Russia will not be saved by the availability of resources/Segodnya.ua
The resource curse creates state structures, but also causes long-term damage. Read an adaptation of an analysis by a professor at one of Germany's most prestigious research institutions about the economic features of Russia's policies and the consequences.
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Behind the murderous war in Ukraine, provoked by Vladimir Putin, deep economic and social conflicts lurk, emeritus professor and former director of the Department of Labor Market and Employment Policy at the Berlin Research Center for Social Research Günther Schmid.
Giving the Russian president an unambiguous understanding – including by military means – that the war must be ended quickly is one side of the coin, and, of course, , the most relevant now, – says the professor
But another, and no less relevant, is the need for a global reorganization of trade relations.
The example of Africa
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Many countries in Africa, primarily Nigeria, are exemplary models. Their huge reserves of valuable raw materials (for example, oil, gas, gold) contribute to the creation of economic monostructures.
The revenues from these resources are usually monopolized and make governments corrupt. In Russia, this is about the same as the Russian economic historian Alexander Etkind explained and assessed in political economic terms: “The huge revenues of state-controlled corporations from oil and gas resources mean that a significant part of the state budget does not depend on citizens' tax deductions.”
These incomes, in turn, are unstable, as they depend on the price in the world market; for citizens they are opaque and secret. Thus, the elite can enrich themselves at the expense of oil revenues. Low labor intensity makes the oil and gas states largely independent of the population.
Land of men
The exploitation of mineral resources – along with the defense industry – is an economic sector with the strongest gender inequality.
To one percent of the population employed in the oil and gas industry, you need to add another five percent protected by pipelines and cash flows of oligarchs. Almost all soldiers, officers and guards are men. To these oil and gas machos must be added a large group of lawyers; in Russia, this is one percent of the population, four times more than in Germany, who are not busy creating productive capital on behalf of the state, but protecting banks and pipelines, protecting borders from enemies and protecting the elite from the population.
This is a resource the curse not only creates state structures, but also causes long-term damage to competitiveness.
Over the past two decades, Russia's economic and social development has lagged far behind that of the “West” (with the exception of a few Asian countries). Russia is under the threat of becoming a developing country (when the standard of living is average, the GDP is lower than that of the highly developed countries of the world – channel 24).
