Analysts urge Russia to diversify economy
http://news.yahoo.com/s/ap/20060705/ap_ ... economy_g8
The Russian economy is very diversified. Far more than any other energy exporting nation.
Can Saudi Arabia do even 100/th of Russia out side of the energy sector?
Russia's problem is not diversification, that trigger has been started, like trickle down Reaganomics. The real issue is "volume". And as she produces more, the consumer economy will grow like crazy, along with the military industrial complex. Not only will a growing Russia diversify even more, but internal industries will demand more energy, this will make Russian (energy) exports DROP. Russia's eventual drop in exports will once again drive energy prices higher, and higher. This will infuse places like Iran, and Venezuela, Ecuador, Bolivia with more cash, which will in turn, be used to purchase more Russian arms, and again, DROPPING energy exports... a cycle, pure resonance that optimizes the advantage for energy producers.
And Russia is in a very special situation. It's the only nation with nuclear weapons and nuclear energy that is energy self sufficient. The only energy exporting nation that can send man to space in a reliable effort. Software engineering, jet engines, semiconductors, avionics, aerospace, even consumer foods are far healthier than American's steroid, anti-biotic lased crap food. Many cities throughout Russia and the former soviet union have their own TV and shoe factories. Name me one American city that has such diverse factories?
Clothes are manufactured on the outskirts of Moscow, the most expensive city on Earth. How can this be? Probably because the government is doing allot to avoid the Dutch disease by taking that oil money and buffering in super funds, stabilization funds, and buying up assets all over the planet.
This is a question of volume, not diversity.
Don't worry Mr. Analyst, Russia is diversifying, and in doing so, will export far less energy.