Exxon vs. Gazprom: What Does it Mean?

When comparing Russia with the United States, sometimes it helps to look at a specific sector of the economies. Taking Russia's strongest sector -- energy -- and comparing Gazprom with the US' strongest energy company -- Exxon -- might be instructive.

Exxon posted a record profit of $45 billion in 2008. Its fourth-quarter results were down because of falling prices for crude oil, but just 33%, and it rose to the top of Fortune 500 for the year. And Gazprom? Russia’s entry in the competition, a monopoly run by the Russian government itself, saw its profts fall by a whopping, truly breathtaking 84% in the fourth quarter of last year. Its total profits for the year were less than $30 billion, one third less that of Exxon Mobile, a single private American firm, and well below the market’s expectations.

This pure domination continues in the wider economic picture:

The world learned last week, for instance, that Russia’s GDP shrank 9.5% in the first quarter of 2009, even more than the 7% that that the Kremlin had originally reported. Here again, Russia’s performance was one-third worse than America’s. The U.S. economy shrank just 6% in the first quarter. The World Bank puts the value of Russia’s GDP at $1.3 trillion. The U.S. GDP is ten times larger, at $13.8 trillion. The difference, of course, is expanding rapidly as the Russian economy contracts much more dramatically.

Russia has only five companies on the list of the world’s 500 largest, a pathetic 1% of the total that must be shocking for those who imagine Russia to be an economic titan and “energy superpower.” Not one of Russia’s companies has revenues in excess of $100 billion. America has 153 companies on the list, nearly one-third of the total, thirty times more than Russia. Fifteen of the American firms have revenues in excess of $100 billion. McKesson, the smallest of the 15, has significantly more revenues than Gazprom, which is the largest of Russia’s enterprises.

Russia has just 32 billionaires, none worth as much as $10 billion. America has twenty times that number, twenty of whom have more than $10 billion in net worth.

We could go on, and on. By any standard, America and Russia are in two entirely different universes of economic power, and that of course translates into wholly incomparable levels of military power and living standards. Americans are #30/191 nations when ranked for lifespan, Russians are a miserable #128/191. _LaRussophobe

The long term prospects for the US -- once Obama and his army of mindless zombies are properly disposed of -- are sunny and warm. The long term prospects for Russia, on the other hand, are dismal at best. Russia's sky-high death rates combined with her low-low birth rates tell the tale of a nation that is not long for this Earth.

When the technological breakthroughs that allow a widespread passage through the singularity into the next level occur, the US population will be one of the best positioned nations on Earth to take advantage of the opportunity. It is not certain that Russia will even exist by then.