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Vladimir Putin's visit to Saudi Arabia on February 11 was the first ever for any Russian or Soviet leader. Putin also visited U.S. allies Jordan and Qatar. Coming from Munich, where Putin delivered his most bellicose anti-American speech, he further delineated a Russian Middle Eastern policy at odds with Washington's in an interview with Al-Jazeera. Putin reiterated Russia's opposition to the Iraq war and disputed the justice of Saddam's execution. He was also critical of U.S. democracy promotion in the Middle East, attributing the empowerment of Hamas and Hezbollah to January 2006 parliamentary elections promoted by Washington. At the same time, he justified Russia's refusal to recognize Hamas and Hezbollah as terrorist organizations due to their electoral victories.

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Uniqueness

Oil prices already fell

Non-unique oil prices just had the sharpest fall in 17 years
The Economic Times 16 Jul, 2008 “Oil prices rise slightly after sharpest fall in 17 years” Bennett Coleman & Co. Ltd.

http://economictimes.indiatimes.com/Economy/Oil_prices_rise_after_sharpest_fall/articleshow/3239172.cms
SINGAPORE: Oil prices rose slightly in Asia on Wednesday after fears for economic growth sent prices into their steepest fall in 17 years during New York trading, analysts said. New York's main oil contract, light sweet crude for August delivery, was 15 cents higher at 138.89 dollars a barrel. The contract sank 6.44 dollars to close at 138.74 dollars a barrel on Tuesday at the New York Mercantile Exchange. It was the sharpest single-session decline since January 1991. "I was stunned," said Dave Ernsberger, Asia director of global energy information provider Platts. "At one point crude futures fell by 10 dollars in one hour." Brent North Sea crude for August delivery was a penny higher at 138.76 dollars a barrel following a plunge of 5.17 dollars to settle at 138.75 dollars Tuesday in London. Analysts said the falls coincided with US Federal Reserve chairman Ben Bernanke's semiannual forecast to Congress. He said there was a "high degree of uncertainty" about the US economic outlook. Traders fear that a slowing economy in the United States, the world's biggest oil consumer, will hurt demand for crude. The market was looking ahead to a weekly report on US energy stockpiles which was to be released later Wednesday. Oil prices had soared after breaking through 100 dollars at the start of 2008, and hit peaks above 147 dollars last Friday. The record prices sparked protests around the world amid fears for economic growth.
Non-unique and no link recent decline in oil prices did not affect Russia’s economy
Russia Today July 17, 2008 “Oil price falls wont affect Russian economy” http://www.russiatoday.ru/business/news/27632
Oil prices have fallen sharply for the second straight session, in a sign that markets are becoming more volatile. Experts point to fears of an economic slowdown, especially in the U.S. But while the world’s biggest economy is reeling - Ratings Agency, Moody`s, has lifted its rating for Russia, reflecting the country's strong fiscal position and economic growth. Fears of an economic slowdown in the US keep kept oil markets volatile on wednesday - with a sharp downward movement of 6 dollars a barrel for the second day running. At around 135 dollars, it’s a sign the markets are not sure strong levels of demand can persist. However, Ron Smith of Alfa Bank says long-term, fundamental demand for oil remains strong. If this trend continues in the next ten days or two weeks we should see another run at higher prices. At the same time there is reason to believe this might be a bubble, and if this trade ever turns, if the hedge funds and everyone else who’s piled into suddenly start to think that prices are going to go down then that will become a self fulfilling prophecy and they will go down. Russia, the world’s second-biggest oil exporter, remains little affected for now. With petro-dollars flowing into the country, any hope that lower prices will slow inflation are also vague. Inflation has topped 9 per cent so far this year. But the falls in the oil price of this week wont have an immediate impact on inflationary pressure according to Roland Nash of Renaissance Capital. Its to small a move to have a big impact on the inflation rate in the short term. You need to see the oil price fall for a considerable period of time. While the clouds continue to gather for the leading developed economies, investors are increasingly looking to Russia as a safe haven. So the decision by ratings agency Moody’s to lift its investment rating of Russian government debt is a timely signal to investors.

