sepheronx Sun Jan 19, 2014 1:31 am
I had a good conversation with a guy at work (HR - Statistics) and he said something interesting regarding global economy.
Pretty mich, he stated that it appeared to be controlled/Fabricated and it really has more to do with banking and strength/control than it is about an end product. He further explained that back in London, it was the manufacturing center for England, yet now, they produce nothing. Whats making it grow is its influx of foreigners and the stock exchange, while it still sells British culture to many other countries (former colonies).
Russia is a large economy with many enterprises. Whats funny is the magical words that get thrown around like: Corruption, Diversify, Multiculteralism, and less regulations. But, if you look at the more prospering countries like India and China, they have massive corruption. About as much or more than Russia (no, the transperency index is not a good indicator as it relies on perception). So corruption can only be a factor, amd possibly a small one. Ok, then what about diversified economy? Well, what does that mean? If you look back from the late 90's and early 2000 to now, Russia had still quite a few industries building high tech products, heavy industrial goods and Energy development. It was pretty diversified. But now, you have significantly more, with Nanotech companies popping up, car manufacturing up, more personal wealth for domrstic consumption, more semiconductor facilities, ect. Yet, in all of that, people are saying they are not diversified. So what does that word mean then? In the end, it ends up as a perception more so than anything else.
Ultimately, what was boiled down for me, was that because of Russia's politics, and lack of control, will make it never rich. They have products built in Russia en mass, but no one buys them outside of CIS countries cause they are competitors and so tarrifs destroys sales. Maybe, propping up its neighbours to be economically strong, will help Russia in long run in order to make sales of their other products. Or go the way they are now and not be successful. Because all Europe and China wants is your resources, not end goods. To sell end goods to China, there should be policies in place where both sides have to sell each other a # of end goods for each sector.
There is no such thing as a conpetitive good, when the opponent will not import your product because it will compete with theirs.
Edit: forgot to mention that since the market is already flooded with cheap end goods which will pretty much not end up doing any good for Russia if they competed against. Hence why you dont see Germany doing such manufacturing. USA does but a lot of the components are not made in USA, and the cost of the goods are expensive (Kirkland brand, Kitchenaid,etc).