Here is a short video clip from the 2007 World Economic Forum held last month in Davos, Switzerland (the next WEF will be held September 6-8, 2007 in the port of Dalian, China). The topic of the panel discussion was "Modern Russia: Strengths, Challenges and New Prospects - A Perspective from Business". The participants included:
Vladimir Evtushenkov, President and Chief Executive Officer, Sistema JSFC, Russia
Steve Forbes, President and Chief Executive Officer, Forbes, USA
E. Neville Isdell, Chairman and Chief Executive Officer, The Coca-Cola Company, USA
Andrei L. Kostin, Chairman and Chief Executive Officer, Vneshtorbank (VTB) Russian Federation
James S. Turley, Chairman and Chief Executive Officer, Ernst & Young, USA
Lionel Barber, Editor, Financial Times, United Kingdom
Russian First Deputy Prime Minister Dimitri Medvedev
Russian Economic Development and Trade Minister German Gref
Click on the extended post to read what these leaders in global business had to say about modern Russia.
An interview with Ruben Vardanian, CEO of Troika Dialog, one of the largest investment banks in Russia. In this video, Mr. Vardanian talks about the creation of the Skolkovo School of Management, a new elite business school in Moscow
E. Neville Isdell, Chairman and Chief Executive Officer, The Coca-Cola Company:
I think that the progress that has been made by Russia has been absolutely magnificent. We see it in our business, we see it in household disposable income, we see it in the growth of the middle class. People don't understand how fundamentally changed Russia is...however, and we're working on this within the foreign investment advisory council and the U.S.-Russia Business Council...I think that if there has been one failure in terms of Russian business, in terms of the Russian government, it is that they have not always been able to put the right face to the world, and therefore they have been looked at through negative eyes. That is a work in progress, there is more work to be done, shared by those who are invested in major ways as far as foreign companies in Russia, as well as Russia itself...
Andrei L. Kostin, Chairman and Chief Executive Officer, Vneshtorbank
(VTB recently conducted the largest global IPO to date in 2007)
The Russian state is conducting the policy of the open economy. I can mention...there are more IPOs on the agenda for this year for such state owned companies like the Russian electrical power monopoly RAO UES [Unified Energy Systems]. So definitely the Russian government is conducting the policy of open economy and inviting foreign investors to participate in what used to be or still are very important, strategically important sectors of the economy...
James S. Turley, Chairman and Chief Executive Officer, Ernst & Young:
I think that the question that is on everyone's mind out here [in the audience] is...is basically is Russia reliable? At the end of the investors that are there squarely feel that the country is very very reliable. We've done survey work, the FIAC as it's called, and the Russian government of today's investors. Overwhelmingly the investors are seeing greater growth in both top line and bottom line than they expected; greater growth than they're experiencing in many other emerging markets and overwhelmingly, these companies plan to invest more.Having said that, they also say there are continuing problems in corruption, in administrative reforms, and what we take a lot of comfort in, is that the government is not hiding from these issues. The government is in fact taking the results of work yet to be done and sharing it publicly...
Former Republican presidential candidate Steve Forbes:
While in areas like energy and a couple of other strategic areas, the Russian State is playing and will play a large role, the key is if other parts of the economy are allowed to flourish - as happened a little bit in Japan, in South Korea, and especially and even in Taiwan, then Russia's future is great because it does have a tradition in math, in the sciences, engineering. If those intellectual resources are free and allowed to flourish, than Russia will become a mighty economy in the global economy. That was the vision of our original [Russia] editor Paul Klebnikov...he saw these forces rising up. So don't just focus on oil and energy, which gets the headlines. There's a whole lot of other things going on and that's what we've been trying to write about in the magazine.
Nevertheless, the overriding aim of the Shanghai Cooperation Organisation [Russia is a leading member] is political, not business.
Shanghaied by Russia and China:
at root the SCO’s main goals are to maintain “stability†in central Asia against competing bids for influence from the west, Islamists and drug traffickers, and to safeguard energy supplies. These may not all be particularly elevated aims but nor are they highly threatening.
One contributor at the WEF meeting wanting a business perspective, Steve Forbes, said it is a mistake to focus on oil and energy. But why shouldn't we concentrate on the politics? Many think that the future is resource wars.
Incidentally, a former prime minister of Russia - Yegor Gaidar - writes in today's press to support the WEF's call for a rethink of the politics in the international monetary system..
IJ,
That was a good video... I want to find the entire series and watch all of it...
But back to your comment IJ...
Sometimes I write the same thing "It's not politics, it's just business" or "It's not business, it's just politics".
But business and politics at this stage can't be separated.
I mean, the ultimate political move for Putin, for example, is to resurrect Russia's economy.
