The CEO of Russia’s biggest bank, the state owned Sberbank, German Gref delivered a scathing criticism of the country’s economy at an economic forum in Moscow 15th January. According to Gref, the biggest trend in the world economy is the “end of the hydrocarbon era”. He willingly shares the belief peddled in the Western media that Russia has foolishly relied on an economic model based on export of oil and gas while neglecting to develop its industry and modern sectors of the economy. Russia is thus doomed, Gref points out, to rank among the “downshifter countries” shedding their wealth as the oil money drains.
Strange enough, Gref contends that the dramatic fall in the price of oil is due to the “radical changes in global energy consumption patterns.” Obviously, no coherent analysis of the problem and its possible solutions can follow from such faulty premises. The drop in the oil price has certainly not been caused by any shifts to alternative energy sources and it is dubious if there has been a decrease in consumption at all beyond the effect of the overall downturn in the world economy. In reality, the sharp fall in the oil price reflects this global downturn, coupled with the over-supply caused by North American speculative investment in new oil wells fueled by zero-financing lending to super risky, and the sanctions trade wars…Awara Blog
German Gref is wrong about Russian economy
John Hellevig
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