- 20 Apr 2003 02:42
#8133
"any opinions of the future of russia?
let me guess...SHIT"
Russkie, I don't think so, though my knowledge of Russia is limited, it seems to me to have reached the end of its decline. Firstly, the Russian political situation has dramatically improved. Despite continuing problems with politicians being assasinated and government control of the press, the basis of the 1991 revolution has generally held intact. And unlike in the 1990's, that system now has a strong leader. Score one for a break from the past. Secondly, Russia has decisively stopped the momentum towards breakup and defeatism that existed from 1989 through the mid 1990's, mainly due to Putin's success in Chechnya. Despite the continuing moral and political problems posed by the Chechen issue, Putin has won for Russia the decisive victory by proving to other potential independence regions that the fight for independence will have massive costs and most of these regions probably realize now it is not going to be as easy as it was in the early 1990's and its not worth it. Score two for a break with the past. Thirdly, Russia no longer poses an immediate threat to anyone. That means Europeans, Asians and Americans have no incentive to keep cold relations with Russia and every incentive to cultivate relations with Russia, especially Europe and Asia if they want to limit American hegemony. Russia is a necessary piece in any counterweight to the United States that might arise. But at the same time, George Bush and the neoconservatives are willing to have good relations with Russia as a counterweight to China. Score three for a break from the past.
The other game is played on the economic front. Oil prices remain high and will remain high as long as the Middle East is unstable, which could be a long, long time. By 'high' I mean at least $20 a barrel. This is about the optimal price for oil producers, because too high a price hurts demand. What they want is the market equilibrium price. Russia's financial crisis of 1998 was caused by oil prices dropping to $8 a barrel in the wake of the Asian Financial crisis. That was the exception, not the rule. Russia stands to gain a great deal from oil revenues that other middle-developed countries cannot expect. And unlike Saudi Arabia, it will use these revenues not on welfare and religious fanaticism, but on real development. Score four for a break from the past. Russia also has a large consumer market of about 145 million people, much larger than any European country and about half the size of the United States, so companies could potentially make a lot of money. Russia is democratic and relatively stable, and anti-Americanism is under control. Russia also has lowered its tax rates, and still has massive amounts of natural resources. Russia serves as the bridge between developed Europe and developing Asia. Russians have purchasing power but also room for growth. For all these reasons, the pieces are in place for Russia to benefit from substantial foreign investment and capital inflow once the global economy gets back on its feet. Score five for a break from the past.
Some of these things are already happening. The Moscow Times Index has risen from the hundreds at the start of 1999 to over 5000 last spring, and it recently stood at around 4700. Throughout this time financial markets in North America, Europe and Asia generally declined or stagnated. In 2001, when many advanced and middle-developed economies were in recession, Russia racked up respectable growth. It is one of three large countries dominating Asia that have strong, stable growth, the other two being China and India. And compared to the other two, its per capita income is still substantially higher.
- By ingliz
- By Rich
- By Potemkin