of the American states that brought Trump to power and with trade tariffs of billions of dollars.

China can devalue its currency to stimulate exports, something that Washington fears more than anything else. This means "a war is a war:" Beijing will not back off in the trade wars started by Washington. The Chinese, however, are ready to mutually acceptable reasonable compromises, but they will continue fighting for the world's markets. Beijing has stated that there are no reasons to expect that China will be crawling to America in response to its threats.

Chinese Conquer the World

VERY MUCH in line with the laws of geopolitics, the center of this struggle is gradually shifting from the backward peripheries to the Old World, its Western center. Washington was moderately worried while Chinese were pushing into Africa, Asia (including Central Asia) and the Middle East; they remained more or less indifferent when Chinese reached Latin America, Washington's backyard. Americans were waiting for what they thought would happen sooner or later: either Chinese drive will fizzle out or they will be repulsed at least by some of the targeted countries.

American diplomacy invented a counterargument: The recipients of Chinese investments would, sooner or later, find themselves in "debt bondage" and deprived of their sovereignty. This comes from the superpower that never respected and does not respect the sovereignty and independence of others. Expansions differ - one's own is justified while others should be rebuffed.

It seems that its militarized consciousness does not allow Washington to fully understand the crawling nature of China's global economic expansion and its inevitable and long-term effects for Washington and its interests. It should be said that China has a huge experience of trade that goes back into centuries, that was not damaged by the Communist regime even during the grimmest periods of the "cultural revolution" and that was retrieved by the ruling party when in 1978 it embraced the policy of "reforms and openness."

Having become another "workshop of the world" (in the 19th century, this title belonged to Great Britain), China used its colossal export potentials to accumulate big dollar reserves. This money should be invested abroad. The local purchasing capacity is still too low while the doubts about sustainability of American currency are too high. The country with the population of nearly 1.5 billion especially needs external markets, raw materials and hydropower resources.

These objective and deeply rooted requirements prompted the idea of transcontinental infrastructural logistic (transportation) projects covering Eurasia and the neighboring seas and involving tens of states. Announced in 2013 when a new cycle of power headed by Xi Jinping began, the project today known as One Belt One Road does not exclude a possible connection with the Eurasian Economic Union (EAEU), of which Beijing informed the world in May 2015.

The Anglo-Saxon fans of Halford John Mackinder, father of geopolitics, and his ideas of the "geographical pivot of history" and the Eurasian Heartland as the core of world order that he had offered in his well-known article published in 1904 [10] and that, in its time, had caused quite a stir comparable to the noise raised by Francis Fukuyama's "end of history" nearly one hundred years later, became immediately aware that the seemingly inoffensive or even peaceful Chinese project was, in fact, charged with a great threat to the America-centrist world.

From the very beginning, American geopolitics relied on its fundamental doctrines of "exceptionalism" and "predestination" that ignored even a possibility that another hegemon might appear on the other side of the world, in Eurasia; whoever it might be is unimportant - either the Kaiser or fascist Germany, the Communist Soviet Union, post-Soviet Russia or China on the rise. American historians can tell you that driven by these ideas the United States was involved in two world wars on the side of the victors; it won the Cold War against the Soviet Union and its East European allies. In his book The Revenge of Geography: What the Map Tells Us About Coming Conflicts and the Battle Against Fate, American scholar Robert Kaplan has written: "Making sure that one power in the Eastern Hemisphere does not become unduly dominant, so as to threaten the United States in the Western Hemisphere" is one of the major tasks [11].

Judging by the commentaries offered at different levels, from the media to analytical reports and official statements, China's global initiative took Washington by surprise. This speaks volumes about Washington's devotion to the old and outdated dogmas and its inability to think in a new and very different way. Confusion in Washington was deepened by the confusion of sorts in the camp of America's closest allies tempted by the Chinese initiative that promised considerable investments for Europe starved for funding due to a fairly long recession. Xi Jinping's European tour in March 2019 (when he visited Italy, France and Monaco) was an impressive breakthrough.

