Oil 1 Peak Oil 21
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Russian econ sucks nowInflation from food prices will devastate the Russian economy 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 One negative trend of 2007 is the steady rise in prices of consumer goods and food, a very dangerous development. The consumer price index surged 12%, but the price of certain foods has risen at a much faster pace--vegetable oil increasing by 150%, butter by 40%, milk by 30%, and grains and bread by 25%. This is not the result of a worldwide increase in food prices--Russian food prices are growing faster than world prices, even faster than in neighboring emerging market economies like China and India. The rise in consumer prices is a result of increases in salaries, pensions, stipends and other social spending at a pace much higher than what economic growth allowed. This puts more rubles in the hands of Russians, but decreases the purchasing power of the currency. During the last 11 months of 2007, the ruble supply increased by 30%. As a result, taking into consideration the high speed with which money circulates in Russia, the purchasing power of the ruble fell by 20% to 25%, according to my calculations. LinkOffenseLow oil prices would prevent economic collapse – laundry list Owen Matthews, writer for the Newsweek May 7, 2008 "Economy of Clay" Newsweek, http://www.newsweek.com/id/135877] But in truth, the Russian economy as a whole is an edifice with feet of clay. The bling and glitter of the capital obscures a harsh reality: the architecture of Russia's economy is no more solid than that of an inflatable children's castle at fairground, with energy and commodity prices the wind that keeps it inflated. Yes, the Russian economy has been growing fast. But little of that growth has spilled over into the real Russian economy. Rather, the boom has, in many ways, held back Russia's non-commodities economy from growing: rampant inflation, spiraling real-estate prices and higher labor costs, bureaucratic corruption, expensive credit and bad governance have combined to stifle the competitiveness of many Russian businesses. "Russia's macroeconomic performance has been stellar," says economic analyst Anders Aslund. "But Russia's oil surplus is so huge that it hides flaws in economic policy; the longer oil prices remain high, the worse economic policy will become. Booms breed complacency and corruption." Decreasing oil consumption increases prices By Joe Barnes, Amy Jaffe & Edward L. Morse staff writers for Saudi-US relations information service January 6, 2004 “Special Energy Supplement: The New Geopolitics of Oil” http://www.saudi-us-relations.org/newsletter2004/saudi-relations-interest-01-06.html Rhetoric about "breaking OPEC" is more a wish list item than a practical aim. Indeed, much of the debate about U.S. energy policy, with its stress on achieving lessened dependence on foreign supplies through largely unilateral action in the foreign arena, flies directly in the face of harsh market realities. The foremost of those realities is the role of increasing consumption-especially by the United States-in driving petroleum markets. Accepting this reality is a vital first step in forging a practical medium- to long-term strategy that will minimize the risks of severe supply disruption and skyrocketing prices. DefenseDeveloping nations drive oil prices not the US By Ed Crooks of the financial times July 15 2008 “Emerging economies show international oil ambitions” I will reframe from putting a really bad crook pun here http://www.ft.com/cms/s/0/46a866ba-5205-11dd-a97c-000077b07658.html ONGC's approach to Imperial Energy is the latest example of the burgeoning international ambitions of oil companies from emerging economies, writes Ed Crooks. National oil companies have become a regular part of bidding rounds in energy deals, a trend unhampered by credit and equity market crises. Last week, two deals involved emerging country buyers. China Oilfield Services Limited, a unit of the China Offshore Oil Corporation, announced a $2.5bn (£1.25bn) bid for Awilco, a Norwegian drilling contractor, and Taqa, a fast-growing Abu Dhabi energy group, bought six oilfields in the North Sea from Royal Dutch Shell and ExxonMobil. Last year Middle East buyers, led by Taqa, dominated the list of emerging economy buyers in the oil and gas industry; Chinese companies, very active in 2006, were quiet. The COSL/Awilco deal, along with Sinochem's $465m purchase of assets in Yemen from Soco, another mid-sized London-listed oil company, suggests the Chinese are back. A recent report from Ernst & Young characterised internationally ambitious national oil companies as either "resource holders" seeking to exploit cash flow and expertise in new markets, or "resource seekers" - ONGC is one - companies from oil and gas importing countries that need access to production. The problem with doing deals with such companies is that their decision-making can be slow and cumbersome because of the involvement of the national government. But they can be prepared to pay more for assets they consider strategic. Petronas, the Malaysian oil company, is seen as a welI-resourced and effective bidder. DefenseRussia is diversifying its economy now Andrew Kuchins senior fellow and director of the CSIS Russia and Eurasia Program December 2007 “Alternative Futures for Russia to 2017” http://www.csis.org/media/csis/pubs/071214-russia_2017-web.pdf) Certainly the dramatic increase in oil prices since 2003 has diminished the initial momentum for the structural economic reforms of the first Putin administration. It would be wrong, however, simply to categorize Russia as a petro-state with a nondiversified economy. Microeconomic enterprise restructuring has also contributed to the Russian economic boom, and other sectors of the economy not related to natural commodities, including consumer goods, construction, and telecommunications, are experiencing tremendous growth. DefenseAlt causes to Russian economic decline 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 In addition to these trends, I would like to mention several other events which may impact the Russian economic situation in 2008: --The diversification of natural gas supplies to Europe, which is mostly a result of the new role of Turkmenistan. This will have a direct impact on Russian influence in certain European countries. --The failure of Russia to become a member of the World Trade Organization, despite expectations to the contrary --Strengthening economic ties between Russia and China --The failure of Russia's amnesty of capital program, which was not surprising--it was, in fact, practically inevitable. Russia was the only country in the world to make tax collections the focus of its amnesty of capital program. Most of these programs seek to repatriate capital to create new jobs. The tax rate on repatriated capital is typically between zero and 5%, but Russia's program taxed repatriated capital at 13%. In Italy, 61 billion euros worth of capital was repatriated in only six months of 2002. Russia's program was not economic amnesty, it was bookkeeping amnesty, and was a total failure. The Ministry of Finance is planning an amnesty for undeclared property. The focus of this amnesty is, again, on taxes. Instead, the Ministry of Finance should figure out how owners of these undeclared properties can bring their properties out of the gray areas and into the legitimate economy. This amnesty will most probably occur in 2008. Declining oil prices would not cause Russian recession Russian News and Information Agency 01/04/2008 "High oil prices bring Russia extra $475 bln in past 8 years" MOSCOW, (RIA Novosti) http://en.rian.ru/russia/20080401/102669349.html Russia received an additional $475 billion in revenue as a result of high global oil prices between 2000 and 2007, the finance minister said on Tuesday. Alexei Kudrin said that in 2000, the Russian government predicted average world oil prices at just $20 per barrel based on figures over the past decade. "Since then, oil price growth enabled Russia to receive an extra $475 billion in revenue from 2000 to 2007, of which $340 billion or 72% was paid to the budget," Kudrin said. Global oil prices are currently hovering at just over $100 per barrel. The Russian economy can withstand an oil price plunge to $50 per barrel, Vice-Premier Alexander Zhukov said. Naturally, a sharp decline in world oil prices would negatively affect the Russian economy and the country's economic growth but nothing disastrous would happen, Zhukov said, adding that the macro-economic situation in Russia was stable enough. "Russia currently has Europe's lowest ratio between foreign debt and international reserves, which have reached half a trillion U.S. dollars," Zhukov said. 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. 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