Russian econ sucks now

Russian economic crisis now
Pavel Bykov, Alexander Ivanter , Alexander Koksharov, Maxim Rubchenko writers for Expert Group, a reputable Russian magazine7 July 2008 “More Right Money” “The current global economic crisis is a good chance for Russia to improve its economic structure” http://eng.expert.ru/printissues/expert/2008/27/bolshe_pravilnuh_deneg/
Let us first say the following: the world economic crisis has also affected Russia. The Russian economy is already in crisis. Economic growth has not stopped, but more pressures are arising every day. Starting from March, consumer prices have been rising by more than 15% per month (in annual terms). In May, the increase was 20.9% — isn’t that a crisis? The situation on the stock market hardly differs from that in the West. Since mid-May, the RTS Index has dropped more than 12%. Investors are very much concerned over whether Gazprom can control its expenses in the context of growing inflation. Even the leading raw materials companies are starting to feel the pinch of rising costs (salaries, electricity, equipment, and transportation services) as a problem. An overall drop in companies’ profitability accompanied by price hikes is a whirlpool into which the Russian economy can be drawn. Our businesses are well aware of this trend. The key question is whether the domestic players will have enough liquidity to stay afloat. In such a crisis, business objectively needs wider access to credit resources. According to our estimates, up to 20% of Russian companies may go bankrupt if they do not secure this access. Therefore, Russia needs an expansionist financial policy, even if such a policy runs counter to the recommendations of the Bank for International Settlements.

Russian econ sucks now

Russian econ down now – seasonal factors and capital growth
Reuters 6/24 08, “Russian economic growth slows in May-EconMin,” http://in.reuters.com/article/asiaCompanyAndMarkets/idINL2423701220080624
Russian economic growth slowed to 7.7 percent in May from 8.4 percent in April and stood at 8.4 percent in January-May, Russian news agencies quoted Deputy Economy Minister Andrei Klepach as saying on Tuesday. "There was some gross domestic product (GDP) growth slowdown due to seasonal factors," Klepach was quoted as saying. The month had fewer working days than May 2007 due to public holidays. Klepach said it was too early to judge whether the slowdown was a trend, adding that this would be clear after half-year figures. The Economy Ministry expects the GDP to expand by 7.6 percent in 2008 compared with 8.1 percent growth in 2007. Klepach oversees long-term economic forecasting in the ministry, which will publish the official estimate in the state of economy report later this week. Russia's statistics office releases GDP data on a quarterly basis. Russian officials are locked in a debate whether the $1.7 trillion economy is overheated and is heading for a hard landing -- an abrupt slowdown -- which typically follows a period of rapid growth. The outcome of the debate will shape the economic policy under President Dmitry Medvedev's four years in the Kremlin. The pro-growth camp argues Russia should cut taxes and invest, but opponents say curbing inflation is a top priority. The country's economic statistics, which go back only to the early 1990s, do not supply reliable data for the output gap -- a difference between potential GDP and actual GDP -- which normally serves as a measure of the economy's temperature. Statistical data earlier this week on capital investment growth, one of the major factors behind overall economic growth in Russia, also slowed to 15.3 percent from over 20 percent in the previous month.
Russian decrease is inev – decreased output and pension system
Pravada in 6/25/08 “Russian economy to experience ten most difficult years,”, http://newsfromrussia.com/russia/economics/25-06-2008/105590-russian_economy-0
Russia’s Finance Minister Aleksei Kudrin stated at a recent press conference in Moscow that the upcoming ten years would be quite a difficult period for the national economy. The reduction of crude output and the unstable pension system will create serious problems in the Russian economy, the minister said. Aleksei Kudrin stated that the extraction of black gold increases by two percent in the country during the economic growth of eight percent. The share of the oil and gas sector in the nation’s GDP, which currently makes up 21 percent, will drop to 14.5 percent. “The share of the oil and gas sector in the GDP and the maintenance of oil and gas revenues, which contribute greatly to our current living, decreases every year,” the minister said.

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