The feel-good artists are coming to the surface out of
nowhere, and they are coming up with the sort of articles they know have a good
chance of crossing the desk of a receptive editor that will want to publish them.
And they will be met by a receptive audience that will want to read them and
enjoy them. Vladimir Putin is the new villain on the block, and writing that he
presides over an economy that is going nowhere is a surefire winner because
this is what people wish were true, and what they want to be told.
Most of the artists are amateurs who wouldn't know an
economy from a hole dug up in the backyard by their dog. But the thing is that
it became fashionable ten years ago to accuse everyone they disliked of presiding
over a bad economy, and those who wished to participate in the debate but had
nothing original to contribute, jumped on the bandwagon and started saying that
the new villain had a bad economy – which is what motivated him to act so
badly. And they got published and they got paid.
But once in a while comes an individual that looks like an
artist, may even sound like one, but turns out to be knowledgeable in the
subject of economics. He jumps on the bandwagon, may even lead it in
badmouthing the economy of the new villain, but leaves the door open to say
later that the bad economy has suddenly turned into a roaring one, and here are
the reasons why. One such non-artist is Rushir Sharma who is head of emerging
markets at Morgan Stanley Investment Management.
Sharma wrote an article under the title: “Putin's Potemkin
Economy” and the subtitle: “There are few sources of income other than oil and
gas, and wealthy Russians are moving $60 billion a year out of the country.” It
was published in the Wall Street journal on March 24, 2013. When you read the
article, you learn that Putin did perform an economic miracle during the first
decade of this century, growing the per capita income of the Russian people
from 1,500 dollars to 10,000 dollars. That's an average of almost 21 percent a
year in that period of time.
Putin then preoccupied himself with other things, says
Sharma, and the economy cooled off – perhaps because of that – but also to
reflect what was happening everywhere else in the world, especially in Europe
which is Russia 's
major trading partner. In fact, the writer reminds his readers that only last
year, Forbes Magazine named Putin “world's most powerful person of the year,”
having scored a string of successes on the geopolitical stage. What this means,
in short, is that Putin has the Midas touch because he turns everything he
touches into gold, thus greatly benefiting his beloved Russia .
So we ask: What does that mean in the context of the current
situation? Well, it means that if Putin is motivated enough to turn his
attention back to the economy; he can duplicate the success he scored before.
And all the talk dished out by amateurs and professionals alike about a Russia
that is having a bad economy may turn out to be the catalyst that will motivate
Putin to once again turn his attention to the economy. And the moment is
propitious because the world, including Europe, is coming out of its slump
which will help Russia
greatly.
And when you look at all the reasons listed by Sharma as to
why the Russian economy is not doing well at this time, you find that nothing
is as serious as to make Putin despair. In fact, to paraphrase the well known
saying: a rising worldwide tide will lift all boats including the Russian. Add
to this the Putin Midas touch, and the Russian boat has the potential to turn
into a yacht of czarist luxury.
How could this come about? Well, Sharma says that “Before
2008, Russia was putting back to work the oil fields, factories and labor force
that were idled by the collapse of the Soviet Union.” And he says that now:
“While Russia
has a relatively high rate of investment … the old Soviet roads and railways
are deteriorating.” Surely then, Putin will want to start here. Add to this the
fact that the Russian moguls who used to take 60 billion dollars out of Russia to
invest in the West, have now been scared off, and have repatriated most of that
money. They will have no choice but to reinvest it in Russia proper,
and invest the surplus in the fast growing economies of the newly emerging
powers. They will be swimming in money and so will Putin's Russia .