RUSSIA has wiped out its Soviet-era debts with a repayment of $US23.7 billion ($31.1 billion) that symbolises the country's transformation from economic basket case to powerhouse. The dramatic display of Russia's new-found economic clout comes just eight years after it defaulted on more than $US40 billion in debt.
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The move knocked about a third off the country's foreign debts, which previously stood at $US70 billion. Russia had been due to pay off the debts by 2020, but the sharp rise in the price of oil has engineered a dramatic improvement in the country's fortunes. That enabled it to bring the repayment forward, at an estimated saving of $US12 billion.
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In July, Mr Putin said: "We used to live with our hand held out for many years ... but now the Russian economy cannot only repay debts, but do so ahead of time." The Finance Ministry said the repayment would reduce Russia's foreign debts as a share of GDP to just 9 per cent.
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Christopher Green, senior economist at the Moscow Narodny Bank in London, said the move had political implications, as well as making economic sense. "It reflects the emergence of Russia as an economy on to the global stage," he said.
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Ever heard of a guerilla war? The Art of War? Sun Tzu? Any of those ring a bell? What do they teach these guys at Westpoint now?
