Can Russia’s economy diversify away from energy exports?


Enrique 12 September, 2008, 18:58	The Russian economy is already diversified even if mostly in its first steps: 1. Car and auto parts manufacturing is just beginning in Russia. 2. Aerospace (civil and defense) is just trying to find out their market share with a level of quality at a less expensive price and cooperating with other independent manufacturers like Finnmecanica from Italy. 3. Software (Kaspersky) is known and developed in Russia even if there are still not Worldwide corporations. 4. Tourism is already a source for several billions of euros or USD a year but there is space for more from the Black Sea (Sochi and its Coast.you need a commercial name like the Gold Coast or the Costa del Sol) 5. Agricultural production is increasing again with the rise of grain prices and Russia needs more commercial and efficient manufacturing. 6. The timber industry is the one which first built the economy of American states like Washington and Oregon, so there is space for more value added pulp, paper and furniture production. 7. An industry which has developed at a high speed in Spain during the last decades have been Building creating billions of euros of wealth (also corruption) and some impressive companies. Some will fail but those who remain will be among the first in the World. 8. Responsive Banking has also a future in Russia now that Rusian Banks are clean and saved from the American excesses. With a credit system similar to the one now adopted in Brazil the housing boom in Russia will continue. If a couple of Russian Banks reach the levels of Santander and BBVA it will be great. In Spain it took years of consolidation (BSCH was the result of the merger of four traditional Spanish Banks: Santander, Central, Hispano and Banesto) 9. Fishing has been always an important element of Russian industry but its products are not known in foreign markets. 10. There is a nanotechnology program and the result of and its application to the industry is something we will see in the future. Russia has to improve the elements it already dominates and where has some advantage, from shipping to timber, machine tools etc. permalink quote 0 Enrique
Edwin 15 September, 2008, 08:39	Absolutely and it must. In order to do so, it also should focus its attention to the emerging countries like China & India. There exists every opportunity of an unlimited symbiotic (Mutually benefitial)relationship to grow between Russia and these economies and Russia should capitalize it. The region is starving for energy and Russia can provide it. A growing middle class in these countries also guarantees a promising market for Russia's aerospace industries. There are opportunities for construction materials of every kind as well. The list goes on and on. permalink quote 0 Edwin
Vijay Singh 15 September, 2008, 18:32	I feel the question is wrongly worded.! The better question would have "Whether Russia can increase the share of non-commodities in exports?" The answer is yes - Why not? One needs to build on one’s strength/s, not wean away from them. Since Commodities are Russia's mainstay - let it be so - the world needs commodities as much as it needs manufactured goods, financial services, information know-how and agricultural products. It needs military hardware, management techniques, scientific breakthroughs etc. All these and hundreds more products/services are marketable and revenue earners. All Russia has to do is to keep on building on its strengths and soon enough there will be people/nations/companies queuing up at Russian doors for more than Oil and Gas. And the queue has already started getting longer permalink quote 0 Vijay Singh
john 16 September, 2008, 17:36	Russia needs to diversify its customer base. No need to diversify energy but add value to the resources before exporting. For example, there are many options for natural gas. Why to export the raw gas? permalink quote 0 john
Fred 17 September, 2008, 18:47	Russia has a WEIRD economy! it was best summed up a Bloom County cartoon. The radio announced Russias latest space triumphs on Mir, followed by "Meanwhile Nasa just launced a communications satelite that will beam Ishtar to Puerto Rico" One of character then screamed "Were Getting the the pants beat off us in the space race by a country that cant even make a single decent Clock Radio!" to which his partner responded " But the have Vodka! & a Mean furry hat!!" (Not the obvious precursors to space travel) It just seems to be all or nothing with the technology . Great space capsules, Vodka, fighter planes, Submarines, Furry hats, All among the worlds BEST but exports of intermediate complexity like Washing MAchines & cars, seem to have insurmountable quality issues. EVERYONE would want a Ride on soyuz &I myself buy the Vodka & furry hats, but even Russians like Yeltsin passed on the Volga, Lada, Zaz & other less than perfect Russian car manufacturers as the average Russian car has many quality problems. Sadly so does the average American car, In Russia & America, Cars, TVs , Clock Radios are all saying "Made in Japan" these days, & America is starting to find itself in the same situation as Russia with regard to intermediate technology exports, & a limited economy. permalink quote 0 Fred
fred ! no ! the other one ... 18 September, 2008, 09:59	fred (bit weird i feel like talking to myself !!:-) ) no , Russia hasn't got a "weird" economy .! just a recovering one , it take times to fix all aspect of problem .! think that when SU collapsed they had to make new laws , new standards , new rules on the way as the problems were popping out . on this respect , they did a good job ! (off-course = not perfect ; but who can say "We are perfect !" ? ) so to come back to question : Can Russia’s economy diversify away from energy exports? it is not a question "if it can ." but a simple matter of : IT HAS TO , IT MUST ! at the time being , Russia is selling raw resources , better if they could transform BEFORE exporting . with added benefits , develop other means of economy .! time will run out soon . USA is starting to acknowledge the price of not being able to see "World has Changed ." Russia should learn a good lesson out of it ! permalink quote 0 fred ! no ! the other one ...
Enrique 22 September, 2008, 14:58	For touristic reasons perhaps it would be a great idea to rename Volgograd again as STALINGRAD to remember the famous Battle. Thousands of citizens around the World are eager to know where is and travel to Stalingrad. There are several movies about the Battle, the last one from Germany.and thousands of tourists would like to visit the place and, if there is, a modern Museum (with a well known architect) about it. Apart it is a city close to the second area with more energy resources in the World (Caspian Sea - Caucasus) permalink quote 0 Enrique
