The Russian economy is like a horse and cart planned to be converted to a car, argues the liberal analyst Kirill Rogov in the Moscow Times.
By adding mirrors, rear wheels, metallic paint and air-conditioning, the reformer can quickly claim to have achieved 35 per cent of the plan. At a time of low oil and gas prices, the programme for the St Petersburg Economic Forum laid out a vision of such remodelling.
The forum’s programme betrayed Russia’s preoccupations, reminiscent of similar proclamations in the Arabian Gulf. Panels praised innovation, human capital, entrepreneurship and the next industrial revolution. Russia reached out to Europe, talked of a “100-year partnership” with the United Kingdom and tried to build ties with areas as diverse as Latin America, Japan and Bangladesh.
Russia is by far the world’s biggest exporter of gas, the second-largest exporter of oil and the third-largest exporter of coal, along with uranium, diamonds, metals and timber.
The economic liberal Alexei Kudrin, recently brought back by president Vladimir Putin to draft a new economic strategy, has for a second time the job of remodelling the horse and cart.
The political system and economy are built on distributing resource revenue, but the Kremlin can no longer rely on them for growth.
Oil prices have rebounded this year but remain relatively low. The next generation of more difficult fields, the offshore Arctic and shale resources in West Siberia, is rendered harder by western sanctions on technology.
Gas consumption in Europe, still Russia’s key market, is down almost 20 per cent since 2010. The liquefied natural gas plant on the windswept Yamal Peninsula is expected to start up next year, but enters a glutted market. Tensions with Turkey have undermined plans for a new gas route into south-east Europe.
Russia has begun reorienting energy exports east. But its deal to send gas to China, announced with fanfare in May 2014, is at best only half as lucrative as European exports, and has made little apparent headway.
The seriousness of these problems should not detract from the great strengths of the Russian energy industry.
Its huge fossil fuel resources are, if not as cheap as Middle Eastern oil and gas to extract, still low-cost on the global scale. Existing oilfields are increasingly mature, but Russian companies have done well to keep nudging up output.
Devaluation of the rouble has kept production costs down, while the tax system casts most of the pain of low prices on the state budget – though the finance ministry has cast its beady eye on oil companies' profit.
The country retains enviable skills in science and engineering, its oil services firms able to fill in some of the gaps created by sanctions, as well as generating valuable exports.
Despite continuing political confrontations, western and Middle Eastern businesses remain enticed by Russia’s obvious potential, with Russian attempts to woo Italy to undermine European sanctions.
In 2008, Bob Dudley, running BP’s Russian subsidiary, was forced out of the country, a move he blamed on Igor Sechin, the boss of the state oil behemoth Rosneft. Now BP’s chief, Mr Dudley was back at this summit to team up with Rosneft to explore the virgin lands of East Siberia.
As in Saudi Arabia, privatisation is in the air. Having seized the mid-size oil company Bashneft in 2014 and added TNK, the inheritor of BP’s joint venture, to Rosneft, the government is now planning to sell stakes in both, perhaps to Italian as well as Chinese and Indian companies.
Yet corruption and the state’s over-heavy hand remain a dead weight on sustainable economic growth. At the forum, Mr Kudrin said, “The entire world has turned into a lab to generate innovations”. If his reforms are to be more than a paint job, innovation has eventually to transform the Kremlin’s political machine.
Robin Mills is the chief executive of Qamar Energy and the author of The Myth of the Oil Crisis.
business@thenational.ae
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
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MATCH INFO
Uefa Champions League semi-final, first leg
Barcelona v Liverpool, Wednesday, 11pm (UAE).
Second leg
Liverpool v Barcelona, Tuesday, May 7, 11pm
Games on BeIN Sports
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THE SIXTH SENSE
Starring: Bruce Willis, Toni Collette, Hayley Joel Osment
Director: M. Night Shyamalan
Rating: 5/5
Russia's Muslim Heartlands
Dominic Rubin, Oxford
England's all-time record goalscorers:
Wayne Rooney 53
Bobby Charlton 49
Gary Lineker 48
Jimmy Greaves 44
Michael Owen 40
Tom Finney 30
Nat Lofthouse 30
Alan Shearer 30
Viv Woodward 29
Frank Lampard 29
Mohammed bin Zayed Majlis
Why does a queen bee feast only on royal jelly?
Some facts about bees:
The queen bee eats only royal jelly, an extraordinary food created by worker bees so she lives much longer
The life cycle of a worker bee is from 40-60 days
A queen bee lives for 3-5 years
This allows her to lay millions of eggs and allows the continuity of the bee colony
About 20,000 honey bees and one queen populate each hive
Honey is packed with vital vitamins, minerals, enzymes, water and anti-oxidants.
Apart from honey, five other products are royal jelly, the special food bees feed their queen
Pollen is their protein source, a super food that is nutritious, rich in amino acids
Beewax is used to construct the combs. Due to its anti-fungal, anti-bacterial elements, it is used in skin treatments
Propolis, a resin-like material produced by bees is used to make hives. It has natural antibiotic qualities so works to sterilize hive, protects from disease, keeps their home free from germs. Also used to treat sores, infection, warts
Bee venom is used by bees to protect themselves. Has anti-inflammatory properties, sometimes used to relieve conditions such as rheumatoid arthritis, nerve and muscle pain
Honey, royal jelly, pollen have health enhancing qualities
The other three products are used for therapeutic purposes
Is beekeeping dangerous?
As long as you deal with bees gently, you will be safe, says Mohammed Al Najeh, who has worked with bees since he was a boy.
“The biggest mistake people make is they panic when they see a bee. They are small but smart creatures. If you move your hand quickly to hit the bees, this is an aggressive action and bees will defend themselves. They can sense the adrenalin in our body. But if we are calm, they are move away.”
Tips from the expert
Dobromir Radichkov, chief data officer at dubizzle and Bayut, offers a few tips for UAE residents looking to earn some cash from pre-loved items.
- Sellers should focus on providing high-quality used goods at attractive prices to buyers.
- It’s important to use clear and appealing photos, with catchy titles and detailed descriptions to capture the attention of prospective buyers.
- Try to advertise a realistic price to attract buyers looking for good deals, especially in the current environment where consumers are significantly more price-sensitive.
- Be creative and look around your home for valuable items that you no longer need but might be useful to others.
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Company%20profile
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COMPANY%20PROFILE
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The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
THE SPECS
Engine: Four-cylinder 2.5-litre
Transmission: Seven-speed auto
Power: 165hp
Torque: 241Nm
Price: Dh99,900 to Dh134,000
On sale: now
COMPANY%20PROFILE%20
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BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5
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