Italy proved to be the weakest link in the G-7. Its populist coalition government knocked together out of left- and right-radical forces ostentatiously challenged Brussels's financial and budget discipline and was insisting, as much as it could, on their country's national interests. The Chinese leader concluded his visit to Rome with signing a memorandum of mutual understanding in support of the One Belt One Road program and 29 business contracts on the total sum of €2.8 billion invested in several big infrastructural projects (the ports of Genoa and Trieste, transportation arteries, bridges, etc.). Together with earlier acquired 51% of shares of the port of Piraeus (Greece) and the possibility to use the port in Valencia (Spain), Italian ports are expected to become facilities of Chinese export maritime and land shipping routes within the One Belt One Road program.

Italian self-confidence stirred a lot of jealousy in the main EU "shareholders," France and Germany in the first place, and unconcealed irritation on the other side of the ocean. Americans treated everything as a

mine under the building of "trans-Atlantic solidarity" that shattered its influence in Europe. The European grandees were more worried, whether with good or no reason at all, by the fact that the European unity was gradually undermined and that China was acquiring strategic European assets even though before that China had already invested a lot of money into European economy, Germany in the first place.

To demonstrate the European Union's cohesion, President of France Emmanuel Macron unexpectedly changed the format of Xi's official visit to Paris. The Chinese side was stunned to learn that Chancellor of Germany Angela Merkel and Head of the European Commission Jean-Claude Junker were also invited. The European side called on the Chinese guest to maintain "balanced interests" and to take the interests of partners into account: the hosts were obviously worried by China's drive. On the eve of the visit, the European Commission, tuned to Washington's sentiments, issued a document "EU-China: A Strategic Outlook" in which it called China "an economic competitor in the pursuit of technological leadership, and a systemic rival promoting alternative models of governance" [12].

Germany occupied the toughest position which is probably explained by the export nature of German economy (over 50% GDP) that already caused clashes with the Chinese Drang. Germans deemed it necessary to warn other countries not to be "naive" when dealing with China's invitation to take part in widening the 5G network. It means is obviously more than playing into the hands of Americans.

It looks as if Europe is being torn apart between the desire not to sell cheaply and to preserve the united front of the European Union and the West as a whole. The high-flown deliberations of President Macron about the importance of preserving the interest of Europe and his "touching" concerns about the interests of the French businesses is the best example of European ambivalence. After the catastrophes of Boeing 737 MAX in Indonesia and Ethiopia that echoed all over the world, China demonstratively met Paris halfway and refused to buy Boeings. Instead, it bought 300 Airbus liners to the total sum of €30 billion. The French business community appreciated this as a great success of their president, a diligent graduate student from the Rothschild financial empire.

"100,000 Tons of Democracy"

ENERGY and hydrocarbons form the sphere in which the ties between transnational business and geopolitics are especially clear: oil and gas resources and transportation routes, diversification of supplies and energy security figure prominently in the interests of all great powers and are responsible for their disagreements. They determine the fates of small states and, in the final count, the war and peace issues. Despite certain individual agreements, the world as we know it today, is still far removed from a broad consensus on these issues. Today, it is plunged in the never-ending struggle of "all against all."

More than that: today, unlike the 1990s when business interests were more or less coordinated on the international scale on the basis of cooperation between the biggest energy corporations, both state and private, we are watching the rising tension in interstate relations along the East-West line. The situation on the world energy market is gradually developing into a source of great troubles and new geopolitical risks.

It seems that this is the main reason of excessive politicization of the oil and gas business that has become an instrument of geopolitical rivalry of the great powers in which the United States calls the tune. One cannot but wonder whether international cooperation or confrontation is better suited to the financial interests of business.

Starting with the "kerosene trust" of the Rockefellers, Americans were the trailblazers of the oil business even though early in the 20th century the Baku area produced more oil than Pennsylvania. The clock of the oil era started ticking on the eve of World War I, when First Lord of the Admiralty Winston Churchill ordered to transfer the Royal Navy from coal to oil. For decades, the oil business was dominated by the notorious "Seven Sisters" (a group of the biggest, mainly American oil companies) that left their predatory imprint on the business and tied it to diplomatic and military support of their governments.

