[lbo-talk] Russia's economy

Marvin Gandall marvgandall at videotron.ca
Fri May 11 09:43:24 PDT 2007


Andie writes:


> China has built an economic manufacturing
> infrastructure Russia hasn't. That's the bid
> difference. Why couldn't the Russians have done that?

The Putin government earlier this year emphasized the need to develop the manufacturing sector, with FDI being strongly encouraged, as in China. I'm not very knowledgeable about the relative state of Chinese and Russian manufacturing - perhaps those are who are can comment further - but I think you are very likely exaggerating the latter's backwardness; investment in Russian industry seems to have been steadily growing and its steel, aviation, nuclear, engineering, and arms production industries seem quite robust. It's true, however, that like many other countries the Russians are at a competitive disadvantage to China in that the latter's labour costs are about a third lower, and the Chinese maintain a dollar peg while Russia's strengthening oil-backed ruble drives up the cost of its manufactured goods.

Today's Wall Street Journal reports on "the country's booming banking sector", driven by "consumer lending...as economic prosperity makes more and more Russians eligible for car loans, credit cards and mortgages." ("Russia's VTB Bank Prices IPO Toward Top of Range") - further evidence that the Russian economy is more broad-based and vibrant than its leading oil and gas export industry, and perhaps not as vulnerable to a downturn in commodity prices as is widely supposed.


> And by, Why would it have destroyed Russia ti have a
> free press, opposition parties free from harassment
> and persecution, and a prosecutor's police that was
> not a political tool, a start on a stable system of
> property rights?

It wouldn't destroy Russia to have these things, and I think it is moving in that direction under the pressure of its own internal development and integration into the world economy. The same thing can be said of China, which is subject to the same criticism. Except, it would appear, by yourself...


> The Chinese squelched these tinge
> because at their level of exploitation they face
> dangerous labor unrest.

This sounds like a justification for the suppression of democratic rights in China on grounds these would encourage "dangerous" labour unrest.



More information about the lbo-talk mailing list