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Russian econ high general
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Russian econ high generalRussian economy high now – western evidence is biased By Peter Cooper is Deputy Online Editor at Emirates Business 24/7 on Friday, July 11, 2008 “Russian economy flourishes like UAE’s” http://www.business24-7.ae/Articles/2008/7/Pages/RussianeconomyflourisheslikeUAE%E2%80%99s.aspx OGK-1 has four plants in European Russia and two in Siberia, and supplies electricity to Moscow and the oil-rich Tyumen region. Only time will tell if this is the right time to buy. It is only too easy for foreign investors to become the latecomers to any investment party. But the omens are very fortuitous in post-Putin Russia. The economic transformation runs deep and is being overlooked by the Cold War mentality of some observers in the West. Arriving back in Russia after a year's absence last week there is an immediate sense of economic prosperity in the air, and none of the near panic seen in the UK, US and parts of Europe. Indeed, the most apparent change is that inflation has surged in Russia, usually a sign of economic strength or possibly overheating. The cost of the train ticket from Moscow to St Petersburg has doubled in a year, similarly ballet prices have shot up and even the price of art on the streets is double what it was two years ago. Even gas at the pumps sells for US prices these days. However, average salaries in St Petersburg are now around $20,000 a month, an amazing transformation from my visit in 2001 when take home pay was around a quarter of that level. House prices are up 10-fold in that time. Russian housing was privatised back in 1990. This combination of rising salaries and house prices has created a large and prosperous middle class of consumers that just did not exist in the chaotic Yeltsin years of the 1990s. They all seem to be buying new cars. Total Russian new car sales this year are estimated to exceed 3.3 million, and for the first time Russia will overtake Germany as the largest car market in Europe. This is a middle class on the move, quite literally, and this increase in gas consumption does not bode well for future demand pressure on oil prices either. By contrast Russian oil output is expected to fall for the first time in a decade this year, by one per cent. The Russian consumer, therefore, looks well capitalised and prepared to spend. Moreover, Russian consumers do not carry heavy personal debts like their counterparts in the UK, US and even the UAE. Consumer credit is growing but still in its infancy. It is only very recently that mortgage interest rates have fallen to reasonable levels, so the consumer-led economic expansion seems to have much further to go. The economic gap between Russia and the European Union is closing but far from closed. Russian econ high generalRussian economy high now Dr. Vladimir Kvint is president of the International Academy of Emerging Markets 01.08.08, “Russia's Surging Economy” Forbes.com Dr. Vladimir Kvint is a U.S. Fulbright Scholar and the chair of the Department of Financial Strategy at the Moscow School of Economics. http://www.forbes.com/2008/01/08/russia-economy-projections-oped-cx_vkv_0108russia_print.html With the firm belief that, especially in Russia, past is prologue, the first and most important economic trend of 2007 was that nation's continued political and economic stability. This has made possible, and will continue to enable, reliable forecasts of economic trends, and has attracted a great deal of foreign investment in Russia. Such an ongoing process has also caused Russian entrepreneurs to maintain and increase their domestic investments, rather than invest abroad, as they did before. Moreover, it has resulted in job creation and stimulated economic growth, which is now approaching 8%. Which indicators are proving the increasing stability and predictability of the Russian economy? First, there's the unprecedented rate of growth of foreign investment, which surged by a factor of 2.5 in 2007. None of the world's 15 leading national economies can compete with this achievement. Some $100 billion was invested in Russia from abroad over the last 12 months, an all-time record for any emerging market country and a milestone of great historical and psychological significance for Russian business. Although, in general, the outflow of foreign direct investment has decreased, this trend began to reverse over the last six months. LinksAlt en bad for Russian econRussia is dependent on oil. Alternative energy sources take away their main source of income destroying the foundation of their economy Knowledge at W.P. Carey July 16, 2008 Knowledge at W. P. Carey is a think tank involving the Arizona Board of Regents at the W. P. Carey School, Arizona State University and the Wharton School of the University of Pennsylvania “The Bear Is Back: Rising Oil Prices Raise Russia's Global Influence” http://knowledge.wpcarey.asu.edu/article.cfm?articleid=1642 Secondly, being commodity-rich tends to make any nation less likely to develop manufacturing technology in general. Citing "Dutch Disease," Goldman notes that such nations as Russia and Saudi Arabia tend to accumulate commodity-fueled wealth and to use it to buy manufactured goods from other nations such as Japan and Switzerland that, lacking commodity wealth, have great motivation to develop manufacturing technology. "Once the Dutch found natural gas off their North Sea Coast, the relative prosperity it brought came at the expense of the country's manufacturing section." Gas exports boosted Dutch currency and undercut prices of foreign imports, so Dutch manufacturing declined along with domestic employment, Goldman reports. Norway also has natural gas but understood the negative impact energy export revenue can have, Goldman writes. "Norwegians have made a determined effort to shelter the rest of the economy from this energy windfall. They have set aside export revenues in a special fund to hold down inflation and prevent their currency from gaining too much value." American readers cannot help but wish the United States had such a problem -- not to mention the wisdom to handle it. So far, Goldman writes, Russia has not