Russia’s gas problem

The BBC offers today an interesting look at Gazprom, Russia’s gas giant. There’s some world-class hyperbole in the piece, including this: Russia is a huge, almost limitless, supplier of gas, and this makes it probably more powerful now than it was during the Cold War.” The premise of the article is that Russia’s oil and ...

By , a professor at Indiana University’s Hamilton Lugar School of Global and International Studies.
607971_Gazprom5.jpg
607971_Gazprom5.jpg

The BBC offers today an interesting look at Gazprom, Russia's gas giant. There's some world-class hyperbole in the piece, including this:

The BBC offers today an interesting look at Gazprom, Russia’s gas giant. There’s some world-class hyperbole in the piece, including this:

Russia is a huge, almost limitless, supplier of gas, and this makes it probably more powerful now than it was during the Cold War.”

The premise of the article is that Russia’s oil and gas reserves generate geopolitical clout. Perhaps in the short term. But it appears just as likely that the warping of the economy caused by reliance on oil and gas profits will undermine Russia’s economic and political transition and ultimately diminish its international profile. Tom Friedman made the case in FP recently that high energy prices hurt freedom. Other prominent Putin critics go much further: they contend that Russia’s economic growth is a fraction of what it should be and that energy windfalls are masking economic stagnation.

Under oil windfall profits, Russia’s GDP should have grown by 15% to 16% in 2005. Once you dismiss the windfall profits, you see a poor quality of the economic policy that has proven negative to the tune of losing some 9% to 10% of the GDP growth.”

When energy prices slide, we’ll get a truer sense of where Russia stands.   

David Bosco is a professor at Indiana University’s Hamilton Lugar School of Global and International Studies. He is the author of The Poseidon Project: The Struggle to Govern the World’s Oceans. Twitter: @multilateralist

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