Gabriel Di Bella on macro-conflicts and the oil trap
On July 23 the RANEPA Summer Campus participants met with the head of the International Monetary Fund in Russia, Gabriel Di Bella. The students learned about what may be useful in the macroeconomy for the study and prevention of conflicts.
For the correct understanding of conflict, it is necessary to determine its subject and participants. For example, in a macro-conflicts two generations act as competing parties – the current and the future. The subject of the conflict will be mutual cooperation between the commodities sector of the economy and the services sector.
If there are non-renewable resources in a country, such as oil, there is always the temptation to give them the main role in the economy. Easy money starts to dictate its own rules. There are four strategies that countries with rich natural resources can follow. To spend everything and save nothing, this is the method used by Venezuela. To spend a lot but save some for a rainy day – this is Russia’s strategy. To save most and spend a small account, this path was chosen by Norway. To spend nothing, even interest from deposits on oil and gas revenues, not a single country has ever chosen this strategy. Gabriel Di Bella noted that Norway did not come to the decision to not spend export revenues immediately, but after the strategy to enjoy easy money put the country in a difficult situation.
What does high oil and gas revenues lead to? The entertainment industry starts to actively grow, in the country there is a huge number of restaurants, the price tag on which is constantly increasing due to the rise of welfare. The country stops producing anything other than oil. As a result, when oil resources run out or prices sharply fall, the country is left with nothing: there are many restaurants, but no one produces products. Everyone wants to become chefs, but there are none of the needed farmers or engineers. So a conflict emerges between two generations: if one generation enjoys the riches, the next is forced to deal with the consequences.
In conclusion Gabriel Di Bella said that Russia relatively smoothly got through the crisis with the fall in oil prices, thanks to reserves it already has, but next time they may not be enough. At the end of the lecture, the expert was asked an interesting question: “Who should pick the strategy, the politicians or economists?”, and the answer to it was comprehensive: such global decisions, of course are the purview of politicians.
The organizers of RANEPA’s Summer Campus are RANEPA, the government of the Republic of Tatarstan with the support of ACIG Group of Companies.
The website of RANEPA’s Summer Campus: www.campus4youth.ru
Media Accreditation: Dmitry Sokolov, RANEPA press secretary (tel. +7 903 788 38 02)
The Summer Campus’s general partner is Coca-Cola. The strategic partner is Johnson & Johnson. Partners are AIRR, Tatneft and ACIG Group of Companies.
The strategic information partner is TASS. The main information partner is Lenta.ru. The campus’s information agency is Interfax. The campus’s internet media is Gazeta.Ru. The campus’s journal is Forbes. The newspaper of the campus is Parlamentskaya Gazeta. The main regional information partner is Realnoye Vremya. The regional information partner is Tatar-Inform information agency. The information partner for the Republic of Tatarstan is Expert Tatarstan.
Campus partners are RBC Tatarstan, Russian News Service (Russkaya Sluzhba Novostei), Rossiyskaya Gazeta, Polit.ru, Tatarstan State TV and Radio Company, the weekly newspaper Komsomolskaya Pravda, Radio Svoboda, Kazan TV and Radio Company, Tatcenter.ru, Kazanskie Vedomosti and the Strategia journal.