Enrique 22 September, 2008, 15:14	South Ossetia has a similar population as Andorra and its situation between Russia and Georgia resembles that of Andorra between Spain and France. Andorra, a Free Trade enclave, has been successful and its level of life is better than Spain´s or France´s. Andorra is also in a mountainous area like South Ossetia. permalink quote 0 Enrique
Sevodnya_Net 22 September, 2008, 22:45	Calling South Ossetia a "free trade enclave" has got to be the euphemism of the century (I know the century hasn't really got going yet, but still :-) ) One of the multitude of differences between S. Ossetia and Andorra is the fact that Andorra exists peacefully between its neighbours, who have joint responsibility for its security. A major factor in its prosperity. One cannot really say the same about South Ossetia. On the other point, why not just re-name the battle of Stalingrad to be the battle of Volgograd :-) permalink quote 0 Sevodnya_Net
Enrique 23 September, 2008, 03:27	Sevodnya, Andorra is an example for the future (tax heaven and free trade with Spain and France) not the present situation as we know. Anyway, commercial links between Georgia and Russia continue and will increase in the future as it is necessary for both sides.and South Ossetia will be the right place for common business. Nobody in the World knows about Volgograd but millions of people in the World know about Stalingrad and thousands would like to visit a city called Stalingrad. I ve watched pics of an impressive statue remembering the victory in that Battle.but few people in Western Europe have ever watched that statue or heard about Volgograd. permalink quote 0 Enrique
Enrique 27 September, 2008, 16:44	Vladivostok could have a commercial name for tourism like "Asian Gate to Europe. European Gate to Asia" for example. permalink quote 0 Enrique
David 3 October, 2008, 06:03	If Russia's intelligence continue to find a way to harness energy without having to reply on fossil fuels, and concentrate on becoming the breadbasket of the world - unfortunately Rhodesia is now gone -, yes, she can. We cannot eat oil or gas but we do not food to survive permalink quote 0 David
Enrique 4 October, 2008, 14:14	The present milk crisis in China could mean $billions in exports of Russian milk if there were the necessary producers and control of quality. permalink quote 0 Enrique
Enrique 5 October, 2008, 15:30	Vladivostok city alone with just 580,000 people only could be a kind of Macao, which has ten times less population than Hong Kong. So Vladivostok should build a Metropolitan Area including Nakhoda with over 800,000 people and aiming at a population of 1,5 million people like Brisbane (Australia) Vladivostok Metropolitan Area needs more than 1 million people to become a Global city like Vancouver or Brisbane. While in Australia over 60% of the population resides in the capital of the state in Primorsky Krai it is just 25%, even if 40% in the sourronding area. V.M.A. Vladivostok Metropolitan Area, with over 800,000 people would be an start for the future. permalink quote 0 Enrique
Enrique 9 October, 2008, 13:44	In one report RT talked about thousands of beggars and children without resources living in St. Petersbourg. If there are 100,000 people living on so bad conditions in European Russia, without future, without anything to lose.perhaps it is time for a Program to give these people a future in the unpopulated East. I am sure that a great part of this people, above all when they are alone and aware about their harsh conditions and under Government control for some time (until they learn to live by themselves), they can find a new live, a future, in some resource-rich and eviromental paradise regions of the Far East. It is a pity that so many dozens of thousands of people just will desappear without even trying to go ahead building a family.and no better place than the underpopulating Far East (not in Primorsky Krai, which is populated) permalink quote 0 Enrique
Regular_John 10 October, 2008, 14:50	Russia needs to rid itself of the bureaucracy and corruption before this process can happen small business are the real engine that drives an economy, because as they become successful they grow. In Russia a new company expects to pay out 25% of its start up capital to corrupt officials who line up to have their little documents stamped these people see this as part of their salary much like a waiter receiving a tip. Sorry but who in their right mind wants to set up a business in this environment certainly not foreigners, when they can go to India or china and receive a warm welcome and suffer only a tiny amount of red tap. Unfortunately under Putin Russia mixed business with politics as seen with TNK/BP and others, China/India are wise enough not to make this mistake. Putin was in power for 8 years and done nothing to end Russia’s endemic corruption and bureaucracy history will judge him badly because of this failure and Russia will now in this time of global economic slow down suffer the consequences of his in action permalink quote 0 Regular_John
Soar 13 October, 2008, 15:37	The Russian federal government depends on oil for its tax revenues and resurgent strength. The Russian economy has not depended on oil since 2003. The general economy has outgrown the oil sector ever since then. The main driver has been productivity growth in the distribution and construction sectors (Dutch disease sectors to be sure but in the Russian case benign). There has also been productivity growth in manufacturing as, led by improved distribution, Russian light industry has learnt how to compete in the consumer sector. permalink quote 0 Soar
Enrique 16 October, 2008, 10:49	If Russia supports Iceland with over $4 billion it is evident it will ask Iceland to support Russian demands in the Artic. permalink quote 0 Enrique
Soar 17 October, 2008, 16:15	Enrique! Of course. I didn't get that. I was thinking about oliigarchs with off shore accounts. permalink quote 0 Soar
Soar 17 October, 2008, 16:23	Actually, the slow down will help Russia to diversify. Apparently many government funded infrastructure projects were deferred to reduce inflation. The cost of a bag of cement is now falling fast. The infrastraucture projects will now be revived. Airports, roads, railways, ports, air traffic control, weather forecasting, hospitals, renewal of old telephone systems, water and sewage projects, enhanced introduction of IT into government and administration (local, national and policing). iven Russia's underdevelopment, all such projects will produce large productivity gains for the rest of the economy enhacing the relative competitiveness of the non oil sectors. (Actually oil and metals need infrastructure too. Russia sells crude not refined products. No refineries, no chemical plants.) permalink quote 0 Soar

