Russia’s integration into the world economy has been based on energy. Energy is predominant both in its domestic economy and foreign trade. In 2006, oil and gas made up 40 percent of gross domestic product and 60 percent of exports. Since 2000, rising oil export revenues have been the main driver of growth, as the price of Urals oil rose from below $10 per barrel to more than $60.
Continue reading “Channelling Energy in the Wrong Direction”
Russia’s temporary halt to oil supplies through the pipeline crossing Belarus earlier this month was the latest in a sequence of public relations disasters for the Kremlin. The West’s romance with President Vladimir Putin’s Russia ended with the Yukos affair and since then Russia has generally gotten bad press, even when it had a good case. The Sakhalin-2 affair is a good example.
Russia’s temporary halt to oil supplies through the pipeline crossing Belarus earlier this month was the latest in a sequence of public relations disasters for the Kremlin. The West’s romance with President Vladimir Putin’s Russia ended with the Yukos affair and since then Russia has generally gotten bad press, even when it had a good case. The Sakhalin-2 affair is a good example.
Continue reading “Shell vs. Russia: the balance is negative”
By Robert Skidelsky and Pavel Erochkine
Economists have started to become interested in the economics of clusters. Why do many industries concentrate in one or two locations? Why do some countries, regions and districts grow much faster than others? In the past the answer was obvious: What determined industrial location was climate or proximity to natural resources. But most modern economies are not like this. You do not need to have a particular climate or be near a steel plant to make computer chips or develop software. Location is much more likely to be the result of accidents or deliberate government policies.The U.S. economist Paul Krugman asks: “Where do you live if you work in the film industry? Probably in Los Angeles. Why? Because the other film industry people you need to work with are there. But they are there because they need to be near people like you.” Nobel Prize winner Robert Lucas makes the same point: “What can people be paying Manhattan or downtown Chicago rents for, if not for being near other people?”
By Robert Skidelsky and Pavel Erochkine
President Vladimir Putin used the bulk of his state-of-the-nation address to spell out measures aimed at improving the living standards of ordinary Russians. The measures will cost money — lots of money — but Russia can afford to spend as it is sitting on an ever-growing pile of cash thanks to high oil prices.
By Robert Skidelsky and Pavel Erochkine
Is capital flight a problem for Russia? Most people would say “yes” and would regard the recent reversal of capital flight as a positive sign for the Russian economy. But there is another school of thought that believes that capital movements should be a matter of complete indifference and certainly not the object of government concern.
Regime change in Iraq, probably by war, now seems inevitable “in weeks rather than months,” as U.S. President George W. Bush puts it. France and Russia are unlikely to veto a United Nations resolution specifically authorizing the use of force against Iraqi President Saddam Hussein. Their argument will be that, whether or not the war is justified, the most important thing now is to preserve the authority of the UN. But what authority will the UN have if it is simply a rubber stamp for U.S. unilateralism?
Continue reading “What Are the Real Reasons for a War in Iraq?”
The United States wants to remove Saddam Hussein from power; its main allies would be content with his disarmament. The United States, therefore, wants to keep the United Nations weapons inspectors out of Iraq; its allies want to get them back in.
Today, capitalism is under attack for the first time since the fall of communism. Three reasons are mainly, and coincidentally, responsible. First, bear markets rule in the three main stock exchanges of the world. Whenever a lot of people lose a lot of money, they blame business. Second, a wave of scandals has hit the United States, affecting some of its best-known companies – Enron, Tyco, WorldCom. Scandals and bear markets are connected: Dubious accounting practices that are submerged in a tide of prosperity are ruthlessly exposed when the tide recedes.
Continue reading “A Blind Faith in Capitalism is Being Rocked”
The United States has officially demanded an immediate Israeli withdrawal from the West Bank. Israel has vowed to continue its “war for survival.” Meanwhile, the peacemakers shuttle sadly round the Middle East, oblivious to the fact that no one is listening to them.
Continue reading “Try Trade for Peace, Instead of Land for Peace”
Robert Skidelsky 