The West, meanwhile, has done relatively little to help Russia achieve a smooth transition to a market economy, and may have secretly welcomed the descent into chaos on the grounds that it will complete the disabling of Russia as a world power.
But now the possibility of contagion to the West cannot be entirely ignored - which explains the mood of near panic which has affected all the main stock and bond markets in the last week.
By itself the Russian crisis should not have a directly damaging effect on the economies of Europe, North America or even Japan. The rouble has been devalued by around 50 per cent but, unlike Japan, Korea and Taiwan, Russia simply does not have the economic resources to capitalise on a devaluation by exporting a tidal wave of cheap goods to the Western world.
From that point of view, the crisis in Russia is very different from the crisis that gripped eastern Asia last year which has both increased the competitiveness of Asian exports and reduced their capacity to import from the West.
The main risk from the Russian crisis is that Russia defaults on all loans, and Western banks, which have lent heavily in Russia, have to write off substantial assets, forcing them to cut back lending in the West.
There is a secondary risk that the contagion will spread to other emerging markets, especially in Latin America and South Africa, which have avoided the worst impact of the Asian crisis. If the whole of the emerging world gets into difficulties, world trade could suffer.
For half a century now the West has been able to grow and prosper independently of the poorer countries, but that is changing as Asia and Latin America have begun to catch up with the West.
The emerging world as a whole is more important economically now than at any time since the Twenties, when a slump in the purchasing power of primary producers spread to the developed economies and led to a worldwide recession. At the same time the international co-operation which grew out of the Second World War has been allowed to atrophy to the point where international summit meetings are now little more than talking shops, and there is no sign that the leading economic powers are in the mood to mount a Marshall Plan for Russia.
Closer to home, the good news is that markets increasingly believe interest rates will be lower in 12 months. Last week, Northern Rock gave notice that they plan to cut the interest rates they are offering on some accounts by up to 0.35 per cent, and other banks and building societies are likely to follow suit. Meanwhile, long-term money market rates for five to 10 years are starting to edge up.
Short-term interest rates have been higher than long-term rates for some time now, and that is not really a healthy state of affairs because it distorts investment decisions.
If the trend starts to right itself, those five-year fixed-rate mortgages will be worth grabbing. One-year fixed savings rates, which currently go up to 8.05 per cent, will also be worth taking up before they disappear.
Isabel Berwick is on holiday.Reuse content