I’m a fan of the British TV program Dragons’ Den, a show which features budding entrepreneurs seeking investment from a panel of self-made millionnaires by pitching their ideas to them on camera. One of the things the show does is reveal gaping deficits in many of the entrepreneurs’ business skills, which the panel – or the dragons, as the show calls them – are quick to pick up on. A common error made by those hoping to secure investment is not knowing the difference between an order for their product and something which falls short, e.g. an expression of interest, a non-binding agreement, a letter referring to a potential future order, and sometimes even simply a meeting that went well. Often the dragons will ask to see evidence of a claimed order only to be presented with a document that is nothing of the kind. Usually it is business incompetence that leads to this situation rather than an intention to deceive, but it is sometimes hard to tell.
It appears Vladimir Putin has the same problem. Remember the Russians celebrating the historic gas deal with China last may, which was hailed uncritically by the western and Russian media alike? Well, as Streetwise Professor has spotted, and consistent with his skepticism at the time, the deal has not yet been signed:
Russia has prepared intergovernmental agreements to sign during Chinese Premier Li Keqiang’s visit to Moscow next week including one on a $400 billion natural gas deal agreed in May, Russia’s deputy foreign minister said.
Russian gas exporter Gazprom and China National Petroleum Corp (CNPC) have agreed that Russia will supply China with 38 billion cubic metres of gas starting from 2019.
Yet on Friday Gazprom said an intergovernmental agreement between Russia and China required for the plan to come into force had not yet been signed.
Not yet been signed after all that thumb-nosing and toasting? This is the kind of thing that gets an investee booted out of the Dragons’ Den with rolling eyes and shaking of heads on the part of the dragons. If Russia had a free press it would have been asking these questions back in May, instead of churning out anti-western propaganda. And the western press have hardly covered themselves in glory either, taking Putin’s claims at face value despite the likelihood of a deal being reached low, the timing incredibly convenient, and Russia’s long history of loudly-announced energy supply deals which come to nothing.
But there is one thing we don’t need the press to tell us: Russia is being taken to the cleaners on this deal.