29 May 2009

Too Late for Oil to Save Russia -- at Any Price

Putin’s Kremlin made a fateful bet that natural resources—oil, gas, and other extractive saleable commodities—would be the springboard for the restoration of Moscow’s influence as a great power on the world stage. In this gamble, Russian authorities have mainly ignored the nation’s human resource crisis. During the boom years—Russia’s per capita income roughly doubled between 1998 and 2007—the country’s death rate barely budged. Very much worse may lie ahead. How Russia’s still-unfolding demographic disaster will affect the country’s domestic political situation—and its international security posture—are questions that remain to be answered. _WAJ
Expert opinions are split on the near and medium term future of oil prices. Jim Rogers predicts high oil prices soon and for the indefinite future. Many analysts see steady drops in oil production due to low prices erasing the widespread oversupply in oil stockpiles. Since it can take years for many oil producers to gear back up to higher production, such a trend suggests a period of extended oil under-supply -- and higher prices -- in the not so distant future.

Russia is hoping that oil prices do indeed jump above $100 a barrel, and stay there! But is it too late for Russia, regardless of oil and commodities prices? Certainly Russia has no hope if the world economy remains stuck in the doldrums.
Russia has lost more than 12m people since depopulation started in 1992. This trend currently shows no signs of slowing down, and Russia will continue to lose people – the only question is: how quickly? An expert at the Russian Academy of Sciences Anatoly Vishnevsky painted an even gloomier picture, predicting a population of 98m for Russia in 2050....

....Even more troubling is that the number of able-bodied adults is declining faster than any other demographic category. This group is expected to absorb the bulk of the losses, declining by 14m by 2025. According to the RBC daily, in 16 years every 1,000 employed Russians are going to be providing for some 800 dependents...

...Education and careers are the priorities now, and starting a family is often on the backburner, for women as much as for men. Various proposals have been championed to combat people’s unwillingness to have more children. _Telegraph
But Russia has been burning the candle on both ends -- fewer births, more deaths. HIV, Tuberculosis, alcoholism (an often fatal disease), suicide, homicide -- these are modern Russia's epidemics.

Corruption in Russia's government is so bad that unless a person has connections to state power, their future prospects are not favourable. During the oil boom of 2007 and 2008, there was enough wealth flowing through Russia's economy to paint a patina of glitz over the drunken rot beneath. With the crash in commodities and the global economic downturn, Russia has suffered inordinately due to government corruption and its overreliance on a nationalised energy industry.

So Russia's only hope is to be able to stick it to the rest of the world via high energy prices. But is it too late for Russia, no matter how high the price of fossil fuels go?

Yes, it is too late. Prosperity from another boom in oil prices will accrue to the top of the government power pyramid first of all. From there, it will slowly flow downward in a very uneven course. Foreign investment will be slower in coming than in past years, due to the Russian government's kleptocratic tendency to nationalise anything it wishes.

Most Russians -- particularly those in the endangered zones far away from Moscow and St. Petersburg -- will see little improvement in personal circumstances, due to corrupt concentrations of power, profits, and resources. They will continue to die early, and neglect to reproduce. Fertile Russian women will continue to flock overseas as mail and internet brides. They will have their babies in what used to be termed "the free world", to non-Russian fathers.

The western world is helping Russia's corrupt kleptocracy continue to rape and exterminate its own people via its carbon hysteria quasi-religion -- which leads to political peak oil and artificially inflated oil prices. For that, you can thank Brock O'Bomba and his merry gang of green apocalyptics.

Russia has never had the benefit of an enlightened government. Its people have always been "slavs" to their leaders. America does not have such an excuse of a dozen generations of slavic mind programming. Russians were dragged downward over the many centuries until fatalism and passive nihilism became a part of the innate psychology. Americans made a conscious choice to go down the irrational path.


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Anonymous Anonymous said...

I have been utterly amazed at how bad things are going in Russia and how little this is appreciated in the rest of the world. Never mind the unrest among ethnic groups seeking independence; even Russian groups are in revolt. Russian society seems to be increasingly made up of victims and villains. Large numbers of the Russian middle class can't describe what their job is or what their company does because they are (or were) being paid by resource money to be middle class consumers.

The economy is currently slowing its death spiral ever so slightly and everyone thinks the worst is over when the Russian version of the credit crisis has not even hit the fan yet.

They're going to be selling nuclear weapons for cartloads of turnips before this is over.

Friday, 29 May, 2009  
Blogger al fin said...

Russians have no proper role model of good leadership. Only dictators and tyrants all the way back to the Rus.

It is tragic to watch Russians laying claim to the huge mineral resources of the Arctic when they will soon lack the manpower to defend all but the core of Russia west of the Urals.

All of the saber rattling toward Eastern and Western Europe will come back to haunt the hollow bear.

Saturday, 30 May, 2009  

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“During times of universal deceit, telling the truth becomes a revolutionary act” _George Orwell

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