Russia in the financial crisis

Russia, with its heavy dependence on oil and gas revenues, its corrupt corporate structure, and its contemptuous treatment of private capital, whether foreign or domestic, was already likely to be hurt by the fall in energy prices and the world financial crisis.

Paul Goble, a veteran Russia-watcher, reports here that the Putin government is making things worse by bailing out the state enterprises, leaving the rest to sink or swim on their own. Nor are the energy companies immune; for decades they have squandered their revenues rather than invest in developing new fields, so that they operate at a loss as soon as prices fall.

Several Russian commentators have warned that this could 'create a revolutionary situation.' While, as Goble points out, apocalyptic turns of speech are common in Russia, the situation is nevertheless quite serious, including even reports of tensions between the government and the military. (Thanks to Ken.)