The ultimate political message for Russia is simply SUCCESS.
I think if your economy is doing good, then your politics appears FAIR... When your economy is lousy, then your politics gets desperate, radical and over the fringe (think US).
When I look at energy I view it as both politics and business, you really can't separate the two, and mainly because the US is in a precarious situation that it needs to make energy a political issue. The US claims it's in Iraq to spread democracy when we all know it's energy, when such tools of deception are used, then it has become political.
Steve Forbes can say that we need to stop the focus on energy, but energy is EVERYTHING. And in Russia's case, energy was a trigger that I believe is similar to Reagan's trickle down economics... Russian energy will not be the holly grail in the future, but it will be the constant economic trigger...
If you have no energy, then you have nothing. But energy alone isn't it, you need a solid monetary system, in fact, the US has a large deficit of energy but uses monetary hegemony to make energy flow to her economy from other nations... despite the gutting of the future of US financial well being.
We can say it should be just business, but success and performance and profit is the ultimate politics. And no form of prosperity will ever exist without energy.
Things are changing fast in the world today and the last decade... Energy is the common denominator to any success or failure, and the SCO is only trying to control it's area by it's local governments... The US might have interests in the SCO areas, but it has as much chance of domination as England had over the 13 colonies in 1776. Never has any foreigner controlled another permanently. The SCO is POLITICS and BUSINESS, together.
Luther,
The SCO is POLITICS and BUSINESS? But business operates within a political framework, as the WEF meetings have confirmed.
Earlier this month, the SCO met in Kyrgyzstan and agreed to form a political energy club. It was reported that the SCO did not specify what the club will do, or when it will be formed. However the club is closed to non-members – the west in general and the US in particular.
Resource wars beckon.
Perhaps the European Union can help. Recognising that the global framework for national politics is inadequate, the new French President gave a taste of what he plans when France assumes the rotating presidency of the European Union next year. Nicolas Sarkozy says: “Europe must progressively affirm itself as a first-rank player for peace and security, in co-operation with the United Nations, the Atlantic alliance and the African Union".
The FT also reported that Mr Sarkozy had tough words on Russia, which he accused of exhibiting a “certain brutality†in using its energy assets. “When one is a great power, one should not be brutalâ€.
Luther,
Why don't you just admit that the real reason you hate America is because it bombed the crap out of your fatherland and remade it in our image?
Seriously, all of the problems you blame on the Amis - unfunded obligations to future generations, stagnant politics, dependence on energy imports - apply just as much to Western Europe, if not more so, than to America, even if you consider Russia and the European continent to be one (and again, that idea's been around since the 1970s - our common European home with the good ole' USSR). Russia of course went through a huge and painful shakeout in the 1990s so that it just doesn't have the same unfunded welfare state obligations (especially health care) to its people as Western Europe and the U.S. have - but that has not been without consequences in terms of its declining public health and the population in Russia, a trend which I certainly hope will be turned around soon. And besides, the U.S. is a bigger country and has more infrastructure to maintain than smaller countries in Europe.
Sure, America keeps up its replacement level birthrate with mass immigration, especially from Latin America, but where is the evidence that it's in worse shape than Europe in terms of the kind of immigrants America is letting in? Better to take in lots of Catholic Latin Americans than increasingly radicalized Muslims.
And if you want someone to blame for ignoring the importance of energy, why are you putting all of the blame on Bush? Even if you disagree with the war in Iraq, you can't say that he and Cheney didn't try to emphasize energy from the beginning (even reaching out to Russia post 9/11) as his political opponents more or less ignored it or pretended that fuel efficiency, wind, solar and ethanol would solve all of our problems, and we need more bike trails and fewer highways or bridges.
Just don't make the comments threads of Russia Blog one long extended "every problem in the world is America's fault" rant. It just gets tiresome.
Luther,
Still 100% sure that Peak Oil theory is true?
http://www.wired.com/cars/energy/magazine/15-09/mf_jackrig
Sure America has made some stupid choices. But is it just the U.S. choosing not to develop oil shale, oil sands, and other domestic sources and not getting serious about nuclear power that has created much of this "crisis"... rather than Mother Nature?
I do not think that the world is running out of oil, for the moment, it just seems to be running low on oil from politically stable places outside of the Middle East.
There are 700 billion barrels of tar sands in Alberta. There could be almost a trillion barrels of shale oil in the Rockies - oil that no longer needs to be crushed or strip mined, but can be cooked and then sucked out of the ground.
