HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11743
Location: Los Angeles, California
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 Posted: Wed Jan 28, 2009 9:23 pm Post subject: |
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Well, the Russian Oligarchs weren't too different - tacking on huge amounts of debt while plundering their population at the same time. In the meantime, Putin is rolling back freedoms and has failed to invest in Russia's schools, financial infrastructure, physical (including energy), and legal infrastructure. Putin's speech is all talk and no substance. Russia is becoming highly irrelevant in the 21st century, as its population continues to decline and its talent pool continues to shrink/migrate to the US or Western Europe.
That is the trouble - it is easy to fault the overextended Americans who leveraged their balance sheets in the last five years, but on the other hand, both China and Russia were quite happy with this status quo until the very end. This is what happens when you fail to develop internal financial expertise and domestic consumption and solely rely on foreigners for aggregate demand. It is highly unstable and at some point, it will collapse, which it did in late 2007. If China had been more self-sufficient, developed social safety nets, and let the Renminbi float more freely over the last few years, this crisis would have been more muted. Same with Russia - if they had actually invested in their citizens' education and infrastructure over the last decade, there would not have been a run on the Ruble over the last 12 months.
If Western Europe starts listening and adopts GM-seeds - and once (not if) the US/Japanese/German scientists find a breakthrough in solar or cellulosic ethanol technology - then Russia effectively has nothing to sell to the world. By 2020, I believe Russia would be highly irrelevant - and will most likely end up as a marginal energy exporter to Eastern Europe and to China. |
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