Russia and Iraq

[ChrisD(RJ)]

- -But, if oil prices collapse, there will be a dramatic worsening in
- -macroenomic variables, the trade balance will worsen analso tax
- -revenues, so this will threaten stability and decrease the amount
- -of money disposable for comsumption. And from what I remember, the
- -years of Russian recovery (1999) was also the year inwhen oil prices
- -started to recover (of course, devaluation of ruble itself improved
- -trade balance and reactivated local industry, since Russian consumer
- -couldn¥t afford imported goods). My point is that Russian is really
- -threatened by a decrease in oil prices, so her current strategy could
- -be somewhat suicidal, on the other hand, Russian doesn¥t have a way
- -to avoid a war, unless he provides Iraq with nuclear weapons, which
- -could be even more suicidal. Really a dangerous situation. 

                                       Alexandre Fenelon
----
What is really threatened is the money of the state. Russia is not a poor
country in a precarious economic situation (for the most part). Russia is
loaded. Moscow is super-loaded. Moscow is obscenely rich. On the other hand,
the condition of infrastructure is wretched and state employees and
pensioners get only a pittance (officially, anyway. Putin officially earns
$800 a month.). This is because few organizations pay full taxes except the
big natural-resource extractors/processors and some big manifacturing
holdings, making the state budget dependent on them.

A full professor at a state institution in  Moscow makes about $150 a month.
A teacher or doctor make make $100 a month. On the other hand, you can make
$700 a month selling shoe polish at the train station (I know a guy that
does this) or $1000 a month driving a cab. Both the latter activities will
put you in the "middle class," whereas the doctor, professor or teacher is
poor (though they may supplement their incomes by taking tips, bribes,
moonlighting and so forth).

The pisser about making judgments about the Russian economy is that NOBODY
REALLY KNOWS HOW BIG IT IS AND HOW IT IS STRUCTURED.