By DemocracyRules
Cross-posted at Kommersant.ru
MOSCOW (Associated Press) – Poor little Russia would come under crippling financial pressure and may need to raise money externally if oil languishes at an average of $30 a barrel over the next two years, the World Bank predicted Friday. This is terrible news for mother Russia and the other fine upstanding oil tyrannies.
World Bank officials, who left early on Friday to do some Christmas shopping, were looking pretty grim. “Merry Christmas”, said one, who passed by a noted and very famous Associated Press reporter who was standing nearby.
The Associated Press reporter, who has a nice elegant figure, a beautiful profile and a cute button nose, was wearing a sleek new hairstyle and lingering around in front of the World Bank Offices. She was planning to do a story about Russia, her favorite failed Communist state.
The bleak Russian scenario would mark a rapid unraveling of Russia's oil-fueled economic gains over the past eight years, during which time the government has paid down most of its foreign debt, built up a vast stockpile of international reserves, and has undertaken a huge program to export its low quality weapons systems to any dictator who will pay cash.
"If oil prices in 2009 and 2010 average $30 a barrel, that would be a nightmare scenario for a global economy," Zeljko Bogetic, the World Bank's chief economist in Russia told investors on Friday."
Bogetic, who is named after a very small car that Russian clowns ride in, said, "The pressures on the current account and public finances in Russia would quickly rise to a point where the financing constraint would become so sharp that it's possible even to envisage Russia's return from a creditor to international organizations to (that of) a borrower." Ouch.
Zeljko Bogetic’s colleague, Gudanov IsNeverGudanov agreed. He said it would be terrible if mighty Russia and Middle-Eastern tyrannies melted down while the free-market democracies prospered from low energy prices.
At $50 a barrel, Russia could drain much of its reserve funds and run budgetary deficits, but would not face a "meltdown" scenario, said Bogetic. “But this, this is terrible, it’s worse than vodka made from gasoline distillates.” He looked more depressed than he did just after he finished “Crime and Punishment.” “This could threaten the Russian capacity to be an international bully, to secretly fund Islamist organizations, to keep thousands of spies in America, and to struggle at every opportunity to destroy the USA...” he stammered on.
Oil prices took a sharp turn downward this week, with the February light sweet crude contract trading just over $42 a barrel—more than $100 lower than its July peak—despite a large output cut pledged this week by oil producers' cartel OPEC. Of course, the OPEC members are all cheating furiously on their quotas, so there is no real decline in supply. But still, I wanted to put that in, because the editor said he wanted a longer piece.
Some major oil-importing countries have criticized OPEC's move to push up prices during a global slowdown. I have not idea why. I ride the subway myself.
The World Bank currently forecasts an average oil price of $75 a barrel over the next two years, said Bogetic. Bogotec marveled at how the forecast could be so wrong. Especially since he wrote it himself.
Among emerging markets, Russia has been one of the hardest hit by the global financial crisis and plunging oil prices, the mainstay of the Russian economy. These factors have put the national currency under intense strain and triggered massive stock market losses and capital flight from the country (some capital also goes by train or car).
The situation has also caused massive human outflows, with Russian internet brides now trading at three for a dollar. A former Prime Minister of Russia was spotted recently in a London restaurant washing dishes. Not all Russians are flowing out in all directions. The brain drain used to be a problem, but with horrendous alcoholism there are fewer and fewer brains worth draining. However train outflows remain a problem, and these are called train drain.
Russia, according to the ever-truthful economics ministry, grew at over 8 percent last year. But now it is facing a severe slowdown in growth, and possibly even recession next year, analysts say. Torrid figures released earlier this week showed that industrial output had plunged 10.8 percent in November from the previous month, signaling a dramatic slowdown in the final quarter, which could carry into the next quarter, or perhaps into the next century.
"Clearly we are in the middle of a major growth recession in Russia," said Bogetic. "I would call it a growth recession, not an output recession—yet." When your majestic reporter asked him how the catastrophic output declines in November are not an "output recession", Bogetic called your reporter “anti-Russian,” a comment which hurt deeply, given your reporter’s abiding love for Stalin.
Bogetic said the World Bank had ‘tweaked’ its earlier projection of 3 percent growth next year to between 2-3 percent, which he said was a very difficult estimate to make, given that many Russians are now fighting over potatoes. “It’s true that some negative growth has been observed,” he conceded. “Would you like to buy some armaments?”
Pro Patria
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Posted by: Russian Brides | February 11, 2009 at 03:29 AM