The ruble has fallen dramatically against other currencies. The reasons for this drop and the maj... more The ruble has fallen dramatically against other currencies. The reasons for this drop and the major consequences are assessed. Near-term prospects are briefly considered. There are multiple causes and multiple consequences of the ruble's depreciation but the causal chain oil price-exchange rate-inflation stands out. The ruble will stabilise. O n 18 February, 2015, the business newspaper Vedomosti gave the following current quotations for the ruble: 62.40 rubles to the US dollar and 71.08 rubles to the euro. The average rates in February 2014 were 35.22 and 48.06, respectively. 1 The Russian currency, in other words, had almost halved in value against the world's leading reserve currency, the US dollar, and fallen by almost as much against the euro, in the course of a year. Why? What are the consequences? What are the prospects for the near term? Those are the questions that I shall try to shed some light on in this article.
The proposition that the Soviet economic system is the source of major constraints on Soviet tech... more The proposition that the Soviet economic system is the source of major constraints on Soviet technological performance is not the sort of proposition that lends itself to rigorous hypothesis-testing. Even comparisons of substantial numbers of different nations with differing economic systems are unhelpful so long as national ‘technological performance’ itself eludes reliable measurement. And other influences — cultural, historical and political (e.g., limited contacts with advanced capitalist countries), and those stemming from policies rather than system, — are also of a scarcely quantifiable kind. Moreover, the Soviet system is not without certain built-in advantages, compared with a capitalistic market economy, when it comes to innovation.
The COVID-19 pandemic has already disrupted large swathes of the global economy, threatening the ... more The COVID-19 pandemic has already disrupted large swathes of the global economy, threatening the growth models of major oil and gas producer countries like Russia. A collapse in oil prices, triggered by the pandemic, once again exposed Russia's enduring susceptibility to sharp falls in oil and gas prices. We argue that this decline in oil prices came at a time when tectonic shifts in global energy markets had already threatened to reduce the value of future oil and gas revenues. These structural changes were accelerated by the collapse in demand caused by the pandemic. Because the Russian leadership had done little to address the threat posed by the emergence of a new energy order, the economy remained highly dependent on oil and gas sales as the primary source of growth. While measures undertaken since 2014 to reduce the government's fiscal dependence on high oil prices will help Russia avoid a worst-case outcome of a fiscal or financial crisis, the dependence of other branches of the economy on the energy sector remains high. This has left Russia set once again to experience a deeper recession than that forecast for other energy exporting economies.
Property rights in the new phase of economic reforms in the Soviet Union are reviewed and analyze... more Property rights in the new phase of economic reforms in the Soviet Union are reviewed and analyzed by a prominent British economist. The paper details laws and decrees on leasing, land, inventions, joint-stock companies, securities, hard currencies, markets, small business, a state holding company, foreign investment, banking, taxation, monopolies, as well as on property ownership and business units in general. The main federal measures are then compared with relevant provisions in the so-called Shatalin Plan. Included in the effort is a section on terminology pertaining to destatization as well as an assessment of the process of privatization as of early December 1990. Journal of Economic Literature, Classification Numbers: 052, 124, 612.
n his article on fragmentation of authority, Vladimir Brovkin reviews the general character of go... more n his article on fragmentation of authority, Vladimir Brovkin reviews the general character of government and property relations in contemporary Russia and draws some strong conclusions. If his conclusions are correct, the prospects for the Russian economy are poor. In this note, I shall review some of the governance issues that bear on Russian economic prospects and offer not a Panglossian view that all will be well, but an assessment of what developments in the practice of government, corporate governance, and property rights would improve economic prospects. These developments are in my judgment possible, but they are by no means certain to occur in the next few years. The main point I want to make is that national and corporate governance are indeed weak in Russia, and property rights still are dangerously blurred, but the situation is not static. Changes are going on, many of them favorable to future economic growth. The Bleak View of Government and Governance in Russia After reviewing a wide range of developments in Yeltsin's Russia, Brovkin arrives at the following conclusions (which I paraphrase):
... state. Page 5. PHILIP HANSON 425 legislation ... flows. And it is worth noting that estimated... more ... state. Page 5. PHILIP HANSON 425 legislation ... flows. And it is worth noting that estimated capital flight has been consistently high in the period in question, while foreign borrowing by Russian companies has been growing fast. If ...
Russian economic policy-makers are taking an optimistic view of Russia’s future. After nine years... more Russian economic policy-makers are taking an optimistic view of Russia’s future. After nine years of GDP growth at an average rate of 7.0 percent per annum, this is understandable. My aim in this article is to offer an assessment of their vision of the future. The question to be addressed is whether a continuation of state-led and oil-fuelled growth, even if the official strategy is to diversify the economy, is likely to produce the strong growth that is anticipated.
