Sunday, April 23, 2006

The Gazprom Question

Like many things that involve Putin's Russia, the Gazprom Question is not a simple one. Gazprom are a vast energy compnay worth in excess of $240 billion, in fact it's the fifth largest corporation in the world. Now I'm a tory that has faith in markets, you'd think I'd like Gazprom. They've made themsleves a world leader in the international energy market they should be commended. The problem is that Gazprom is not a normal corporation.

Gazprom might look like a normal mutlination but it is essentially an extension of the Kremlin, and it's actions - as was shown last year in Ukraine - are about political power and leverage on the international stage. Gazprom represents the worst of Putin's style of capitalism, which has linked openly traded corporations to tight state control directed through the Kremlin. It shouldn't be surprising though that a former KGB man should apply the soviet style of control to the new capitalist order. He crushed the oligarchs that threatened him (Khordokovsky) and promoted the oligarchs that supported him.

Why am I going on about this? Well Gazprom are apparently looking to buy Centrica (British Gas). They want to control the gas supply right up to the doorstep of the consumer. Now there are many out there who might think this can't be a bad thing. Faith in markets means that Gazprom will act wisely with Centrica customers else they'll lose them. But the real issue is political.

We were on the winning side of the Cold War. Let's not let our faith in markets give the Kremlin control over our energy supply.


Serf said...

I have often thought that our companies should be freely available to be bought by any company that is not government owned. That would do the trick I think.

dizzy said...

I wouldn't have a problem with that necessarily. But when it comes to Russia these days you can't easily make that distinction.