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Western analysts are quite complimentary about Russia and its chances

01.01.70

WPS: What the Papers Say, Mar 16
Russias energy and raw materials exporters accumulated vast financial resources in 2004-05. No longer satisfied with low-profit assets, they are on the lookout for new spheres to invest petrodollars. This has already generated a wave of protectionism in the traditional Western economies.
Unlike Western political scientists, analysts in the West regard Russia with renewed hope. Norbert Walter, Deutsche Bank Groups senior economist, lists Russia among nouveau riche countries that he says have grown rich by selling energy to the international community and become extremely aggressive in the Western markets. Russias energy and raw materials exporters accumulated vast financial resources in 2004-05. No longer satisfied with low-profit assets like US Treasury bonds, they are on the lookout for new spheres to invest petrodollars. Direct investment is mushrooming, takeovers (including hostile ones) are becoming more frequent. All this has already generated a wave of protectionism in the traditional Western economies. The nouveaux riches are aware that oil is not going to last as the source of their wealth, hence the attempts on their part to diversify their portfolios, upgrade industry, and build up infrastructure. As far as Walter is concerned, the global economy needs all this fresh blood and the West should accept the challenge rather than try to build a fence around itself.
This is not the only favorable forecast to be heard. Goldman Sachs put Russia on the list of the four fastest-growing markets for 2003. These four countries are known as BRIC (Brazil, Russia, India, China), and the abbreviation is quite fashionable nowadays. According to the latest Goldman Sachs forecast, the Russian GDP will increase more than tenfold by 2050, reaching $55,630 per capita.
A recent report from PriceWaterhouseCoopers also put Russia on the top list this time among six other countries including Brazil, India, China, South Korea, Indonesia, Mexico whose aggregate GDP will exceed that of the G7 by 2050.
In the meantime, where the rate of development is concerned Russia is the last in BRIC and leaves only South Korea behind in PriceWaterhouseCoopers Top Seven. Investors meanwhile become more and more selective considering advisability of investments in this or that economy.
David Fuller, Stockcube Research Director and Fullermoney investment newsletter editor: South America I dont even mention Russia enjoys colossal natural resources. It is the drift to authoritarianism and corruption that I dislike.
Every country has its own risks that may interfere with its development along the ways predicted by specialists. Experts agree that Russias worst problem is rooted in superiority of the state over the law.
In fact, Western specialists flattering estimates are actually offering Moscow an insight into what it should be doing. This is their gist, stripped of fancy terminology: this is what is going to happen as long as you stop relying on oil export alone and get down to innovations, structural reforms, and developing sectors of the national economy other than oil and gas.
New Russian companies are absolutely correct to be aggressive in foreign markets. This is where the role of the state may become of truly unprecedented importance. Restriction of meddling with economy by the state inside the country will stimulate competition and boost Russian companies competitive capacities abroad. Neither will it hurt to concentrate the proverbial administrative resource on dismantling foreign barriers Russian products encounter. This is one of the ways of development, successfully realized by leaders of the developing countries Walter calls the nouveaux riches.
It seems that Russia still needs a push before it will see itself a part of this new global elite. As things stand, an alliance between the state and businesses is only glimpsed sporadically in the attempts to defend the domestic market from foreign competitors. This is exactly what the old Europe is doing in the face of the danger posed by the so-called nouveaux riches.
Translated by A. Ignatkin
Vedomosti, March 16, 2006, pp. A1, A4
THE NOUVEAUX RICHES

Expert opinion

Halter Marek

02.12.06

Halter Marek
Le College de France
Olivier Giscard dEstaing

02.12.06

Olivier Giscard dEstaing
COPAM, France
Mika Ohbayashi

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Mika Ohbayashi
Institute for Sustainable Energy Poliy
Bill Pace

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Bill Pace
World Federalist Movement - Institute for Global Policy
Peter I. Hajnal

01.12.06

Peter I. Hajnal
Toronto University, G8 Research Group