Enrique 12 September, 2008, 18:58

The Russian economy is already diversified even if mostly in its first steps: 1. Car and auto parts manufacturing is just beginning in Russia. 2. Aerospace (civil and defense) is just trying to find out their market share with a level of quality at a less expensive price and cooperating with other independent manufacturers like Finnmecanica from Italy. 3. Software (Kaspersky) is known and developed in Russia even if there are still not Worldwide corporations. 4. Tourism is already a source for several billions of euros or USD a year but there is space for more from the Black Sea (Sochi and its Coast.you need a commercial name like the Gold Coast or the Costa del Sol) 5. Agricultural production is increasing again with the rise of grain prices and Russia needs more commercial and efficient manufacturing. 6. The timber industry is the one which first built the economy of American states like Washington and Oregon, so there is space for more value added pulp, paper and furniture production. 7. An industry which has developed at a high speed in Spain during the last decades have been Building creating billions of euros of wealth (also corruption) and some impressive companies. Some will fail but those who remain will be among the first in the World. 8. Responsive Banking has also a future in Russia now that Rusian Banks are clean and saved from the American excesses. With a credit system similar to the one now adopted in Brazil the housing boom in Russia will continue. If a couple of Russian Banks reach the levels of Santander and BBVA it will be great. In Spain it took years of consolidation (BSCH was the result of the merger of four traditional Spanish Banks: Santander, Central, Hispano and Banesto) 9. Fishing has been always an important element of Russian industry but its products are not known in foreign markets. 10. There is a nanotechnology program and the result of and its application to the industry is something we will see in the future. Russia has to improve the elements it already dominates and where has some advantage, from shipping to timber, machine tools etc.

permalink quote Enrique

Edwin 15 September, 2008, 08:39

Absolutely and it must. In order to do so, it also should focus its attention to the emerging countries like China & India. There exists every opportunity of an unlimited symbiotic (Mutually benefitial)relationship to grow between Russia and these economies and Russia should capitalize it. The region is starving for energy and Russia can provide it. A growing middle class in these countries also guarantees a promising market for Russia's aerospace industries. There are opportunities for construction materials of every kind as well. The list goes on and on.

