Gazprom CEO Alexei Miller next to President Putin
The Canadian Broadcasting Corporation (CBC) is reporting some big numbers in their story about Russia's oil and gas boom today. According to the CBC article, Russian oil and gas companies are raking in "$550,000,000 every day, or $380,000 every minute, around the clock. The state gets 65 per cent of that. Oil and gas exports account for about 60 per cent of federal budget revenues and 60 per cent of its exports."
What is more interesting than these raw numbers though is what the Kremlin is doing with the windfall.
Russian Finance Minister Alexei Kudrin speaking on NTB TV
The government is busy funnelling oil companies' profits above $27 per barrel into an inflation-fighting stabilization fund, which as of the end of June stood at $76 billion. This year it will use $22 billion of that to pay down all of its remaining debts to the Paris Club of creditor countries. That's a far cry from the years when it could scarcely make the interest payments on its foreign borrowings.
A considerable portion of this Russian stabilization fund is invested in the U.S. economy. While financial analysts seem to understand the growing interdependence between the U.S. and Chinese economies, Russia's more modest overseas holdings receive far less attention. Nonetheless, these assets are growing rapidly, and the question is: will Russians keep putting their money in the U.S. - or seek higher returns in developing economies like India or China?
Thought you might want to read/blog about this story from National Journal: Putin's Russia.
Also, will you be covering the meeting of the G8 in St. Petersburg?