The ruble has fallen dramatically against other currencies. The reasons for this drop and the maj... more The ruble has fallen dramatically against other currencies. The reasons for this drop and the major consequences are assessed. Near-term prospects are briefly considered. There are multiple causes and multiple consequences of the ruble's depreciation but the causal chain oil price-exchange rate-inflation stands out. The ruble will stabilise. O n 18 February, 2015, the business newspaper Vedomosti gave the following current quotations for the ruble: 62.40 rubles to the US dollar and 71.08 rubles to the euro. The average rates in February 2014 were 35.22 and 48.06, respectively. 1 The Russian currency, in other words, had almost halved in value against the world's leading reserve currency, the US dollar, and fallen by almost as much against the euro, in the course of a year. Why? What are the consequences? What are the prospects for the near term? Those are the questions that I shall try to shed some light on in this article.
The proposition that the Soviet economic system is the source of major constraints on Soviet tech... more The proposition that the Soviet economic system is the source of major constraints on Soviet technological performance is not the sort of proposition that lends itself to rigorous hypothesis-testing. Even comparisons of substantial numbers of different nations with differing economic systems are unhelpful so long as national ‘technological performance’ itself eludes reliable measurement. And other influences — cultural, historical and political (e.g., limited contacts with advanced capitalist countries), and those stemming from policies rather than system, — are also of a scarcely quantifiable kind. Moreover, the Soviet system is not without certain built-in advantages, compared with a capitalistic market economy, when it comes to innovation.
The COVID-19 pandemic has already disrupted large swathes of the global economy, threatening the ... more The COVID-19 pandemic has already disrupted large swathes of the global economy, threatening the growth models of major oil and gas producer countries like Russia. A collapse in oil prices, triggered by the pandemic, once again exposed Russia's enduring susceptibility to sharp falls in oil and gas prices. We argue that this decline in oil prices came at a time when tectonic shifts in global energy markets had already threatened to reduce the value of future oil and gas revenues. These structural changes were accelerated by the collapse in demand caused by the pandemic. Because the Russian leadership had done little to address the threat posed by the emergence of a new energy order, the economy remained highly dependent on oil and gas sales as the primary source of growth. While measures undertaken since 2014 to reduce the government's fiscal dependence on high oil prices will help Russia avoid a worst-case outcome of a fiscal or financial crisis, the dependence of other branches of the economy on the energy sector remains high. This has left Russia set once again to experience a deeper recession than that forecast for other energy exporting economies.
Property rights in the new phase of economic reforms in the Soviet Union are reviewed and analyze... more Property rights in the new phase of economic reforms in the Soviet Union are reviewed and analyzed by a prominent British economist. The paper details laws and decrees on leasing, land, inventions, joint-stock companies, securities, hard currencies, markets, small business, a state holding company, foreign investment, banking, taxation, monopolies, as well as on property ownership and business units in general. The main federal measures are then compared with relevant provisions in the so-called Shatalin Plan. Included in the effort is a section on terminology pertaining to destatization as well as an assessment of the process of privatization as of early December 1990. Journal of Economic Literature, Classification Numbers: 052, 124, 612.
n his article on fragmentation of authority, Vladimir Brovkin reviews the general character of go... more n his article on fragmentation of authority, Vladimir Brovkin reviews the general character of government and property relations in contemporary Russia and draws some strong conclusions. If his conclusions are correct, the prospects for the Russian economy are poor. In this note, I shall review some of the governance issues that bear on Russian economic prospects and offer not a Panglossian view that all will be well, but an assessment of what developments in the practice of government, corporate governance, and property rights would improve economic prospects. These developments are in my judgment possible, but they are by no means certain to occur in the next few years. The main point I want to make is that national and corporate governance are indeed weak in Russia, and property rights still are dangerously blurred, but the situation is not static. Changes are going on, many of them favorable to future economic growth. The Bleak View of Government and Governance in Russia After reviewing a wide range of developments in Yeltsin's Russia, Brovkin arrives at the following conclusions (which I paraphrase):
... state. Page 5. PHILIP HANSON 425 legislation ... flows. And it is worth noting that estimated... more ... state. Page 5. PHILIP HANSON 425 legislation ... flows. And it is worth noting that estimated capital flight has been consistently high in the period in question, while foreign borrowing by Russian companies has been growing fast. If ...
Russian economic policy-makers are taking an optimistic view of Russia’s future. After nine years... more Russian economic policy-makers are taking an optimistic view of Russia’s future. After nine years of GDP growth at an average rate of 7.0 percent per annum, this is understandable. My aim in this article is to offer an assessment of their vision of the future. The question to be addressed is whether a continuation of state-led and oil-fuelled growth, even if the official strategy is to diversify the economy, is likely to produce the strong growth that is anticipated.
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