they have an economy with a soft under belly, case in point their brief War with Georgia led to capital flight and the financial sector took a hit. There have also been speculations that they cannot wage a prolonged war in Syria like the ones the Americans did in Iraq and Afghanistan. This shows that modernizing the armed forces alone will not get them out of the doldrums. Putin will do the economy good by allowing a vibrant private sector to thrive, however, he has abetted Oligarchy at the expense of a vibrant rule of law driven private economy. Case in point the Jailing of Khordovsky whose arrest warrant was issued again last week after he had been out of jail for some time.
1 Like
There is a price point where they won’t be able to compete, frackers who bad huge debts wengine wameanza ku file for bankruptcy
2 Likes
Diversifying sources of revenue means taxing the citizenry, I think it has the same effect as withdrawing subsidies
Good thing is their contracts mandate them to continue the exploration or else their leases can be withdrawn so they can slowdown but not abandon site. When prices eventually go up, tutauza mafuta. Good thing the cost of oil production in Kenya will be btw. US $20-30 per barrel, meaning if we were producing at the moment, bado tungekuwa kwa faida.
The chart above was produced by goldman Sachs last December, now move the red line to under US $40 per barrel
3 Likes
hehe very straightforward and easy to understand graph
Basi Kenyans are a lucky lot hope this opportunity does not pass us by, a second chance to make a first impression kind of situation.
Ok, but it would be wiser to go for more productive sources. The country is well cushioned by cash reserves and does not necessarily have to go for short term sources that might cause disquiet within the masses. They should put in mid-term and long term strategies such as manufacturing industrial and chemical goods, they could also use their surplus wisely for investment within the Kingdom and not in the US so to ensure there is employment and alternative wealth creation. For example the Saudi’s can invest in commercialized agriculture in Africa to provide raw materials for agri-processing companies in the kingdom…
2 Likes
I think most Russians, rather than comparing their economic situation with that of western countries, instead make comparisons with the Soviet and (later) disastrous Yeltsin years. In that regard, Putin has been massively successful in improving the economy of Russia. Even the Georgian war and Crimean annexation have been used by the Kremlin to instill a new sense of nationalism in Russians. The many oil and gas companies that have been nationalized have been integrated into either Rosneft or Gazprom, two companies that have been used to shape Russia’s foreign policy. Furthermore, Russians now view Putin as a kind of warrior who is fighting an enemy (NATO) that is hell bent on surrounding and (possibly) harming them. What the west looks at as Russia’s shortcomings/failure on the international scene is easily translated into a win for the government on the domestic front.
As for the oligarchs, I don’t think they’re entirely blameless. They got Russia’s most prized assets for pennies on the dollar. Most of them were small time businessmen (criminals, depending on who you ask), who happened to be strategically positioned for the windfall that came with the collapse of the Soviet union. When Putin took over, he made an agreement with them that they would be left alone so long as they didn’t use their billions to interfere in the political scene. Obviously Khordokovsky thought the rules didn’t apply to him. I’m not saying I support Russian government tactics, what I mean is if you take a gamble then you should be prepared to accept a loss.
9 Likes
clap clap clap
2 Likes
Gold, very analytical read!
2 Likes
Good… I will quote this/you somewhere!
1 Like