Right now they are burning natural gas to do it in Alberta and Colorado, but what if you used nuclear energy to cook the stuff out of the ground instead? Total was looking at doing that just a few years ago, and if oil hits $100 a barrel which you seem to be rooting for, be careful about what you wish for, you just might get it.
http://www.huffingtonpost.com/j-thomas-andrews/oil-shale-to-the-rescue_b_62057.html
One thing I do agree with you on is that ethanol and wind/solar are a joke, and sugar ethanol is not much better than the stuff brewed from corn.
Captain America,
I'll start this post with a short video:
http://www.therussiansarehere.com/flashvideo/main.trah?file=inter-season-thermal-storage.flv
To that, the future can be very promissing to all nations, no need to incircle Russia, bomb Iraqi children, or pumping NGO money for revolutions.
But back to your comments:
The Peak oil movement is about the end of "CHEAP oil", not the end of oil.
There will be plenty of oil and gas 100 years from now, but those societies that require more energy than others (btu per capita) will be leveled economically.
Today the global economy defines competitiveness and productivity based on DOLLARS, not energy input.
As long as this accounting method is dominant, then the US can maintain it's hegemony by PRINTING.
By the way, hegemony is really another word for subsidy or a free ride... get if you can, but eventually you can't fool everyone all the time, eventually this engine burns out.
But things are cracking and it is why GW Bush took such a high risk in Iraq with such limp intel. It's why Boris Berezovsky invested $23 million into Ukrainian colored revolution (and Boris is now suing Ukrainian politicians and wants the money back - simply hilarious !) to surround Russia (oil/gas).
Peak oil is real Captain America, and missile defense or GW Bush on an air craft carrier or landing in Al Asad air base TODAY yammering about troop reductions with yet another marketing photo op will do ZIPPO.
The moment governments, central banks, and people patterns in the common citizens start to realize how valuable energy is, then productivity and competitiveness will be defined based on energy consumption. The moment competitiveness and productivity start calculating energy calories or BTU, not energy dollars, at that point, the global economy becomes realistic - flat and fair and virtual economies based on printing ($) and politics (war on terror - spreading democracy as apposed to soveirgn democracy from within) will become 3rd world nations.
You can invent a drill that can drill down to the center of the Earth or to China, and you still will not mitigate peak oil. Geology and mother nature could care less what high tech gizmos we invent, we basically burned up 1/2 of the world's energy in 100 years (we burn the easy stuff first), while it took 100's of millions of years to make that energy.
The NEW currency is OIL/GAS. The dollar is quickly becoming nothing...
Back in the early 1900's you could sick a 10 foot pipe in the ground in Pennsylvania or around the Caspian and get oil out of the ground with out a pump, it was light sweet crude, it wasn't locked in shale or tar sands... Today, we need 40,000 foot holes, horizontal drilling, satellite analysis, and NGO money to get assess for Western thirst for oil.
Incidentally, did you know that a 30,000 foot oil well, if the well's pressure is not maintained that the pipe collapses? Today we are drilling oil wells in Texas that have a production life of 6 months!!! When most of today's oil in the global market comes from oil wells that don't need high pressure to keep the walls from collapsing and those wells are 50 years old, not 6 months... But unfortunately, those 50 year old well are dieing RIGHT NOW...
The easy stuff is gone. So I'm not arguing about oil or energy in general, but the easy stuff is finished.
And if your society consumes too much energy for some output of services or goods, then print all the currency you want, drill 100,000 foot holes into the ground, nothing will justify suburbia or the latest SUV based on an International semi truck chassis.
So we do agree that ethanol is a joke... But I do believe solar has a great chance (in the EU / CIS)... but solar to power American SUV - NO. Wind and various ocean or water technologies are also promising, but for societies that consume modest amounts of energy, not energy hogs like the US... But the biggest problem I have is with suburbia and the entire US infrastructure. We can't change it over night, while places like Belarus and Russia will become highly competitive when you factor in energy. Western accounting methods have declared CIS nation energy inefficient only when you calculate in DOLLARS. Start calculating in BTU and you realize the US is finished, and it's why America is bombing Iraq and killing Iraqi children.
One of these days, this American kiting of checks for oil is going to end.
Luther,
Are you sure Peak Oil theory isn't betting against human ingenuity? Hydrogen made from H20 may not count for much now, but at $100 a barrel for five years? I think it could start to come on. And you are much too dismissive of unconventional sources of oil. If you can use one nuclear reactor to co-generate steam to literally cook 100,000 barrels a day out of the Green River formation in Colorado AND supply power to California and Texas, I think you might be on to something.
Be careful for what you wish for with $100 per barrel oil, because North American unconventional reserves are the largest on Earth, with only Venezuela's Orinco Belt coming close, and do you really think if the oil companies have a choice between paying a little more in Alberta or getting looted by Chavez, they're not going to pick the former everytime? You certainly can't justify building a nuclear reactor in Venezuela, since it's grid is not well connected to the fastest growing areas of Brazil.
