[lbo-talk] Russia's economy

James Heartfield Heartfield at blueyonder.co.uk
Wed May 9 09:17:55 PDT 2007


"a future in which Russia looks like lots of other underdeveloped countries the industrialized world exploits for their resources -- a thin glaze of expensive Western chains imported for the benefit of a compliant comrador class while the rest of country suffers. Say why it ain't so."

It ain't so because between 80 and 85 per cent of Russia's output is not oil or gas.

Yes it is true that Russia is fortuitously oil-rich (as indeed is the US). But that does not account for all the growth that has taken place.

In fact the Gross Fixed Capital Formation increased from a low point in 2000 of 1204 billion, by about two thirds to 2079 billion in 2005. (that is after a fall from 1760 billion Rubles in 1995 to 1204 in 2000)

Russia's investment in 2002 Rubles (billions)

Yr. GFCF% GDP GFCF

2000 14 8602 1204.28 2001 17 9040 1536.8 2002 19 9456 1796.64 2003 18 10256 1846.08 2004 18 10877 1957.86 2005 18 11552 2079.36

(As to whether oil prices are likely to collapse, that rather depends on why you think they are high. Myself, I do not believe that high oil prices will necessarily hold in the long term, because I believe that they are high because of high growth rates (in China, particularly) that create energy demand. But a lot of people think they are high because oil is running out. If they are right then Russia is well placed, not just because of its oil but also because of its relatively underdeveloped reserves of natural gas.)

Andy dismisses the comparison with China as if it was self-evident that China's economy was always going to take off. But it was not self-evident to a lot of people that China's economy was going to take off. I wrote an article for the Review of Radical Political Economics (China's Comprador Capitalism is Coming Home, ) to critique those who dismiss China's growth as illusory and off-shore.

When Andie says:

"As socialists we are not supposed to like a politically authoritarian, kleptocratic, wildly inegalitarian capitalist system that substitutes arbitrary force force for reliable rule of law and accords working people some goodies but no power."

Well, ok, but let's not the wish be father to the thought. If this dictatorial government is growing the economy it seems silly to criticise it for not doing so when what you actually want to do is criticise it for oppressing the people.



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