An article in the Huffington Post caught my attention: What Russia’s Failing Economy Means
A few lines from it:
“But the economic decline in Russia started in the very beginning of 2012. The growth rate was only 1.3 percent in 2013, for example, when oil was well above $100 per barrel”
“The key problem of the economy, and the key reason for the decline, was the decline in investment. The economy cannot grow without investment…In 2012, investment stopped growing. In 2014, investment started to decline. That’s the main reason why the Russian economy is contracting.”
“That means that the only one real chance the Russian economy has is if the government improves the investment climate and boosts investment. But in order to do this, Russia needs to implement the rule of law. Once again, that’s not in the interest of Putin, because implementing the rule of law is the best way for him to lose power” (I put this line in bold)
The increase in military budget by 0.8 percent when inflation in the country is 13 percent actually means shrinking of the military budget. I would not pay big attention to the nominal numbers because inflation in Russia is very high.
“It’s important to note that the Russian economy is not in free fall. It’s not like a landslide, like in Venezuela” (which nicely serves as a lead-in to my next post)
And finally:
“They [poverty and unemployment] may change the political climate, but it won’t happen in a year, or in two years. It may take a decade, maybe, but it’s not a very fast and rapid process.”