permalink quote Edwin

Vijay Singh 15 September, 2008, 18:32

I feel the question is wrongly worded.! The better question would have "Whether Russia can increase the share of non-commodities in exports?" The answer is yes - Why not? One needs to build on one’s strength/s, not wean away from them. Since Commodities are Russia's mainstay - let it be so - the world needs commodities as much as it needs manufactured goods, financial services, information know-how and agricultural products. It needs military hardware, management techniques, scientific breakthroughs etc. All these and hundreds more products/services are marketable and revenue earners. All Russia has to do is to keep on building on its strengths and soon enough there will be people/nations/companies queuing up at Russian doors for more than Oil and Gas. And the queue has already started getting longer

permalink quote Vijay Singh

john 16 September, 2008, 17:36

Russia needs to diversify its customer base. No need to diversify energy but add value to the resources before exporting. For example, there are many options for natural gas. Why to export the raw gas?

permalink quote john

Fred 17 September, 2008, 18:47

Russia has a WEIRD economy! it was best summed up a Bloom County cartoon. The radio announced Russias latest space triumphs on Mir, followed by "Meanwhile Nasa just launced a communications satelite that will beam Ishtar to Puerto Rico" One of character then screamed "Were Getting the the pants beat off us in the space race by a country that cant even make a single decent Clock Radio!" to which his partner responded " But the have Vodka! & a Mean furry hat!!" (Not the obvious precursors to space travel) It just seems to be all or nothing with the technology . Great space capsules, Vodka, fighter planes, Submarines, Furry hats, All among the worlds BEST but exports of intermediate complexity like Washing MAchines & cars, seem to have insurmountable quality issues. EVERYONE would want a Ride on soyuz &I myself buy the Vodka & furry hats, but even Russians like Yeltsin passed on the Volga, Lada, Zaz & other less than perfect Russian car manufacturers as the average Russian car has many quality problems. Sadly so does the average American car, In Russia & America, Cars, TVs , Clock Radios are all saying "Made in Japan" these days, & America is starting to find itself in the same situation as Russia with regard to intermediate technology exports, & a limited economy.

permalink quote Fred

fred ! no ! the other one ... 18 September, 2008, 09:59

fred (bit weird i feel like talking to myself !!:-) ) no , Russia hasn't got a "weird" economy .! just a recovering one , it take times to fix all aspect of problem .! think that when SU collapsed they had to make new laws , new standards , new rules on the way as the problems were popping out . on this respect , they did a good job ! (off-course = not perfect ; but who can say "We are perfect !" ? ) so to come back to question : Can Russia’s economy diversify away from energy exports? it is not a question "if it can ." but a simple matter of : IT HAS TO , IT MUST ! at the time being , Russia is selling raw resources , better if they could transform BEFORE exporting . with added benefits , develop other means of economy .! time will run out soon . USA is starting to acknowledge the price of not being able to see "World has Changed ." Russia should learn a good lesson out of it !

permalink quote fred ! no ! the other one ...

Enrique 22 September, 2008, 14:58

For touristic reasons perhaps it would be a great idea to rename Volgograd again as STALINGRAD to remember the famous Battle. Thousands of citizens around the World are eager to know where is and travel to Stalingrad. There are several movies about the Battle, the last one from Germany.and thousands of tourists would like to visit the place and, if there is, a modern Museum (with a well known architect) about it. Apart it is a city close to the second area with more energy resources in the World (Caspian Sea - Caucasus)

permalink quote Enrique

Enrique 22 September, 2008, 15:14

South Ossetia has a similar population as Andorra and its situation between Russia and Georgia resembles that of Andorra between Spain and France. Andorra, a Free Trade enclave, has been successful and its level of life is better than Spain´s or France´s. Andorra is also in a mountainous area like South Ossetia.

permalink quote Enrique

Sevodnya_Net 22 September, 2008, 22:45

Calling South Ossetia a "free trade enclave" has got to be the euphemism of the century (I know the century hasn't really got going yet, but still :-) ) One of the multitude of differences between S. Ossetia and Andorra is the fact that Andorra exists peacefully between its neighbours, who have joint responsibility for its security. A major factor in its prosperity. One cannot really say the same about South Ossetia. On the other point, why not just re-name the battle of Stalingrad to be the battle of Volgograd :-)

permalink quote Sevodnya_Net

Enrique 23 September, 2008, 03:27

Sevodnya, Andorra is an example for the future (tax heaven and free trade with Spain and France) not the present situation as we know. Anyway, commercial links between Georgia and Russia continue and will increase in the future as it is necessary for both sides.and South Ossetia will be the right place for common business. Nobody in the World knows about Volgograd but millions of people in the World know about Stalingrad and thousands would like to visit a city called Stalingrad. I ve watched pics of an impressive statue remembering the victory in that Battle.but few people in Western Europe have ever watched that statue or heard about Volgograd.