inoculated itself from Dutch disease, because of the lack of what Wellesley economist Karl Case terms "a moral infrastructure" of commercial laws and moral codes that are taken for granted in longstanding market economies. Thirdly, Russians, the Saudis and other nations rich in fossil fuels would stand to lose market share if the rest of the word aggressively developed renewable wind and solar power, alternative fuels and conservation. For the foreseeable future, their revenues will flow freely as energy-voracious China and India base their economies on fossil fuels despite their short-term environmental shortcomings and their long-term economic and political pitfalls. Goldman says the Russians inevitably will "pile up more and more dollars and euros" and use their cash advantage to acquire and expand overseas assets. For example, in 2000, Russia's large privately owned LUKoil corporation bought almost 3,000 gas stations in the United States from Getty Oil and Mobil. Although these acquisitions did not include Getty and Mobil oil wells, Goldman writes that such a purchase might not all bad, despite the likely protectionist reaction: "Russian investment in the U.S. energy sector -- at least in petroleum production, refining and servicing -- is a good idea. The Russians are more likely to export petroleum to use and avoid any halt in deliveries if they have operations in the United States ... At the same time, of course, the properties Russians buy in the United States can serve as hostages if that should ever be necessary to offset similar pressures on U.S. companies in Russia." Alt en bad for Russian econReduced dependence on foreign oil via alternative energies leads to political instability By Gavin Longmuir consulting petroleum engineer and AF Alhajji Energy Economist and Associate Professor at Ohio Northern University 26-Feb-2007 "Middle East Economic Survey" VOL. XLIX No 9 "SUPPLY/DEMAND/OPEC" "Need For A Balancing Act: Reducing Oil Dependence Without Triggering A Global Crisis" Dr Longmuir is a Stanley, NM-based consulting petroleum engineer, affiliated with International Petroleum Consultants Association. Dr Alhajji is an Energy Economist and Associate Professor at Ohio Northern University Thus, Western posturing over reducing the demand for oil could cause major oil exporters to react in a variety of ways, most of which would exacerbate rather than help the global energy situation. Even in a scenario where Western countries successfully replaced their demand for oil from alternative indigenous energy sources, they would still have to live on the same planet as former major oil-exporting countries whose fragile societies would then be faced with the additional economic strain of the loss of their main current source of revenue. Energy independence for current oil-importers may carry a high moral price. If a sharp decline in oil revenues leads to instability in the oil producing areas, the West will not be able to turn a blind eye to such conflicts. In the age of globalization, these countries are economic and political partners of the West. Political instability that results from declining oil revenues must be added as a potential cost of oil independence. In addition, it is unclear what will happen to the world monetary system without the trade in oil and the associated recycling of petrodollars. A change to a world where most industrial countries depend on their own domestic energy resources would require a major change in the world’s financial and monetary system. Such a change will bring its own challenges and difficulties to all, including the industrial countries. Alternate Energies will cause oil prices to plummet Devin DeCiantis Masters candidate in Public Policy at Harvard’s JFK School of Government, specializing in development economics and international trade 08, March 25, , http://www.freedom24.org/rationalpost/2008/03/25/speculations-on-a-25-oil-tariff/) In the mid-term, as industries and generators begin to shift away from higher-cost imported oil, domestic oil producers might begin building out untapped Arctic capacity and utilities might begin diversifying their energy portfolios into lower-cost fossil fuels and alternative energy technologies. Together, these processes should cause a more substantial decline in import volumes. In the long-run, a more fundamental shift away from a high-carbon, high-cost, oil-dependent economy is likely to unfold, at which point oil imports would begin to decline more precipitously as demand for energy is almost completely replaced with lower-cost substitutes. This progression is an example of a typical “adjustment lag”. b. The world price of oil? Again, in the very short-term we might expect a modest decline, partially offsetting the cost of the tariff. Given that America is one of the world’s largest energy importers (importing roughly 2/3rds of its annual consumption), it would still need to source oil externally or risk seizing up its industrial capacity. Thus, aggregate import demand would remain relatively stable and prices would likely settle somewhere between $75 and $100. Over the mid-to-long-term, major OPEC suppliers would have room to lower prices given their lower relative cost of production, while growing demand from China and India would partially offset declining American demand. Finally, as the U.S. begins to substitute away from oil as a key energy input in the long-run, global aggregate demand for oil will inevitably decrease, assuming that emerging market demand doesn’t continue to grow at its current pace in perpetuity. This will put considerable downward pressure on prices over time as oil exporters adjust to a situation of extended excess supply-at least while total global oil reserves remain relatively plentiful. Directory: file -> view view -> Western Europe after wwii view -> Author study: paul fleischman view -> Qpa1 7ela study Guide view -> Arctic Oil/Gas Neg view -> November 1970 Approximately 150,000-500,000 deaths Bhola Cyclone Bangladesh view -> Grade Level: 6 Unit of Study: Caribbean glce view -> Citation: Duffield, Katy view -> Table of Contents Lesson # view -> Chinese Wind Energy Disad Download 9.54 Mb. Share with your friends:
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