Over the past 18 months, Ukraine hit the international headlines time and again as it battled months of widespread demonstrations, bloodshed, the annexation of Crimea, snap elections, the downing of Flight MH17 and a tumbling currency, the beleaguered hryvnia. The country’s long-running spat with Russian state-owned gas giant Gazprom, which has a monopoly over the European gas market, has also been well documented since the feud first began ten years ago.
Ukraine is still largely reliant on gas from Russia and disputes over payments have crippled supply numerous times over the past decade as the two countries continue to come to contractual blows. The pipeline that transits the country also carries around half of Gazprom’s exports to the rest of Europe, meaning that the problems have also been felt much further afield.
Over the years, contracts between Russia and Ukraine have been signed, amended and restructured in an unregulated and often arbitrary way. This finally came to a head last year when Gazprom launched a case against Ukraine’s state-owned gas utility, Naftogaz, in the Arbitration Institute of the Stockholm Chamber of Commerce (SCC), claiming the Ukrainian company owed it billions of dollars in unpaid debts on gas delivered since 2009.
When it was first coined in 2001, the term ‘BRIC’ seemed little more than a quirky acronym. Since then, the term has quickly become universal shorthand for the emerging markets’ ascent in the global economy.
Brazil, Russia, India and China – and South Africa since it joined the fold in 2010 – have all come a long way since former Goldman Sachs Chief Economist Jim O’Neill first spotted their potential 14 years ago. Despite riding out the global financial crisis remarkably well, the mighty BRICS have not been left completely unscathed. The average growth rate of each country has slipped by more than two percentage points over the past decade.
At a recent IBA conference, From BRICS to MINT… and Beyond!, O’Neill said that China was the only one of the original BRICS that hadn’t disappointed him, clocking an average growth rate so far this decade of eight per cent. Although he acknowledged weaker commodity prices were partly to blame for poorer performances in Brazil and Russia, he maintained his view that rule of law is vital for economic success. If all these countries can ‘succeed in doing all the things that are necessary for rule of law, then they’re going to get somewhere’, he says.
As Western sanctions against Russia stepped up a further gear last week, a contractual dispute brewing between France and Russia threatens to have legal and economic ramifications.
It all started back in 2011 when Russia commissioned France to build two Mistral navy assault ships (bâtiment de projection et de commandement, or BPCs) for a cost of €1.2 billion. However, in recent months France’s participation in the venture has been brought under increasing scrutiny amid growing tensions over Russia’s continued involvement in the unrest in eastern Ukraine.
The French government initially resisted pressure to halt the delivery, saying it would respect the existing contract.
Despite this unwillingness to budge, the mood suddenly changed on the eve of the NATO summit in Wales on 3 September, when France announced it would suspend delivery of the two ships due to concerns over the ongoing unrest, saying in a statement:
‘The recent actions of Russia in the east of Ukraine violate basic security in Europe. The President…has found that, despite the prospect of a ceasefire, which has yet to be confirmed and implemented, the conditions for France to authorise the delivery of the first BPCs are not in place.’
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