Putin Holds Russia in Accelerating Death Spiral

There is only one way that Russia could stop its accelerating population implosion. That is to give the Russian people something to live for, a reason to procreate -- the dream of a better life. But that is the one thing that Vladimir Putin refuses to provide to the long-suffering people of Russia, because it might get in the way of his dream.

Moscow’s excessive reliance on profits from the export of oil and gas -- the centerpiece of Vladimir Putin’s policies – has been contributing to a significant decline in the standard of living of most Russians beyond the capital’s ring road even as it has boosted the country’s GDP, according to a UN report on “Energy and Stable Development.”

As a result, Nataliya Zubarevich, a geographer at Moscow State University who helped prepare the report says, “there is oil and gas [in Russia] but no happiness,” at least outside Moscow, the oil and gas producing regions of Khanty-Mansiisk and Yamalo-Nenets, and the processing center in Tyumen (www.polit.ru/news/2010/04/21/paras.html).

Because the Russian government has “incorrectly” relied on oil and gas profits alone to show economic growth, she continues, there has been a decline in the well-being of Russian citizens, not only in terms of income but also in health, education and other social services.

... as long as the oil and gas money is flowing in, “the Russian powers that be really are not interested in innovations.”

Such people don’t need or want change, and they talk about innovations only to make themselves look better “in the eyes of the world.” Because that is so, Zubarevich argues, the distribution of profits is unlikely “to simulate innovations.” Instead, even if money is redistributed more equally, that alone will not promote positive change.

Indeed, the Moscow geographer says, for innovation, there will need to be “a change of institutions and the rules of the game in society.” People will have to be rewarded not because of where they sit and what they control but rather for what they think up, a complete transformation from the current situation.

...“In the institutional design which now exists in the Russian Federation,” Zubarevich said, noting that this was her “personal opinion,” “innovative development is impossible.” And some of the proposals for innovation, such as Academic Zhorez Alferov’s call for a Manhattan Project-style effort, simply won’t work.

Alferov, Zyubarevich pointed out, “is a member of the Communist Party of the Russian Federation.” He always put the state in first place, and while the state can play some role, the kinds of innovations Russia needs are not “’nano’ and not ‘nuclear research’” but rather a broadening of opportunity for “small innovation improvements in the entire structure.”

Indeed, she says, even if Russians came up with a breakthrough in nano technology, the country would not be able to introduce it because “we do not have the stimuli and drivers which would be necessary for that kind of innovation.” Perhaps the country can change so that this will be possible, Zubarevich concludes, but it will have to change in major ways. _enerpub

Putin will not allow these infrastructural changes toward greater freedom for individuals and small businesspersons. Putin fears entrepreneurs -- who might grow too large and powerful, upsetting Putin's carefully orchestrated balance of power (and terror).

It is much easier to maintain a stranglehold on a few giant enterprises than on hundreds of thousands of small to intermediate enterprises -- any of which might suddenly grow larger and more powerful without warning.

It should now be easier to understand why Obama - Pelosi has taken the steps it has taken to control ever-larger aspects of the US economy. The masses of people may suffer and lose their freedoms, but the class of oligarchs at the top will have a much firmer control of things.