Re: Why did the USSR fall?

["Chris Doss" <nomorebounces@xxxxxxx>]

James Devine wrote:
>
> Dependent countries can escape dependency (or at least its effects) if they have a highly-priced export item. But if oil goes away (i.e., if prices fall back to 1980s levels), the Russian economy would be in Big Trouble, since there's not much else to export. (Used nukes anyone?)

I write:

Now that you mention nukes, Russia is the world's No. 2 arms exporter. (PS how can you have a "used nuke"? :) ) Sukhoi makes probably the best fighter planes in the world, and MiG is nothing to sneeze at either.

There is no question that oil exports are important to the Russian economy, but they are hardly the only factor. The main contributor to the federal budget is actually Gazprom, much exports (surprise) gas (something like half of the EU's gas comes via Gazprom). Russia also exports large amounts of timber, diamonds (ALROSA is the world's second-largest diamond company after De Beer's, I believe), and other natural resources (Norilsk Nickel being the world's largets nickel company). Obviously, though, exclusive reliance on natural resource exports is not the way to go in the longterm. (Interestingly, high oil prices had no such effect on the economy when they were high in 95-96. I personally think much of the economic rebound is the result of the devaluation of the ruble and political stablization of the country, not external factors.)

IMHO, if Russia breaks out of the Dutch Elm disease trap, it will be via high-tech, which is growing in Russia very rapidly, not surprisngly considering the technical expertise of the workforce. (Many Samsung products were actually designed by Russian technicians -- they have a sizeable Moscow office. A lot of Korean businesses do similar work in Russia.). Kaspersky Labs is the main domestic software company. If memory serves, which it may not be doing, Russia is the No. 1 source for IT outsourcing after India, Israel, and Ireland.



>
> It's very rare for a dependent mono-export country to use its bonanzas to develop economically.

Russia's not mono-export -- see above.

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It's only when left-wing nationalists such as Peron or Venezuela's Chavez decide to shake things up (under the pressure from the workers and peasants) that we see any move in that direction. And often opportunites are wasted.
>
> Jim D.

I think a notable difference between the examples you use and Russia -- correct me if I am wrong, for I am no expert on Latin America by any means -- is that, as far as I know, Argentina and Venezuela have relatively large elites committed to the status quo. The only people interested in the status quo in Russia are a few billionaires, who have either been exiled, jailed, or intimidated. The powers-that-be in the Kremlin are KGB people with a KGB mindset and KGB worldview (which is not neccessarily bad), not a comprador class, if I am using that term correctly. (I don't speak Marxism-Leninese.) They are etatist in ideology and rent-seekers in terms of livelihood.