The national corporation?
Or the corporation's nation?
Knowing about Gazprom and its operation is crucial to understanding how the regime is structured and how government works in Russia. It may well be more important than knowing about the Duma and how its members are elected. But, on a political science exam, questions about the Duma are much more likely.
As Gazprom Goes, So Goes Russia
"Gazprom and the government have long had a close relationship, but the revolving door between them is spinning especially fast this year: Mr. Medvedev... replaces Mr. Putin as president; Mr. Putin becomes prime minister, replacing Viktor A. Zubkov; and Mr. Zubkov is expected to take Mr. Medvedev’s place as Gazprom’s chairman at a general shareholders meeting in June...
"It’s hard to overemphasize Gazprom’s role in the Russian economy. It’s a sprawling company that raked in $91 billion last year; it employs 432,000 people, pays taxes equal to 20 percent of the Russian budget and has subsidiaries in industries as disparate as farming and aviation.
"The company is a major supplier of natural gas to Europe, and it is becoming an important source of gas to fast-growing Asian markets like China and South Korea... If crude oil and natural gas are considered together, Gazprom’s combined daily production of energy is greater than that of Saudi Arabia...
"Now that Russia is seeking to reclaim the geopolitical clout it had in Soviet days, it is wielding its vast energy resources, rather than missiles, to reassert itself. More often than not, its most potent artillery is Gazprom itself...
"Under a policy championed by Mr. Medvedev when he served as deputy prime minister, Russian consumers are going to have to pay starkly higher prices for natural gas. Prices are set to rise about 25 percent a year, starting this year, with the goal of reaching parity with world energy prices by 2011...
"Just as Gazprom’s riches make it a proxy for Russia’s newfound power and prestige around the world, the company also epitomizes the risks of state capitalism: waste and inefficiency...
"Russian leaders consider Gazprom the template for a new industrial policy. In a globalized world, their thinking goes, strategic Russian companies should be controlled by the government, yet open to the capital and skill of Western investors — just as Gazprom is. It’s a throwback to the Soviet economic model, with an emphasis on gigantism and economies of scale and faith in the pricing power of monopolies...
"Rich as it is, Gazprom faces big challenges in the Medvedev era.
"Rising prices for steel, equipment and labor have caught the company at the outset of its largest capital program in two decades. Like other Russian companies, it invested little money maintaining or upgrading equipment in the 1990s. But the days of coasting on Soviet-era infrastructure are over, as output declines from fields first tapped in the 1970s...
Labels: economics, political culture, Russia
posted by Ken Wedding @ 8:35 AM
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