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A top moscow academic says russia should move its capital closer tothe far east by efwegbe erergeer
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A top moscow academic says russia should move its capital closer tothe far east |
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Business,Business News,Business Opportunities
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By Fareed Zakaria A bold proposal recently caught my eye: One of Moscow's topacademics says Russia should build a new capital city. This citywould be far, far away from Moscow, 4,000 miles to be exact in Vladivostok. Why? Well, the person who proposed the idea, Sergei Karaganov ofMoscow's Higher School of Economics, wrote in a state-run newspaper that a capital in the far east would make Russia part of what hecalls "the rising world" closer to dynamic Asian economies andfurther away from an aging Europe. The idea of moving a capital is not without precedent.
British India moved its capital from the coastal city of Calcuttato the more centrally located Delhi in 1911, and then created thecity of New Delhi. In the 1920s, Turkish nationalists moved their capital fromIstanbul to Ankara, kick-starting rapid growth in central Turkey. More recently, Brazil moved its capital from Rio de Janeiro toBrasilia, in the center of the country; and Kazakhstan moved itsseat of government from Almaty to Astana to be closer to Russia. It's unlikely President Vladimir Putin will want to follow suit.But he would do well to think about the underlying thrust behindthe argument: Moscow needs urgent reform. Russia is not really abooming emerging market economy.
It is an oil-rich kleptocracywhere mostly everything else in the country including theonce-vaunted military is in a shambles. Putin often cites figures to show he has presided over a boom. Theaverage Russian's income has risen more than seven-fold in the lastdecade, from 2,000 to 14,000 dollars a year. Yet that statistic tells an incomplete story. Russia's growth hasbeen uneven.
Moscow has 78 billionaires more than any other city in theworld. Those billionaires, along with others in the rest of thecountry, account for 20% of Russia's GDP. Far higher than anycountry. That doesn't leave much of Russia's economy for businesses and theother 141 million people in the country. The second problem is that Moscow's fate has for years been linkedto crude oil prices.
Data shows how Russian stocks have risen andfallen in step with oil prices. According to Reuters, Russia now needs crude to trade at $117 abarrel simply to balance its budget. That number used to be $50 asrecently as 2008, and $27 at the start of Putin's first presidency.Talk about a bloated state. In part, Moscow's escalating expenses are a result of Putin'slargesse, a policy designed to keep his electorate happy and keephim in power.
Rising crude prices have allowed Putin to maintain that system ofbribery. But with global growth now slowing, he can no longer counton the same set of conditions for the rest of his presidency. Instead, he needs to reform the economy. Private companies need thefreedom and confidence to actually develop. Russia has only one main bank its people need a financial systemthey can trust.
Russia ranks 143rd in the world on Transparency International'scorruption index. To his credit, Putin acknowledges these problems. Shortly after hisre-election, he spoke of improving Russia's rank in the WorldBank's "Ease of Doing Business" list, from 120th in the world to aplace in the top 20. He also targeted raising investment from 20% of GDP to 27%. But if those targets sound somewhat familiar, it's because he's setsimilar ones before during his first presidency.
And didn tmeet them. This time, he not only has the economy to fix: he's also faced withan opposition movement with growing courage. The Kremlin this week welcomed a new cabinet, but it's mostly fullof mostly the same old faces. If Putin keeps the same old policies,his problems may only just be starting. I am an expert from Gas Cooker, Range, Stove, usually analyzes all kind of industries situation, such as minolta maxxum 7d , casio ex z110.
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