For many years, American domination in oil production and oil business ensured to a great extent American leadership in international affairs as a whole. The closed nature of Soviet economy and the minimal presence of the Soviet Union on external markets throughout the longer part of its history, as well as the fact that for a long time after decolonization the developing countries could not shake off their dependent status, made it much easier for the Americans to retain their privileged position on the market of hydrocarbons.

This explains America's hostile response to the Soviet Union's first attempt in the 1970s to break the blockade and bring its hydrocarbons to the European market (the Druzhba oil pipeline and the "gas for pipes" deal). These were the first moves of the future "Great Game" on the world geopolitical chessboard.

As the biggest naval power, America built its energy strategy on control over the main maritime communications and manipulations with the raw material producers in the interests of American corporations and geopolitical interests of the United States as a superpower. "The U.S. ambassador to Russia, Jon Huntsman said about the aircraft carriers: 'Each of the carriers operating in the Mediterranean at this time represent 100,000 tons of international diplomacy'." They were used to block sea straits and other "bottlenecks," punish the displeased and the disagreeing, scare the disloyal regimes, etc.

"Aircraft carrier diplomacy" replaced "gunboat diplomacy." After World War II, when James Forrestal, the first head of the Pentagon, was defending the Navy budget in Congress, frightened liberal Senator Claude Pepper still very much devoted to prewar pacifism asked the bellicose minister, "Are you planning to send our ships elsewhere?" only to hear a mocking answer, quite in tune with the beginning Cold War, "No, not everywhere, only where there is sea" [13].

Its domination on the market of energy sources gave the United States not only an access to the world's biggest oil and gas fields (today, with the new extraction technologies the United States uses on its own territory, this is no longer important) but also allowed it to manipulate with prices to undermine the rivals' economic positions. A legend is still alive that in the 1980s, Saudi Arabia under American pressure brought down the oil market to deprive the Soviet Union of currency proceeds thus accelerating its disintegration.

Today, the general strategic situation in the world has changed a lot contrary to the interests of the United States. Its geopolitical interests no longer fully harmonize with those of the oil-producing countries, even of the most loyal of them. American anti-Russian sanctions cost American corporations tens of billions of dollars. ExxonMobil, for example, had to cancel the deal with Rosneft on the Arctic shelf. American business had lost a lot due to the trade ban with Iran, another big oil and gas producer, both before the Joint Comprehensive Plan of Action (JCPOA) was signed in July 2015 and later, when in May 2018, under President Trump, the United States was the only one among the six signatories that withdrew from it.

The fact that all other countries, including India, China and some of the American allies, continue trading with Iran by insisting on all sorts of exceptions from the regime of sanctions is very offensive to the U.S. The European Union went even further: in disregard of Washington, it created a special clearing mechanism with Iran outside the dollar zone. The U.S. Secretary of State Michael Pompeo admitted that Iran lost $10 billion because of sanctions. He, however, said nothing about the losses of American businesses. It should be said that European companies find the American market attractive to the extent that they reject tempting deals with Teheran because of possible American sanctions.

China's geographically vulnerable situation that forces it to get oil and gas from the Middle East via the Strait of Malacca accelerated the construction of pipelines from Siberia which guarantees diversification of hydrocarbon supplies and their safety. These pipelines are inaccessible for the American Navy in case of extraordinary situations. The majority of experts are convinced that George W. Bush's invasion of Iraq in 2003 and the later efforts of the United States to keep it within its orbit are explained by the geopolitical struggle for resources rather than by the desire to bring democracy to the people of Iraq.

In the course of time, it is becoming clearer that the civil war in Syria that began in 2011 was nothing more than a cynical attempt to use its territory under the guise of popular protests of the Arab Spring type and violate its sovereignty in order to build a network of pipelines from the oil-and gas-rich Gulf monarchies to Europe to change the balance of power and undermine Russia's interests.

