Russian Economy

~ Clarissa

The Russian rouble held steady for years at about 30-33 roubles to a dollar.
Last week, it started plummeting and yesterday we saw it go down to 80 roubles per dollar.

The collapse of the rouble has to do with a single thing: the oil prices have gone down.

Russia has no economy. The whole country is not really a country. It is,  rather, a corporation that sells oil. Everything else exists as long as oil is sold and fetches a decent price. No effort has been made to diversify the country’s economy. This is why Russia is so beholden to the oil price fluctuations.

Oil prices do tend to fluctuate. This isn’t a conspiracy or a result of any “sanctions.” It just happens. For the past 10 years,  as the oil prices held steadily high, analysts in Russia kept warning about the problematic nature of such an economy.

Of course, it makes me happy to stare at the charts where the sad trajectory of the rouble can be admired. But let’s not kid ourselves: this doesn’t really matter. This is a small distracting blip that doesn’t change the big picture.

And if Putin stops being the leader of Russia,  that will also be a tiny, insignificant blip. There are crowds more where he came from.

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Published by Clarissa

18 thoughts on “Russian Economy”

  1. You asked earlier why no one knew about the Russian planes flying so close to the the Swedish/Danish passenger planes, apparently the information was just released by the Swedish Military.
    A Danish journalist asked the Russian Ambassador why the Russians are flying like this, apparently it’s because Nato sends planes into Russian airspace and acts very agressively in the Baltics. Oh and actually the Swedes are wrong, the planes were not near colliding and the Swedes have no evidence and are probably high anyhow, Russia would never behave agressively.
    http://www.b.dk/globalt/ambassadoer-jeg-er-bange-for-at-svenskerne-meget-ofte-besoeger-pusherstreet
    It’s like the ambassador is living in an entirely different world than the rest of us.

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        1. Yep, we had them too. Many of them were adapted to Romanian circumstances (“Q: Can a woman give birth twice in a year? A: Yes, this can happen. Q: What about thrice? A: No, comrade Ceausescu”), but the one that the ambassador was telling was probably known all across Eastern Europe.

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          1. It is only now I’m realizing that other Eastern Europeans weren’t aliens from other galaxies but actually had a lot in common with us. We were extraordinarily ignorant about the rest of Eastern Europe back in the USSR.

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            1. “It is only now I’m realizing that other Eastern Europeans weren’t aliens from other galaxies but actually had a lot in common with us. We were extraordinarily ignorant about the rest of Eastern Europe back in the USSR.”

              Whaaaat? I heard that you in the USSR were our best friends, and were burned with desire to lead us to the heaven of communism.

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              1. “Whaaaat? I heard that you in the USSR were our best friends, and were burned with desire to lead us to the heaven of communism.”

                • All we knew was that you, folks, lived much better than we did, so we seethed with a vague resentment. I remember when a group of Polish and a group of British students came to my school back in 1989, everybody hated the Polish students before even seeing them and loved the British students. The Poles did turn out to be quite rude and obnoxious as compared to the very quiet and excruciatingly polite Brits. 🙂

                Our image of Hungary was that it was very prosperous in those times.

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              2. The communication generally worked only one way. In the DDR (East Germany) there were lots of monuments to German-Soviet friendship. In the USSR there were none. The only exception I can think of is that in Bishkek there are some small plaques to the communist volunteers from Czechoslovakia that came there in the 1920s to help build communism. One of the volunteers was the father of Alexander Dubcek.

                http://www.mzv.sk/servlet/astanazu?MT=/App/WCM/ZU/AstanaZU/main.nsf/vw_ByID/ID_621F5291AE4A5FD4C125715B004FFE51_EN&OpenDocument=Y&LANG=EN&HM=50-galermedii&NCH=Y&DS=Y&TG=BlankMaster&URL=/App/WCM/ZU/AstanaZU/main.nsf/vw_ByID/ID_10BF536D184DB053C1257A8000462621

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      1. You’re welcome!
        I am at work right now and just found this on YouTube (slacking, you see…). I have no Idea what is being said/written in this video, but I find it incredible hilarious.

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        1. A short resume: “Yes, there are problems. But there are also huge successes. “We have defended out values for hundreds of years and will continue to do so,” Putin says in the culmination to the video.”

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    2. Well, compared to the USSR it was actually quite prosperous. Compared to other (non-communist) European countries not that much. Which perfectly shows how deep the issues of USSR were.

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  3. —And if Putin stops being the leader of Russia, that will also be a tiny, insignificant blip. There are crowds more where he came from.

    Yes, unfortunately, and when the oil prices get back up, it will all repeat again. For some odd reason, two of my former classmates living in Russia initiated contact with me recently, with questions like “how is life”. Both had all kinds of pro-Russia anti-Ukrainian and anti-Western demotivators on their pages, but I hoped to just talk about life with them. Just a former classmate thing… One did not have to say much actually. The other, however, started to chastise me for betraying the homeland by moving to Canada in search of a better life (that coming from a chief of a private security company in Moscow 🙂 🙂 ). I feigned surprise (I actually knew he was from Ukraine) at learning that he was actually born in Moscow, where he lives now. You know what I got in response? – no I was born in Kharkiv, which is part of the Russian empire (so, unlike myself, the guy is proud to never have emigrated from the Russian Empire)

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    1. “Yes, unfortunately, and when the oil prices get back up, it will all repeat again.”

      • Yep. Wow, do we finally agree? 🙂

      “The other, however, started to chastise me for betraying the homeland by moving to Canada in search of a better life”

      • This is just sad. The guy sought you out on purpose to unload these valuable thoughts? Things must be going badly.

      “You know what I got in response? – no I was born in Kharkiv, which is part of the Russian empire (so, unlike myself, the guy is proud to never have emigrated from the Russian Empire)”

      • And this is why I never talk to former classmates.

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      1. —his is just sad. The guy sought you out on purpose to unload these valuable thoughts? Things must be going badly.

        This happened about two months ago when the exchange rate was still 1:35. But I am sure now he believes that the fascist American world government committed an act of economic aggression against Russia and this heinous act should be avenged… 😦

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