Russia » Economics

Russia to catch up with America by 2041

At least, this is how our patriots view the situation.

While being supported by high oil prices, Russian economy will continue to grow for at least another 3 years. A number of billionaires in the country will also increase. A recently published New York's survey of Russian economy predicts that in about 35 years Russia will catch up with the United States. Can you believe this?

“You should,” states author of the survey, financial analyst Sylvester Valchak. “ As a Polish man, I have certain preconceived notions about Russia. But there are some things that simply cannot be ignored. I don’t know how it escapes your attention.”
  
-What do you mean?

-I am talking about objective economic indicators. If we are to compare, for instance, GDP growth, balance of payment and trade, current state of the country’s budget, Russia appears ahead on all accounts.

-But this is all due to high oil prices. As soon as the prices go down, the so-called “Russian miracle” will cease to exist…

-Until 2007 oil will not go down in price drastically. This does not have anything to do with the Middle Eastern conflict. Today, demand for oil surpasses offers. China, for instance, in order to maintain its rapid economic growth, needs plenty of oil. Due to the absence of energy-conserving technologies needed to produce goods for a sum of $1 it needs to consume 3-4 times more energy than America.

It is doubtful that Saudi Arabia alone will be able to satisfy the existing demand. Besides, this is a very unstable country. Terrorist acts which take place there almost daily is just the beginning. The US will experience problems with Iraq for the next 2-3 years. The North Sea is running out of oil. This year Great Britain will start importing more oil than exporting. In Indonesia such practice is already on the way.

Nowadays, everyone relies on Russia as the main supplier of energy resources. You’ve got stability.
 
-The West calls it “controlled democracy” and criticize Moscow for it.

-Obviously, Russia doesn’t have the kind of democracy that many people here would like to see. But I’ve conversed with some people over in your country. Majority of them said they did not want total democracy. According to them, it is better to have a strong leader who knows exactly what to do for the good of his country. Foreign investors are also inclined out to see Putin as a sign of stability. West was afraid after Khodorkovsky’s arrest. But Putin’s rating has grown since then!

-And “Yukos” shares plunged!

-Temporary. Afterwards, the tendency has changed. Russian securities market is hugely underestimated. The price for those shares will be three times as high by 2006.

-Does it mean that there will be more billionaires?

-Most likely. There is a massive flow of oil money into your country; rouble is strengthening. …Interestingly, everyone always notices the bad in Russia. Take the situation with birth in Russian. Overall, it remains relatively low throughout the country. However, in comparison to 1999, in 22 among 89 regions birthrate has already exceeded mortality rate. Most importantly, one should spot a tendency.

Personal file:
Silvester Valchak—senior analyst of “Divine capital Marketing”; he is involved in a project entitled BRIC. He is also a board member of “Polish $ Slavic Federal Credit Union”.

Engeni Umerenkov

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