http://www.forbes.com/fdc/welcome_mjx.shtml
This article talks about how Russia is far more than just its natural resources. People often look at Russia as if its only source of wealth is its oil. The article quotes McCain when he calls Russia "a gas station masquerading as a country." However it disproves this fact in saying that its GDP per capita without its natural oil resources puts the country at a place comparable with other post- communist countries such as Bulgaria and Poland. It also compares to some other adjusted resource dependent state's GDP. The takeaway is that Russia is more than its natural resources. Without the natural resources Russia is a larger version of Romania.
The article mentions that Russia is not comparable by world standards as far as its production. We know that many post soviet countries suffered from a lack of a developed production system. The output that Russia produces isn't nearly as large as some of the other oil producing countries or resource rich countries. The country has more to it than its natural resources.
8 comments:
It was surprising to read that Russia's rents are not as high as not only OPEC countries but also other post-Soviet countries.
So Russia is also called "Nigeria with snow."
The lack of production is most likely due to their centrally planned nature that persevered for so long. Their economic history lacked incentive for innovation and improving production methods and processes.
I wonder if, by looking beyond the natural resources, Russia will improve their economic status? Oil prices determine so much in their economy. Maybe by focusing on production of goods Russia will not be as sensitive to oil effects.
I agree with Kevin. The lack of innovation is bringing Russia's economy down. Russia needs to focus on building other industries, otherwise it will hurt them in the long run. Their oil supply won't last forever.
Russia is still bound to having oligarchs that have too much control in decision-making. I agree with Jonel and Kevin that innovation is necessary for Russia to stabilize. Additionally, while Russia is more than just natural resources, gasoline prices have too much influence in their economic performance to be stable.
I would have to agree with what Kevin said. Innovation is a huge part of a successful economy and the lack of innovation in Russia is one of the reasons why the economy is struggling. If Russia incentivizes innovation it could turn around the economy in the short run.
Interesting article. Russia is a very large country but I agree with Will, moving towards incentivizing innovation could really help the economy. A lot of amazing programmers are based in Russia but work on smaller projects or migrate to U.S. to work for larger firms. Russia's tech boom often attracts foreign investors.
I feel like even though Russia's economy is not totally dependent on natural resources but these resources are Russia's primary export and I agree with the above commentators that Russia needs to accept and encourage innovation in all of its industries if it wishes to reduce its dependency on natural resources.
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