Russia’s Oil and Natural Gas

"Partly, yes. People might want to look at it even if they’re not studying economics. It’s the best book dealing with the problem of oil and natural gas. If you think – and I do – that there has been a re-balancing of the state and private capital in Russia, what the re-balancing has been about is oil and gas resources. The biggest fight between Putin and the oligarchs was that between Putin and Khodorkovsky, which Putin won very clearly. Khodorkovsky has now received a second jail sentence, which is clearly punitive and retributive and nothing to do with justice. It’s the oil and gas resources that the fight was over – state ownership of those resources and the tax revenues received. What this book talks about is whether those resources have made Russia better, not only for its ruling elite but for the people as a whole. It’s written in economic language, but it’s such an important question if people are going to understand what’s going on in Russia today. I think the fact that it is a debate incorporating different points of view makes it the best thing to read on that aspect of Russia. There are three short answers. For the elite – both money people and power people (the private capitalists have by no means gone away) – the rising price of oil which continued right up to 2008 has been an enormous asset, and provided resources that could have been used to modernise the economy and take the next economic step. There were a lot of conversations about that but not a lot of progress. Then there was the economic crisis of 2008, which was not of Russia’s making, but the opportunity was lost. The second point is that for Russia’s population it was a double-edged sword. Most Russian families will tell you that their living standards went up during the 2000s and they pulled away from the 90s disaster. That was a fantastic thing. It was partly due to the side-effects of the oil economy, but the problem was that the opportunity to diversify away and make the economy more than just an oil and gas economy was lost, and the people paying the price for that now are the ordinary people of Russia, not the people who run the country. The final sense in which it was not good is that while the average living standard has increased, inequality widened and some people at the bottom of the scale – single-parent families, poor working families – have got poorer and poorer, and some regions, some poor republics have also been left out."