--- Jim Devine <jdevine03 at gmail.com> wrote:
> > Is Russia Really Hooked on Oil?
> > By Kirill Pankratov
> > Published on April 16, 2004
> >>
> if not, what are the _other_ sources of Russia's
> success?
The general consensus, which I happen to believe in this case, is that the first leg of the boom in 1999 was due to the devaluation of the ruble during the 1998 financial crisis, which priced imports out of they country and revived domestic industry. In retrospect the crisis seems to have been a blessing in disguise.
I think that political stability is a main factor, and the reason why capital is flowing into Russia and not out of it, as it was in the 1990s. Back in Yeltsin days, when the country was moving from shock to shock and Yeltsin was sacking the government every other day and handing the heights of the economy over to his cronies, businesses in Russia would make plans not for years or decades ahead, but for months. The goal was to get in, get as much money as possible as quickly as possible, and then get the money out of the country. That has changed. In addition, the oligarchs are not running the show any more and are not funnelling money out of the country, but rather are doing the Kremlin's bidding. The best example of this is Abramovich -- before he became governor of Chukotka, why out there in BF nowhere, the level of poverty there was incredible. Now Abramovich treats it like a giant day care center, and Chukotka leads the Russian Federation in number of doctors per thousand people.
People with greater theoretical background than I can debate the plusses or minuses of the government's financial policies.
>
> why does he choose 1999-2003 as his baseline for
> comparison?
I would imagine because Pankratov was writing at the beginning of 2003, and 1999 was the first year of the boom.
> but the USSR economy had a lot of other things going
> on (like
> manufacturing) that Russia doesn't seem to have now,
> didn't it?
Russia does have manufacturing -- you don't see it because they don't export to the West, but sell to the domestic market and to other CIS countries. (Does Russia still export cars to Latin America?)
>
> so what is happening to the Russian economy outside
> of oil? what do
> they export?
Weapons systems. Airplanes. Aviation and space
technology. Manufactured goods to the CIS countries.
Any of the natural resources that nature has been so
kind as to place on Russia's immense land mass. Europe
is largely dependent on natural gas from Gazprom,
which is why the EU was so skittish during the Ukraine
gas war. Russia has the world's second-largest diamond
company, Alrosa. Steel, nickel, lumber.
>
> it's good that Russia has used oil funds to pay off
> its external debt.
> But to what extent have revenues gone to diversify
> the economy and to
> promote long-term, non-oil-related, growth?
This is what Putin wrote his dissertation on. ;) I suspect the desire to do this on a major scale is there, but efforts are currently focussed on developing the hydrocarbon sector because of its importance for Russian foreign policy and cementing Russia's position as a remerging Great Power.
Nu, zayats, pogodi!
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