Even China probably has a few billion barrels of oil shale in Xinjiang.
Yes it takes more work to get oil out of the ground than it did 100 years ago. So what?
Most of the doom and gloom predictions you're making were also made in the Seventies, when the USSR was benefitting from high oil prices and America was enduring long gas lines and the American empire was said to be headed for a long twilight. You may say well the rise of India and China reduces America's relative importance - but you could say the same thing about Russia!
Thank God there are some signs that Russia's birth rate is being turned around, at least in the big cities, because gloating about the rise of China and bragging about how they're going to ally with Russia against America is all well and good until they start deciding that they want Siberia and the Far East and that they can bide their time in taking it over.
Hopefully by the end of the 21st century a peaceful democratic China will have millions of its countrymen in Russia but it won't matter, and they will go back and forth spreading prosperity without any problems.
But if China turns south for whatever reason - perhaps your Peak Oil theory turns out to actually be true and not the latest bandwagon for anti-Americans - for all your talk about Russia not needing America and the world not needing Uncle Sam anymore, Russia may need an insurance policy other than nukes to secure its borders later on this century. You can't stop a peaceful invasion with Topol M ICBMs.
My point is not to make the silly statement we often hear that the current Russian leadership is like that of the Brezhnev era - Putin and co. are well aware that without using the benefits of mineral wealth to develop a diversified market economy, Russia cannot remain competitive in the 21st century. My point is, your bet on American decline historically has been a bad one, and the same goes for predicting radical climate changes due to human activity, another thing we were told in the 70s, that human beings were causing another ice age, and if burning petroleum didn't cause it, the impending nuclear war that trigger happy cowboy Reagan would start would finish us off.
While you are right that energy is extremely important and America has been incredibly complacent about it, I think you tend to exagerrate the SUV and sprawl issue compared to the refusal to develop nuclear and other sources issue. That is huge, particularly since enhancing the efficiency at existing nuclear plants has been the equivalent of building a few hundred coal or numerous gas-fired plants. I really do think that nuclear is the future that ethanol and ugly eyesore wind power plants are distracting us from.
Lastly, even if most Russian cities are not sprawling right now, the population of Moscow has doubled since the collapse of the Soviet Union. What makes you think the Russian buildings are more energy efficient than their American counterparts? Where there is growth in Russia to compare apples to apples (Moscow to L.A., or St. Petersburg to Chicago) which city is really more energy efficient? And let's factor out the use of air conditioning, unless you would condemn the Chinese for doing the same...
There's a reason Russia itself, sitting on the world's largest gas reserves though still paying about 1/3rd what Europe pays, is moving away from cheap natural gas-subsidized industries and plans to build two nuclear reactors a year starting in 2010 thru 2040. But in the U.S. all these stupid Congressmen who want to look "green" and don't have to live next to a windfarm are pumping billions into corn ethanol, and hurting the poor - probably even raising food prices in Russia and China, since for all your sneering, I suspect that both countries are buying more U.S. agricultural products than ever before.
Anyway, just stop turning Russia Blog into a forum for your fashionable Eurotrash anti-American rants. There is no need to tear America down to build up Russia's recent achievements. And much of the same problems that America has Russia will also experience, if for no other reason than the imbalance between elder retirees and younger workers will HAPPEN EVEN FASTER IN CHINA AND RUSSIA THAN IN THE U.S. Think about that for a second when you sneer about America letting in milions of people from the Phillipines and Latin America. The biggest deficit a country can have is a shortage of human, not financial potential.
The greatest achievement Putin's successor could reach for is to just get Russia on the road back to replacement level fertility.
Captain America
Captain America,
I read your post, and either I work or burn time responding... that's one heck of a long post... 50% of the stuff I agree, but the other 50% is pure nonsense...
If you left your email I would respond, if you had a web site, I would respond. Those of us who believe in our words and our knowledge type our true names... those that don't believe in what they say, type or think will leave an alias, maybe not you, but it's the tendency.
No offense, but I would be happy to respond if I knew who you were and what point of reference (your career, age, credentials) we both had.
To pick one topic, you wrote about buildings, whether Russian or US are more efficient... I say it's irrelevant... Russia HAS the energy to waste, the US doesn't... it is the US that needs to create delusional stories that Saddam has wmd in order to reach over to Iraq and get the energy for US buildings... regardless of whether US buildings are energy efficient or not, the US must reach over and take... Russia, can waste all she wants, the waste is HERS... And new Russian buildings are as energy efficient as any new modern buildings in the world...
Respectfully,
Luther