permalink quote Enrique

Enrique 27 September, 2008, 16:44

Vladivostok could have a commercial name for tourism like "Asian Gate to Europe. European Gate to Asia" for example.

permalink quote Enrique

David 3 October, 2008, 06:03

If Russia's intelligence continue to find a way to harness energy without having to reply on fossil fuels, and concentrate on becoming the breadbasket of the world - unfortunately Rhodesia is now gone -, yes, she can. We cannot eat oil or gas but we do not food to survive

permalink quote David

Enrique 4 October, 2008, 14:14

The present milk crisis in China could mean $billions in exports of Russian milk if there were the necessary producers and control of quality.

permalink quote Enrique

Enrique 5 October, 2008, 15:30

Vladivostok city alone with just 580,000 people only could be a kind of Macao, which has ten times less population than Hong Kong. So Vladivostok should build a Metropolitan Area including Nakhoda with over 800,000 people and aiming at a population of 1,5 million people like Brisbane (Australia) Vladivostok Metropolitan Area needs more than 1 million people to become a Global city like Vancouver or Brisbane. While in Australia over 60% of the population resides in the capital of the state in Primorsky Krai it is just 25%, even if 40% in the sourronding area. V.M.A. Vladivostok Metropolitan Area, with over 800,000 people would be an start for the future.

permalink quote Enrique

Enrique 9 October, 2008, 13:44

In one report RT talked about thousands of beggars and children without resources living in St. Petersbourg. If there are 100,000 people living on so bad conditions in European Russia, without future, without anything to lose.perhaps it is time for a Program to give these people a future in the unpopulated East. I am sure that a great part of this people, above all when they are alone and aware about their harsh conditions and under Government control for some time (until they learn to live by themselves), they can find a new live, a future, in some resource-rich and eviromental paradise regions of the Far East. It is a pity that so many dozens of thousands of people just will desappear without even trying to go ahead building a family.and no better place than the underpopulating Far East (not in Primorsky Krai, which is populated)

permalink quote Enrique

Regular_John 10 October, 2008, 14:50

Russia needs to rid itself of the bureaucracy and corruption before this process can happen small business are the real engine that drives an economy, because as they become successful they grow. In Russia a new company expects to pay out 25% of its start up capital to corrupt officials who line up to have their little documents stamped these people see this as part of their salary much like a waiter receiving a tip. Sorry but who in their right mind wants to set up a business in this environment certainly not foreigners, when they can go to India or china and receive a warm welcome and suffer only a tiny amount of red tap. Unfortunately under Putin Russia mixed business with politics as seen with TNK/BP and others, China/India are wise enough not to make this mistake. Putin was in power for 8 years and done nothing to end Russia’s endemic corruption and bureaucracy history will judge him badly because of this failure and Russia will now in this time of global economic slow down suffer the consequences of his in action

permalink quote Regular_John

Soar 13 October, 2008, 15:37

The Russian federal government depends on oil for its tax revenues and resurgent strength. The Russian economy has not depended on oil since 2003. The general economy has outgrown the oil sector ever since then. The main driver has been productivity growth in the distribution and construction sectors (Dutch disease sectors to be sure but in the Russian case benign). There has also been productivity growth in manufacturing as, led by improved distribution, Russian light industry has learnt how to compete in the consumer sector.

permalink quote Soar

Enrique 16 October, 2008, 10:49

If Russia supports Iceland with over $4 billion it is evident it will ask Iceland to support Russian demands in the Artic.

permalink quote Enrique

Soar 17 October, 2008, 16:15

Enrique! Of course. I didn't get that. I was thinking about oliigarchs with off shore accounts.

permalink quote Soar

Soar 17 October, 2008, 16:23

Actually, the slow down will help Russia to diversify. Apparently many government funded infrastructure projects were deferred to reduce inflation. The cost of a bag of cement is now falling fast. The infrastraucture projects will now be revived. Airports, roads, railways, ports, air traffic control, weather forecasting, hospitals, renewal of old telephone systems, water and sewage projects, enhanced introduction of IT into government and administration (local, national and policing). iven Russia's underdevelopment, all such projects will produce large productivity gains for the rest of the economy enhacing the relative competitiveness of the non oil sectors. (Actually oil and metals need infrastructure too. Russia sells crude not refined products. No refineries, no chemical plants.)

permalink quote Soar

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