Putin’s words about reducing «oil dependence» turned out to be a lie

The country cannot get off the oil and gas needle

Russian President Vladimir Putin could not answer the question about «personal responsibility» for the growing poverty of Russians. Instead of a concrete answer, he referred to oil price decrease. At the same time, Putin said that the Russian economy is gradually getting rid of the «oil and gas needle», although the process is slow. However, these assurances are not compatible with the statistics of the Ministry of Finance.

Putin and poverty
Putin and poverty

The question of a decrease in the income of Russians and an increase in poverty was raised again in the new issue of the interview. Putin answered the following to the question about personal responsibility for these processes:

“There are objective circumstances, you see. What can be said about personal responsibility if oil prices have fallen on the world market?”

The helplessness of this answer is striking. The president’s phrase reminded many viewers of his famous hypocritical expression about raising the retirement age “please take it with understanding”. Other commentators recalled the equally famous “she drowned”, in reference to the tragedy of Kursk submarine.

At the same time, Putin claims that the dependence of the Russian economy on oil and gas exports is steadily declining:

“We wanted to get away [from oil dependence] and gradually we are doing it, by the way. We are really moving away from this, because the share of non-oil and gas revenues is growing … But it takes time, you can’t do it with one click”.

However, the president’s statements are poorly correlated with reality. Although the Ministry of Finance of the Russian Federation constantly talks about the planned reduction in the share of oil and gas revenues, statistics from this department eloquently indicate that the dynamics of the share of oil and gas revenues in the Russian budget does not have a clearly defined trend. Sometimes it is higher, sometimes lower, depending on market conditions, and generally ranges from 36 to 51%.

The share of oil and gas revenues in the total revenue structure of the federal budget
The share of oil and gas revenues in the total revenue structure of the federal budget

(Data for 2019 is taken from the publication — Ed.)

Moreover, it turned out that the calculation method used by the Ministry of Finance contains ambiguity. In addition to the “net” oil and gas revenues, there are so-called “expanded” oil and gas revenues that are associated with the oil and gas industry, but the Ministry of Finance did not include them in the overall assessment. Meanwhile, in 2018, the amount of proceeds from these “expanded” items amounted to 10.5 trillion rubles. In other words, Russia’s dependence on hydrocarbon exports is much stronger than the President and his officials are trying to present.

Over the two decades of his reign, Putin and his “team” have been unable to either restore the Russian industry, or rid the country of export dependence, or increase the welfare of the nation. On the contrary, poverty and devastation are growing in the country, and the widely publicized import substitution has failed. But the Russian oligarchs are constantly gaining weight. It cannot be otherwise: the Russian government does not serve the people at all, it serves the big capital. The President and the government are effectively fulfilling their main task — to rob the country, rob the population and stuff the pockets of the oligarchs.