Resourceful Plan to Prevent Russia’s Economic Downfall

In a clever one-two punch, Kremlin leadership plans to knock out the dangerous threats to Russia’s economy. First will be a 5 year plan to phase out all exports of oil to foreign nations. Then, while exports are being phased out, Russia will totally alter the structure of its economy to make it less dependent upon the sale of energy resources. Russia will finally reform its lopsided economic structure:

GORKI, February 5 /TASS/. Russia should take advantage of low oil prices to change the structure of its economy, Prime Minister Dmitry Medvedev said at a meeting with the candidates to the Supreme and the General Councils of the United Russia party. __ Medvedev Explains the Kremlin Economic 5 Year Plan

Kremlin economic planners have concocted a particularly clever and counter-intuitive plan. Most people would have thought it easier to reform an economy during the good times, while oil prices were high. But one may also look at the problem a certain way, so that it makes sense to wait until the economy is struggling badly before taking needed steps of reform.

Foreign investment does not flow into Russia like it once did, before Putin put the nation on a permanent war footing. This is true across almost all economic sectors, including the high-tech research sector:

In recent years, the Russian government has worked hard to attract foreign researchers to the country…. At one point, foreigners came in great numbers, attracted by high salaries and excellent career prospects. But then came Ukraine, Crimea, sanctions, a low oil price and worrying economic malaise, and a great many left. Skolkovo was not immune from the process. In 2014, Dutch geneticist Anton Berns left the institute following the downing of Flight MH17 over eastern Ukraine. Last year, he was followed by two other professors, material scientist Zafer G?rdal and computer engineer Raj Rajagopalan, both American. In September, Skolkovo president Edward Crawley announced he too would be leaving. The official reason was that his five-year contract was up for renewal. Unofficially, as much of the local media reported at the time, the impact of sanctions on Skolkovo’s long-term future was to blame. __ Research Talent and Investment Hard to Find

Russia has seen some difficult times in the two years since Russia seized Crimea and facilitated (and participated in) a civil war in Ukraine. But if Russia can so quickly and easily break its harmful addiction to the sale of oil & gas to foreigners, it will be very glad to have done so.

More on Russia’s struggles to normalise its economy, vitality, and sense of optimism.

Despite an ongoing massive media blitz of triumphalism and Putin boosterism, well over half of Russians expect things to grow worse, rather than better. On the surface, they accept these sacrifices for the sake of mother Russia, and a patriotic desire to see Russia survive as a great world power.

More rarely heard Russian news. A tiny preview:

In Moscow itself, there is now only one urologist on duty for emergencies in the entire city (apn.ru/publications/article34624.htm). And basic medicines are disappearing across the country because of the Kremlin’s counter-sanctions (novayagazeta.ru/society/71682.html).

All of these things will be moot, of course, once Russia successfully stops exporting its precious oil to unsavoury foreigners. It was an obvious move, and one wonders why it was not done long ago.

What Will Russia Do About China?

http://www.rferl.org/flashembed.aspx?t=vid&id=27226608&w=100%&h=600&skin=embededfullscreen

China … has one of the world’s longest borders and a long history of conflict with its northern neighbor. In this respect, Putin suits China well, because he antagonizes the West and weakens Russia economically. With sanctions cutting Russia’s access to modern technology, its military will not be able to modernize. Meanwhile, China is spending massive amounts (no one is sure exactly how much) on bringing its military into the 21st century. __ China Benefits from an Isolated and Weaker Russia

China’s air, water, and soil are poisoned — as is its food chain. China must look outward for new resources:

China is home to 20 percent of the world’s population but only 7 percent (PDF) of its fresh water sources. Overuse and contamination have produced severe shortages, with nearly 70 percent of the country’s water supplies dedicated to agriculture and and 20 percent of supplies used in the coal industry, according to Choke Point: China, an environmental NGO initiative. Approximately two-thirds of China’s roughly 660 cities suffer from water shortages. Former Chinese premier Wen Jiabao has said that water shortages challenge “the very survival of the Chinese nation.” … Data on the toll of China’s pollution on public health paint a devastating picture. Air pollution contributes to an estimated 1.2 million premature deaths in China annually. Epidemiological studies conducted since the 1980s in northern China suggest that poor air quality in Chinese cities causes significant health complications , including respiratory, cardiovascular, and cerebrovascular diseases. Pollution has also been linked to the proliferation of acute and chronic diseases; estimates suggest that around 11 percent of digestive-system cancers in China may stem from unsafe drinking water. __ China Badly Needs Russia’s Resources

Russia, of course, has similar problems with polluted soils, water, and air — but that is mostly West of the Urals, and in the circum-Ural industrial zone. The public health effects of Russia’s toxic landscape are similarly severe. But Siberia is vast, largely unpopulated, and largely pristine. China’s teeming masses can use that water, that land, that lebensraum . . .

China’s own economic problems — severe as they may be — are but a flea bite compared with the problems that Russia is facing. And China is taking every opportunity to press its advantage vis a vis Russia. In the end, there will be no need to invade Russia to take its pristine resources.

China has achieved virtual encirclement of Russia via growing liasons and investments in Ukraine, Finland, Central Asia, Iran, the Caucasus, and as noted above, the Far East.

Certainly if things are this bad in China, Russia will soon be feeling China’s pain. The dragon has worked hard to place itself in a position of strength vis a vis the bear. Troubles in Beijing will motivate the Middle Kingdom to apply pressure to its vassal state to the north.

Rising oil prices would help prevent disaster for the ruling Kremlin junta. Russia would like to see global oil prices rising to above $130 bbl. That way, everyone in the Kremlin, Moscow, and St. Petersburg would breathe more easily. In lieu of that, Medvedev’s Plan B will need all the help it can get.

Russia is Losing Its Emotional Cohesion

… the country is sliding gradually toward becoming un-anchored from the key driver for social cohesion: economic normalisation (compared to the 1990s) delivered during the so-called Putin Era. While the ongoing geopolitical revival still compensates for the negative economic momentum, that compensation is starting to fade. … Crimea was the high point of ‘return to roots’ in Russian psyche – a point of reversal of perceived historical injustice inherent from the Soviet times and a point of a payback for years (since 1991) of virulent anti-Russian rhetoric across the majority of the former USSR states, including Ukraine. These were perceptions of the average Russian (do not confuse them with my own views). The conflict spillover into Eastern Ukraine was already a step away from the Crimean narrative, but it was a proximate one. And hence it had weaker, but nonetheless significant, support on the ground in Russia. But Russian push into Syria has completely divorced the country geopolitical strategy from the hearts-and-minds of the Russians on the ground. Syria is a foreign land, with alien religious strife and probably more reminiscent of Chechnya to an average Russian, than of the traditional spheres of Russian interest. __ http://trueeconomics.blogspot.com/2016/02/6216-down-rabbit-hole-russian-opinions.html

More on the perils of polling in Russia

Russians are not the total fools that last year’s opinion polls painted them as being. The situation in Russia is far more complex than Kremlin propaganda and Kremlin stooges allow the international skankstream to clearly see. Mentally handicapped and corrupt western Russophiles in the media, European governments, and elsewhere do not clarify the situation either.