Russia: Prices Will Rise And Income Will Drop

Opinion (Michael Khazin, an economist, from “Russia’s economy is dependent on the world’s. And if the global crisis continues to grow and oil prices keep falling, the result will be a greater financial ‘hole.’ We do not have a self-sustaining industrial core and are not food self-sufficient.

“If high inflation begins in the U.S. and Europe, then due to fixed oil pricing, if oil prices do not fall, the food prices will increase dramatically. That is, the income of some segments of the population will drop. This sounds like the story of Egypt and Tunisia, where the revolution took place because a greater part of the population spent 80 percent of income on food.

“Now, any actions provoke a negative situation. Nothing depends on Russia. For Russia, the increasing role of imports is a disaster because the entire industry, including food and consumer goods, is imported. Prices are rising, but the state cannot do anything.

“It will become much more difficult for domestic producers because the pressure of imports will be higher. And Russia has nothing to export.”

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