Prosperous Libya, the territory of which contains over one-third of African oil reserves and which obeyed Washington without a murmur - under its charismatic leader Muammar Qaddafi, it voluntarily folded up its nuclear power program, - fell victim to a military intervention of some of the NATO countries (France, Britain and the United States). At the best of times, Libya accounted for 11% of oil imports (about 1.5 million barrels a day) of by European countries (France, Italy, Germany, and Spain) and served a reliable barrier against migration flows from the inner areas of Africa to Europe.

After regime change realized by the West with the use of force and physical liquidation of the proud leader of the Jamahiriya, the state fell apart and plunged into internecine wars and terror. International corporations, Russian corporations among them, sustained great losses. It seems that in spring 2019 the country entered another stage of the civil war making return to normalcy even more illusory. In an interview to The Atlantic, President Obama, with the benefit of hindsight, admitted that invasion of Libya had been the greatest political mistake of his presidency: "Mess is the president's diplomatic term; privately, he calls Libya a 'shit show'," that cost the American ambassador his life at the hands of terrorists [14].

The highly tense relations between Russia and the United States are explained, to a great extent, by clashes on the fuel market of fuels and the fact that the sides are so far not ready to arrive at a mutually acceptable global modus operandi. In oil-rich Venezuela (with 20% of world resources against 2% in the United States), these relations have come dangerously close to the red line; some experts even started reminiscing about the Caribbean Crisis. This happened because Washington refused to accept the government of Maduro who succeeded President Hugo Chavez as head of the left populist Bolivarian regime supported by Russia, China and certain other countries.

The United States decided that time has come to revise certain parts of the well-known Monroe Doctrine of 1823 that warned the Europeans against interference in what was going on in the Western Hemisphere and in its first article promised, in the name of the United States, "not to interfere in the internal concerns of any of its [Europe's. - Ed.] powers." In the course of time, this self-imposed obligation was pushed aside which is best illustrated by what is going on in Ukraine, filled with American military, according to Sergey Lavrov. The statement that the "American continents... would not to be considered as subjects for future colonization by any European power" is repeated persistently and threateningly.

A more or less similar "business politics" are pursued on the European gas market mainly in relation to the Nord Stream-2, the second gas pipeline that will bring Russian gas to Germany. It has been said many times that Russia and Germany treat it as a purely commercial project; at the same time, Americans and certain East European supporters look at commerce as part of great geopolitics. The United States wouldn't mind capturing the lucrative European market for its liquefied gas even though its cost is higher by an order than the Russian gas and it is mostly sold on the Asian markets. In the final analysis, Washington, having caused a lot of problems for the sides involved in the project, retreated; the breach between the interests of the Atlantic partners became wider while Germany, the key EU country, rose to a new level of independence.

Arms Business

THE MARKET of armaments has developed into an arena of fierce rivalry for the simple reason that in terms of profit it is one of the most lucrative or even the most. Dominated for a long time by monopolies that imposed their prices, the market remained outside the sphere of normal price formation. During the Cold War, two ideological antagonists - the United States and the Soviet Union - divided this market among their clients; in post-Soviet time and during Russia's temporal absence from the market, Americans controlled more than a half of arms sales in the world.

For Washington, trade in armaments is a commercial and a geopolitical enterprise, an important part of its strategy of world domination. Its military superiority allows it to keep other states in check and, from time to time, remind those who try to object or even protest who is the boss. This explains the very sharp response of the United States to and its intolerance of the efforts of its rivals (especially Russia) to elbow it out from its first place on the arms market. This is mainly related to high-tech aviation, air defense and anti-missile systems. The experience of America's latest wars from Vietnam to Afghanistan, Iraq and Syria demonstrated that it had successfully used them against weaker enemies.

Today, Russian air defense systems S-400 Triumf, NATO's nightmare, according to Stern [16], are in the center of struggle on the arms market. Washington knows only too well that these latest defense systems have outstripped the outdated American Patriot systems of 1981 and deprived the Pentagon of its impunity if it uses its air force against the "guilty" countries.

