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What Will Happen To Russia 2 Years Later?

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  • What Will Happen To Russia 2 Years Later?

    What Will Happen To Russia 2 Years Later?

    Naira Hayrumyan, Political Commentator
    Comments - 25 October 2014, 17:25


    A wild process of redistribution of property is underway in Russia.
    Semi-state oligarchic giants are trying to steal the state reserves
    entirely to survive and stay in government. Meanwhile, survival is
    getting more and more difficult due to the decline of oil prices and
    international demand. It is even harder for a country which has failed
    to invest oil dollars in technology, and the government has built
    vertical power, distributing national wealth among groups of
    oligarchs.

    Despite the fall of oil price, Russia is facing high prices and
    shortage of petrol. This was especially evident in the east of the
    country where people wonder how come the country that sells oil does
    not have oil processing industries. Why has the government instructed
    Gazprom to import petrol? Why would Belarus which produces 5% of
    Russian petrol influence the Russian market?

    Experts say the Western technologies allow producing 4 times more
    petrol from the same quantity of oil. Therefore, it is cheaper there.
    Besides, shallow oil production technology in the United States has
    been improved to the extent that now its production is profitable even
    if one barrel costs 57 dollars.

    The leading oil producer of Russia Rosneft does not invest in
    modernization. As a result, one of the world's more capitalized
    companies owes 30 billion dollars. Now it needs state's help to
    survive.

    The head of Rosneft has requested 50 billion dollars, half of National
    Welfare Fund, "to develop several projects". This is not enough
    though, and Russia is likely to sell 20% of Rosneft's shares.
    Although, the state will support Rosneft because otherwise it will
    have to toll the death of the present government.

    At the same time, a process of nationalization of property has started
    in Russia. Obviously, there is not enough money, and the draft law on
    nationalization of part of privatized property. The new regulations
    will be applied to the weak links, primarily Bashneft and Mechel.

    Experts claim that Russia has enough resources to stand for 1.5-2
    years. What next? Russian giants have neither opportunities nor
    intentions to invest in technology and raise their sales. Using
    military-political methods to "block" the way of their competitors is
    deemed an easier way. However, this is an old mechanism and breaks
    down often.

    It should be noted that Rosneft now holds monopoly of oil supply to
    Armenia. It means that prices in Armenia will not fall despite the
    falling prices of oil and petrol in the world market.

    http://www.lragir.am/index/eng/0/comments/view/33140#sthash.3h5hx0uN.dpuf


    From: Baghdasarian
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