This paper is a part of “Comparative Analysis and Policy Proposals Aimed at Diversifying the Russian Economy and Enhancing Prosperity” project, supported by the UK Foreign and Commonwealth Office. Essentially, it largely determines the political economy of the society, which lives off resource rent. It’s rather that it, just like in the USSR itself, had been hindering the process of raising the energy efficiency of production. The next day, the mobilization plan for the production of ammunition was put into effect, and on June 24, at The Council of People's Commissars of the Soviet Union, the Council for Evacuation is created. 22 See, for instance, Charles Tilly and Mancur Olson, The Rise and Decline of Nations: Economic Growth, Stagflation and Social Rigidities (New Haven: Yale University Press, 1982). Many other oil-exporting nations suffered just as much, if not more than the Soviet Union. The principal price hike took place in January 1974: from $4.31 to $10.11 per barrel (see figure 2). . We will adhere to its initial interpretation, which is the reduction of long-term economic growth rates of a country along with the growth of certain indicators of its resource availability (the share of raw materials in exports, total raw material exports, or raw material extraction per capita). The freight turnover increased by one and a half times compared with the first quarter of 1942. In April 1942, the mobilization also touched the villagers. Development of USSR Oil and Gas Complex in 1960-1980s (Moscow: Nauka, 2002),192. This sharply reduced the inflow of foreign currency and made the Soviet Union export more oil. 101 National Economy of the USSR in 1989, 644. 44 Data on actual oil output from: Global, British Petroleum, “Statistical Review of World Energy 2006 (2007). The size of the share of each category of participants has important political-economic consequences. This page was last edited on 6 December 2020, at 10:28. That’s why the actual share of oil and gas rent is lower than the cited figures. In order to accelerate the commissioning of industry facilities. . The Dutch disease is called a disease because it implies that it’s hard for the economy to recover after a period of high oil prices since over this period the processing industry and agriculture lose their competitiveness due to reduced output volumes during a boom period (it learns by doing less than it could have if there was no boom). There is a conventional theoretical justification of subsidizing inefficient production if the stated cost of positive externalities from such subsidies (in the form of inside-company, inside-industry, or inter-industrial “learning-by-doing”) exceeds the losses from profits not received from the export of goods. 18 PlanEcon Report 4, nos.39-40 (October 1988), 2 (as cited by Gustafson,286). This city was part of a khanate that was annexed by the Russian Empire at the beginning of the century. If we take the actual production costs Ĉt = Ct + εt, where ε is the excess value of production, the corrected rent will be R = PtQt – Ĉt = PtQt – Ĉt – εt. This means that companies have easily available capital during periods of structural changes in the economy. These factors included some reserves, an immediate increase in working hours and a mobilization of civilian workers who were previously involved as defense subcontractors. This is why the current generation, maximizing its current wealth, borrows much more than it would if it cared about the well-being of future generations. What if Western Siberian oil was never found? The time of hand-dug wells had ended. Also, by the end of the 1960s, geologists came to the conclusion that the Yamalo-Nenets Autonomous Region in the northern Tyumen Region had huge, unprecedented natural gas deposits.41, It’s important to note that Western Siberian deposits were located in extremely harsh climatic conditions (although less extreme than Eastern Siberian ones, which Russia plans to explore in the medium term). The Influence of Natural Resources on Economic Development: a Brief Review of Theories and the Problems of Applying Them to the Case of the USSR, Discovering Oil From Azerbaijan to Western Siberia, Estimates of the Russian Economy’s Resource Rent in the Soviet Period, Energy Efficiency of the Soviet Economy as an Indicator of Weakening of Energy Preservation Incentives. In 1950, less than 1 percent of the total USSR energy resources production was exported; by 1960, this share rose to 8 percent, and by 1970 it increased to 14 percent. This resembles Giffen goods—goods for which the amount of demand rises along with the increase in their price. Most were driven by standard automotive engines. Even during the record-breaking year of 1987, oil output (at 625 million tons44) was way below estimates. The heavy dependence of energy-resource consumption on economic growth had disappeared due to the widespread use of energy preservation. Agriculture wouldn’t be able to boost the harvest output due to chronic problems that had accumulated over decades. Thus, rent can be divided into five categories: All these categories need to be taken into account during the calculation of rent. Interest and discount rates did not reflect the preferences of society (and only loosely reflected those of the country’s leaders) in regards to risks or the choice between the present and the future. In the second scenario of 2 percent annual growth of marginal production costs the rent does fall, but insignificantly. In one dog fight on 16th July 1944, 18 Yak-3s faced 24 German … However, we can assume that this explanation of the emergence of oil exports dependence is incomplete; it seems that there was a two-way dependence. Matthew J. Sagers estimates the cost of extracting an extra barrel in the mid-1980s at $15, while the world price of a barrel of oil stood at $14.14 According to other estimates, “It was only due to huge expenses that oil output somewhat increased in 1986. By the middle of 1944, prisoners worked at 640 industrial enterprises in the country. . As can be understood from their argument, by natural costs they mean the best result the USSR could have achieved under a certain technological and organizational level of its energy sector.70 Unfortunately, the authors analyze the distribution of oil and gas rent by the five above-mentioned components only in post-Soviet Russia. It’s unclear why a resource boom should aggravate the quality of policies. The resource curse theory is not an all-inclusive doctrine, but rather a combination of many hypotheses about the effect of different factors (mechanisms) that determine the negative correlation between the growth of resource availability and the change in economic growth rates. Resources were delivered in the wrong composition, were presented in the wrong order, and then often used for a purpose other than that for which they were intended. In 1944, large deposits were found during the war, but most drilling activities began only in 1955. As hard currency from exports has been received only from supplies to developed nations, it’s important to know the distribution of the supplies between groups of nations (see table 9). Thanks to oil, the USSR got an opportunity to acquire Western technologies for manufacturing cars, synthetic fiber, and other consumer goods, and also to buy animal feedstock. Gas output was planned to grow fifteen-fold, from 45.3 million to 680–720 billion m3 (all of this came as part of Nikita Khrushchev’s idea that “the present generation of the Soviet people will live under Communism”). As Vasiliy Pater, the former head of the State Planning Committee’s (Gosplan’s) oil industry subdivision, recalls, in the 1970s, annual plans did not correspond to the five-year plans, and actual figures were different from both of them. Also, it could be noted that while the energy efficiency coefficient increased from 31 to 39 percent in the 1960s, in the 1970s it grew just a bit, from 39 percent to 42 percent. In The State Planning Committee's plan, a total of nine million workers were working for defense in 1940 and their jobs in industry, agriculture, transport and construction. 93 Russian foreign trade. The modern Russian economy, although under pressure from government intervention, is still qualitatively different from the Soviet economy. . 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