The ministry of armed forces of China and its leaders responsible for the use of new weapon systems were the first objects of American sanctions imposed on them for buying Russian anti-missile systems and Sukhoi Su-15 fighters. As could be expected, Washington failed to wreck the deal. After successful testing, Russia-produced S-400s were put on combat duty. India, which buys up to 30% of the total sales of the military-industrial complex of Russia, was identified as the next target of American intimidation. This, however, did not happen. In the eyes of the United States, "the largest democracy in the world" looks as the strongest counterweight to China, therefore, after a lot of deliberations, it was decided to remove New Delhi from the Countering America's Adversaries Through Sanctions Act.

Washington was shocked by the decision of the Turkish government to buy four squadrons of Russian air defense systems S-400 Triumf for $2.5 billion (half of the sum to be paid by installments). For the first time in the 70-year long history of NATO, one of its members violated the unwritten law and bought weapons from the country officially identified as America's adversary.

The events in Syria that entered the period of political settlement after the fierce civil war became an important watershed in the history of the Middle East. Russia has greatly consolidated its positions in the region lost after the Soviet Union's disintegration. The Arab media started talking about Russia's return to this part of the world and about America's "weakened" positions. Geopolitical shifts were followed by new chances to invigorate business relations with the Arab countries that anyway want to move away from their one-sided dependence on the United States on the arms market and widen the group of arms suppliers. Early in 2019. thirteen countries, including Egypt, one of the biggest customers of the military-industrial complex of Russia, as well as Saudi Arabia, Qatar, the UAE, Bahrain and other countries close to Washington, said that they wanted to buy Russia's air defense systems and other weapons.

Stealing a March

THREE DECADES of international business activity in the new post-Soviet market environment taught Russia's foreign policy how to bring together geopolitical and commercial principles. Russia has partially restored the foreign economic positions lost after the Soviet Union's disintegration by switching from ideological to pragmatic rails. Market reforms, new types of property and the principles of private-state partnership allowed it to succeed where Eastern Europe failed. Russia preserved and, having entered the new century, strengthened its strategic economic branches; it left the Soviet system of state monopoly behind to move to the so-called "natural monopolies" orientated at external markets where they can compete as equal with Western transnational corporations. On the one hand, this provided Russia's economy with new opportunities, on the other, created big foreign policy problems.

Indeed, faced with the challenge of Russian businesses, its most competitive and most developed branches, on the world markets, the West showed no enthusiasm. More than that, with Vladimir Putin as President of the Russian Federation, the country stabilized and the most ambitious of the Russian oligarchs "tamed," Russia promptly demonstrated that it was a strong rival of Western companies because of the specifics of its economy orientated at winning external markets. In 2005, the Kremlin declared that Russia had become an "energy superpower"; later, Western propaganda started talking about the oil and gas sector of Russia as its "geopolitical weapon."

The West did not like Russia's balanced diplomacy, efficiency of Russia's support of national businesses which brought good results, in short, everything that is called strategic proactive approach. This was true of the far and near abroad. Gas pipelines that bypassed Ukraine took into account its domestic instability and its persistent and obviously long-term anti-Russian policy. The new ports on the Baltic no longer allow the Baltic NATO members to use transit as an instrument of blackmail, to say nothing of their financial losses.

Russia was actively involved in setting up a "gas OPEC"; it plays the leading role on the natural gas market. Novatek started gas extraction on Yamal with the use of latest technologies, allowing Russia to move to the liquefied gas market, before that the weak point of Russia's oil and gas branch. The Russia-controlled Northeast Passage has offered new opportunities.

During the last thirty years, not everything was going on smoothly and successfully. Moscow had to pay for its economic naivete and political shortsightedness of the 1990s; its inability to foresee the repercussions of the inevitable "asset recovery," that is, overcoming the unfavorable results of the Cold War and restoration of its national identity as a great power with a glorious history. As soon as President Putin began stabilizing the situation in Russia and pursuing the foreign policy in its interests, the West started accusing Russia of violating the "rules of the game," of undermining the foundations of the world order and ignoring the experience of Germany and Japan that, having lost World War II, learned its lessons and succumbed to the system of vassal dependence established by the United States.

