Kudrin Promises the End of Oil
The New York Times has some choice morsels from its interview with Finance Minister Alexei Kudrin, who it refers to as ‘the third most powerful figure in the Kremlin‘. Not a whole lot here is new, although his comments on oil production over the next decade are striking insofar as he says that Russia’s ability to rescue its economy by ramping up production is coming to an end. He also says that, as diversification of the economy is now already in process and inevitable, what’s really needed now is for Russia to focus on making its judicial system credible. Fine words from the third-in-command…but categorically phantasmic, at this point.
Here’s Kudrin:
Very acute problems have arisen in the economy. Not everybody has understood this completely. In the next 10 years Russia will not have an increase in oil production. In principle, oil production will not increase. It is because the old oil fields will end their existence. They will cease to exist, and though new ones will be opened, they will have a hard task to compensate for the volume of production at the old fields. With very big investments into the oil industry in future years, especially in eastern Siberia, we will be able to compensate for the completion of production and other oil fields. This is why growth in oil production will stop for the next 10 years. The great part of the economy, about 17 percent, will not grow. I mean 17 percent of G.D.P. In order for Russian economy to grow at 6 or more percent, it is necessary for all the rest of the economy to grow even faster. And in order for it to grow faster very understandable rules are needed. Understandable institutions. A good judicial system, so that everyone will be sure in his investments, in fair arbitration and courts, in very efficient work of the government and its administration of all federal bodies and its authority. We won’t be able to grow the economy by simply increasing oil production anymore.
Read the interview here.
Share
