February 25, 2012

WALTER RUSSELL MEAD: Resource Curse Works For Putin.

Rising energy prices may be political poison for American politicians, but it’s just the reverse in Russia, filling state coffers and funding new rounds of government giveaways to keep a restless population happy. The FT estimates that Putin needs oil to be at least $80 a barrel to keep this system functioning smoothly. Fortunately for Putin, oil prices are currently around $120 per barrel, and may go even higher due to the situation with Iran.

Besides relieving pressures for democratic change, high oil prices have another effect as well: Russian foreign policy gets a lot tougher.

This is a great example of the resource curse at work.

Indeed.

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