Predictions a lot. Someone promises the world a new quality after the epidemic. In the list of promised – a new global and new insulation, increased state control and the growth of digitalization. Someone on the contrary believes that the changes will point and the only question is the timing of the rollback to dependenices the status quo.
But any General prediction suffers from the fact that he “shared”. It is possible that each country will go through its sequence of transformations. Drawing on a political tradition, the social contract and the structure of the economy.
For Ukraine it is customary to look into Russia’s future. Aggression and occupation have left Kiev with no other choice – and because the price of oil and gas here sometimes watched no less closely than in Moscow.
The crisis destroys the budget plans of the Kremlin. According to various estimates, the decline in world oil demand in coming months may exceed 20%. In the framework of the agreement with Moscow, OPEC pledged to cut oil production by more than 10%. The problem is that Russia has enough storage capacity – it will have to preserve well. That, in turn, will lead to their loss, either to the quite tangible costs of re-entry in the future.
Gas consumption in Europe also declining: the reduction is from 54% in the North of Italy to 15% in Western Germany. 1 m3 costs the continent about $80, while Russia sells gas to its own regions for $65. The “Gazprom” typeset your annual budget, relying on price of $200.
The Russian ruble is getting cheaper and it is too early to talk about the end of the process. If the Urals oil will cost about $30, the Russian Central Bank to maintain the rate of day will have to sell up to $150 million to the national welfare Fund of Russia has managed to accumulate $123 billion – and with such dynamics, it may be enough to balance the oil prices for two to three years. But what’s next?
The cost of production of Russian oil – $20 (Saudi Arabia – $9). The share of oil in GDP of Russia – 15%. Yes, the Kremlin managed to save $560 billion in foreign reserves, but the whole architecture of the forecasts still does not look optimistic for Russia. External borrowing is limited because of the sanctions. According to forecasts of the head of the accounts chamber of the Russian Federation Alexey Kudrin, the unemployment rate in Russia may increase threefold from 2.5 million to 8 million people.
It is now clear that Russia is behind the rest of the countries included in the economic peak. The situation is complicated by the fact that the share of oil revenues in the structure of Russian budget up to 40%.
The demand for hydrocarbons continues to fall, and their price can decrease. The petrodollars, which begins the career of Vladimir Putin, now starting to fade. And in this moment we find ourselves in the thankless stage – stage forecasts.
Attempts to present the world after the coronavirus sin its versatility. Their authors say about the consequences that will apply to all. But that is a feature that each country postepidemic hangover may be different.
[Blogger] Mikhail Pozharsky wrote that in his time the effect of the bubonic plague differed in different regions of Europe. In the XIV century this disease has taken away a quarter of the population of the continent – and most of the losses were among the peasants. The economy of the middle ages rested on the labor of serfs and therefore the growth of labor demand has led to the fact that the peasants began to demand rights and higher pay.
In England, the king decided at first to refuse them. Issued a Statute, in which were recorded the “old” level of remuneration and prohibited unauthorized transition from feudal Lord to feudal Lord. The answer was the peasant uprising. The largest of which is under the leadership of Wat Tyler, though was suppressed, but led to the cuts. In Eastern Europe things were different. There the local nobility imposed on peasants all the new duties, so that they were in a worse position than before the plague.
In fact, the evolution of each country during the crisis depends on the starting position in the society. Where there is the capacity for collective action, freedom to expand. Where there is no freedom narrowed. It may well be that we will be watching it and now when the reality of the different countries will depend on their social contract and the ability of the “upper” hear “the lower classes”.
As for Russia, its mode of existence remains unchanged. As written, [the philosopher] Merab Mamardashvili, Russia is not for Russian, and through Russian. Oil became cheaper after the annexation of Crimea – and then the role of the new oil was appointed Russian citizens. And there is no special reason to think that this time the Kremlin will decide to do otherwise.
It is possible that Moscow will choose the same vector, which after the plague chose Eastern Europe. When a young person will become even less. The zones become pierced new holes. And in the old social contract “sausage in exchange for political freedom” the decline will be on both sides of the equation.
“Dad, you will drink less? No, son, you’ll eat less”.
Posted with personal permission of the author