Russia's financial and economic interdependence with and its integration in the external world dominated by the United States would allow the West to expect that sanctions would change the vector of Russia's foreign policy or even destabilize the country to bring it to regime change in line with the "color revolutions" pattern. The mechanism of sanctions was elaborated by the collective West; it was intended to maximally damage Russia's economy, doom it to international isolation or "geopolitical loneliness," of which Vladislav Surkov wrote in his article "The Loneliness of the Half-Breed" [18].

The United States, the main inspirer of sanctions, based them on Russia's poorly diversified economy that depended on the developed countries in the high-tech sphere. This was especially obvious since the sanctions were introduced during the world economic crisis of 2008 ("the first global") and low oil prices.

The peak of the sanctions has been left behind, especially in view of the changing sentiments in the EU countries. Russia's ability to "take the punch" and to respond in kind took the West by surprise (Russia's agricultural counter-sanctions proved to be painful for the EU); Russia managed to substitute imports in some of the most important branches with local products and find the rest of needed technologies and money in the east.

Russia's response was restrained. Business does not tolerate wounded pride in foreign policies or vengefulness even though in some cases profit cannot be the measuring rod of national interests. In his time, great Mahatma Gandhi said on a different occasion: "An eye for an eye will only make the whole world blind."

To a certain extent, the fact that Washington cannot resolve the important global and regional problems without Russia is the latter's asymmetrical answer to the American sanctions. The world is interconnected: if a state acts deliberately and consciously against the interests of other countries, it can hardly expect to be met halfway when it needs this.

The time of Russian idealism has passed; the logic of geopolitical confrontation and business rivalry, where is no place for the only hegemon, has its own laws. That's how a new polycentric world is being formed.

LIST OF SOURCES

1. Zakaria, Fareed. "Davos Is a Microcosm of the World - and the Outlook is grim," The Washington Post. January 24. 2019.

2. Clark, Christopher. The Sleepwalkers: How Europe Went to War in 1914. New York. 2013.

3. Rosenberg, Alfred. Politicheskiy dnevnik. 1933-1944. Moscow, 2015, pp. 264, 277-278, 314.

4. picker, henry; Haffner, Sebastian. Plan "Ost." Kak pravilno podelit Rossiu. Moscow, 2011, pp. 198-200.

5. Garten, Geffrey E. "Business and Foreign Policy," Foreign Affairs, May/June 1997.

6. Ibidem.

7. Hufbauer, Gary Clyde; Schott, Jeffrey J.; Elliott, Kimberly Ann. Economic Sanctions Reconsidered. 3rd. Ed. Peterson Institute for International economies. June. 2009, pp. 87-88.

8. Cohen, David S., Weinberg Zoe A.Y. "Sanctions Can't Spark Regime Change," Foreign Affairs. May/June 2019.

9. Russia is a Rogue, Not a Peer; China is a Peer, Not a Rogue: Different Challenges, Different Responses. RAND Corporation. March 2019 // https://www.rand.org/pubs/perspectives/pe310.html?fbclid=1...

10. Mackinder H.J. "The geographic pivot of History," The Geographical Journal. London. 1904. April, p. 422.

11. Kaplan, Robert. Mest geografii. Chto mogut rasskazat geograficheskie karty o gryadushchikh konfliktakh i bitve protiv neizbezhnogo. Moscow, 2016, p. 365.

12. Feniks (Kitay) (ifeng.com) 26.03.2019; See also: //inosmi.ru/politic/20190326/244813841.html

13. Borisov A.Yu. Tak nachinalas "kholodnaya voyna." Moscow, 1983, p. 50.

14. Goldberg, Jeffrey. "The Obama Doctrine: The US president Talks through his hardest Decisions about America's Role in the World," The Atlantic. April 2016.

15. Wiener Zeitung. 04.04.2019.

16. Kramper, Gernot. S-400 Triumph - Putins Rakete, die auch Stealth-Jets der USA vom Himmel holt," Stern. 13.04.2019.

17. El Pais. 02.04. 2019.

18. Surkov, Vladislav. "Odinochestvo polukrovki," Rossia v globalnoy politike. No. 2. mart/aprel, 2018.