A. Russia’s economy is growing fantastically in several areas.
2008 CIA World Fact book—Russia https://www.cia.gov/library/publications/the-world-factbook/geos/rs.html#Econ
Russia ended 2007 with its ninth straight year of growth, averaging 7% annually since thefinancial crisis of 1998
high oil prices
and a relatively cheap ruble initially
drove this growth
since2003 consumer demand and, more recently, investment have played a significant role. Over the last six years, fixed capital investments haveaveraged real gains greater than 10% per year and personal incomes have achieved real gains more than 12% per year. During this time,
poverty has declined steadily and the middle class has continued to expand.
Russia has alsoimproved its international financial position
since the 1998 financial crisis.
The federal budget has runsurpluses since 2001 and ended 2007 with a surplus of about 3% of GDP.
Over the past several years,Russia has used its stabilization fund based on oil taxes to prepay all Soviet-era sovereign debt to Paris Club creditors and the IMF. Foreign debtis approximately one-third of GDP. The state component of foreign debt has declined, but commercial debt to foreigners has risen strongly. Oilexport earnings have allowed Russia to increase its foreign reserves from $12 billion in 1999 to some $470 billion at yearend 2007, the thirdlargest reserves in the world.
During President PUTIN's first administration, a number of importantreforms were implemented
in the areas of tax, banking, labor, and land codes.
These achievements have raisedbusiness and investor confidence in Russia's economic prospects, with foreign directinvestment rising
from $14.6 billion in 2005 to approximately $45 billion in 2007. In 2007, Russia's GDP grew 8.1%, led by non-tradable services and goods for the domestic market, as opposed to oil or mineral extraction and exports. Rising inflation returned in the secondhalf of 2007, driven largely by unsterilized capital inflows and by rising food costs, and approached 12% by year-end. In 2006, Russia signed a bilateral market access agreement with the US as a prelude to possible WTO entry, and its companies are involved in global merger andacquisition activity in the oil and gas, metals, and telecom sectors
Saudi Arabia will flood the oil market and sink oil prices if alternative energy is developedEnergy Tech
Saudi Arabia still has a lot of oil
; nevertheless, the world doesn’t have enough to meet forecasted demand of roughly 115million barrels a day by 2030, a more than 30% increase over today’s 87 million barrel daily consumption. Shorter term,
should OPECmembers feel threatened by new alternative energy technologies, they very well may floodthe market,
driving crude prices down in order to make the new technologiesappear financially unattractive
That’s the analysis of Valerie Marcel, a Dubai-based petro-politics expert and the author of “Oil Titans: National Oil Companies in the Middle East.” During a lengthy conversation, Marcel, who is an associate fellow at UK-basedChatham House, one of Europe’s leading foreign policy think-tanks, told EnergyTechStocks.com that she wasn’t optimistic that oil shortages can be avoided, despite growing recognition of the problem in major oil-consuming nations. Marcel further said that
the Saudi nationaloil company
– Saudi Aramco
appears worried about
fuel cell vehicles and other
attempts by the world towean itself off oil, and
should it and other OPEC members feel threatened, they would“play hardball,” flooding the market in an attempt to derail the new technologies.
Marcel saidthat after 36 separate interviews with oil company officials, she believes Saudi Arabia probably has about 75 years of reserves remaining atcurrent production rates, and that
the Kingdom is capable of raising daily production from around ninemillion barrels a day currently to a sustained 12.5 million per day,
which is its plan. At the same time,Marcel said she understands why, given the Kingdom’s self-imposed secrecy surrounding its oil industry, the world keeps asking, “Why shouldwe trust them?”
B. Low oil prices will kill Russia’s economy