Ruling with one iron fist, banking the West with the other

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Brad Setser at the Council on Foreign Relations has an interesting blog post on just how financially powerful the world’s autocratic regimes have become -- and how much the major democratic states rely on them for financing.

We all know that Russia, Venezuela, Saudi Arabia and the like have reaped huge sums from booming commodity prices, and that many autocratic regimes are snapping up assets in the rest of the world.

Still, it’s a bit of a shock to see the first chart in Setser’s post, which shows the surge in foreign assets held by authoritarian governments compared with the increase in foreign assets held by the major democratic states.

‘Not only do we live in a new ‘age of authoritarianism,’ but we live in a world where autocratic governments increasingly finance democratic governments,’ Setser writes.

‘To me, one of the world’s greatest ironies is that U.S. dependence on authoritarian governments for financing has soared over the last four years,’ he writes. U.S. rhetoric about democracy, Setser says, ‘hasn’t matched financial reality.’