Vladimir Putin: NNR: Non Renewable Natural Resource Scarcity
1996/7 St Petersburg Mining Institute PhD Theses
The total value of Russia’s mineral and raw materials base according to the explored and evaluated reserves of all types of extractable resources, comes to no less than 28 trillion USD, however an evaluation of the [EROEI] profitable portion comes to only 1.5 trillion USD. ….. At the first stage, the state’s efforts must be directed at solving the following problems: improvement of the natural resources legislation, including improving the administrative and criminal liability for violating it; ……..one should note that ….. the solution of many social problems and a whole range of factors which determine the future of the Russian Federation depend overwhelmingly on the level of rationality, well-considered responsibility and the scale of the use of natural wealth potential.
– [EoP Amended] VV Putin: Mineral & Raw Materials Resources & Development Strategy for the Russian Economy.
“The first event that had a very significant impact on Putin was the 400-day blockade of Leningrad in 1941-1944 that left millions of people starving, freezing, and dying in the besieged city. Every Leningrad family was deeply scarred by that terrible time, and the Putin’s were no exception. Putin’s older brother didn’t survive the blockade. Vladimir, born soon after the war, knew everything about the sufferings of his family and all the fellow citizens. He understood that had there been enough food in the city, his brother would have survived. So, young Putin realized the vulnerability of cities and the dangers that food shortages can pose. Thus, for him, and for all Leningraders, the notion of food security became an essential element of functioning of their native city.
“The test of how well Putin learned the lesson of basic food security came unexpectedly with the breakup of the Soviet Union. Links between the countryside and cities that had been maintained in the Soviet command economy failed. Collective farms kept food for themselves, depriving industrial and administrative centers of supplies they had grown accustomed to in the post-war decades. Russia’s large cities, especially Moscow and Saint Petersburg, found themselves on the brink of hunger in the winter of 1991-1992. The weakened and failing state couldn’t help.
“Inflation destroyed the purchasing power of the Soviet ruble, and low commodity prices could not generate sufficient hard currency receipts. The only option left for cities was to purchase food abroad through barter schemes, and the only real currency they could trade with was natural resources. Cities had to secure shipments of food from the West against delivery of various natural resources from other territories of Russia.
“In Moscow, Yury Luzhkov, a deputy mayor at the time, struck a deal with Gazprom to assist Moscow in purchasing food for the city during the first post-Soviet winter. Gazprom sold gas to Central Europe in exchange for basic foods: Moscow received 600,000 tons of potatoes and 100,000 tons of apples and onions in exchange for 1.5 billion cubic meters of natural gas in a deal negotiated between Luzhkov and Polish deputy prime minister Leszek Balcerowicz.
“In Leningrad, Putin, then a member of the City’s Committee on Foreign Relations, was assigned to negotiate similar resources-for-food agreements. He assigned several private trading companies to facilitate the barter schemes, because the city lacked its own independent mechanisms to execute them. In other words, he delegated authority to the emerging private sector….
“To make the story short, Putin’s scheme failed. The deals for the most part fell through because companies never fulfilled their obligations, delivering only a fraction of the initially agreed quantities of food. Luckily, the winter was not a severe one, and household food stocks, a traditional, almost instinctive, survival mechanism, helped to relieve the shortages.
“This early experience and failure in his public career taught Putin two lessons. First, in addition to reinforcing his belief in the importance of food security and essential survival, Putin realized that the ultimate currency that a Russian official can have at his disposal is raw materials. It is therefore not surprising to find a lengthy list of strategic materials in Putin’s 1999 article, where he lists basic foods along with uranium, oil and gas, and other materials. To sum up the first lesson, during cataclysmic events, Russia’s ultimate guarantee of survival, and subsequently of wealth and development, is natural resources. Since they are essential to Russia’s survival and security, they should always be kept in strategic reserve.
“Putin drew a second lesson from his mismanagement of the resources-for-food schemes: private companies can’t be trusted. Therefore, the state has to exercise some degree of control. Having trusted private companies, he failed because in an unstable and unpredictable environment, private companies may often disregard their obligations and act exclusively for their private interest. In the ideas he expressed in the dissertation, Putin favors a market economy with strong state regulation and preemptive power in the economy.
“However, it took another challenge, and partial political fiasco, for Putin to be fully persuaded of the validity of his economic management model. This was the infamous case of the St. Petersburg casinos. The city of St. Petersburg nominally owned a 51-percent share in the newly established gambling business but was unable to control the casinos’ financial flows. As a consequence, profitable casinos cooked their books to show operational losses, thus depriving the city of its share of revenues. As in the minerals-for-food case, the city council and the public accused the Sobchak-Putin administration of corruption and mismanagement. The case was not dropped until Sobchak’s defeat in the 1996 elections and Putin’s resignation.
”These cases prompted Putin to devise state strategies for corporate management beyond simple majority ownership. Putin once again voiced mistrust for private enterprises. Speaking about casinos in St. Petersburg, he expressed his deep regret that he didn’t have enough time to “squeeze” cash from the casinos. He says in First Person [p. 102]: “If I had remained in Peter [St. Petersburg], I would have squeezed those casinos to the end and forced them to work for the betterment of society and to share their profits with the city. That money would have gone to pensioners, teachers, and doctors.” Putin also suggested that private companies should operate within boundaries permitted by the state for the betterment of society, therefore, in a way, not necessarily for efficiency and maximization of profits. By growing too rich, companies — in this case casinos — compromise the state’s ability to execute power with the potential to paralyze the government’s effectiveness.
“Here is where Vladimir Litvinenko likely comes into the picture. If Putin had wanted to better understand this idea of natural resources and national security, he would have looked for specialists on the issue. He would naturally have come across the leading specialist on the subject, a geologist and director of the prestigious St. Petersburg Mining Institute, Vladimir Stefanovich Litvinenko. Litvinenko informs Putin that the world is running out of resources, and makes a point that we, Russians, cannot waste our own resources; and as we tap them, we should ensure they are continuously replaced or otherwise we are going to quickly deplete them.
“The simple and logical chain of events outlined above shaped Putin’s personality and made his economic and political thought systemic and consistent. At the time of completion of the dissertation, Putin’s approach to management and governance was fully developed. He argues that the cornerstone of his policy — to provide for the well-being of the population and ensure stability — is economic security, and that raw political power and patriotic commitments of governing and enforcement structures need to be complemented with economic state order. To him this order is only sustainable through various control mechanisms over essential strategic commodities. As a former deputy mayor of a large industrial city, Putin is aware of the inefficient and uncompetitive nature of the existing manufacturing sector and Russia’s economy in general. He sees Russia’s mineral resources as the only “hard currency” that ensures not only the economic and political security but also the very survival of Russia. Mineral resources are the ultimate insurance for overcoming any crisis, and they represent a disaster contingency plan. And, of course, they are the source and engine of Russia’s economic and political recovery.
“While Vladimir Putin realizes that market economy is the only system capable of effectively delivering on the set goals, he accepts its introduction in Russia with caution and some reservations. He contends that since Russia’s natural resources bear critical strategic properties for the state, their management should not only be heavily regulated but also controlled by the state. Therefore, mineral resources should always remain at the ultimate disposal of the state — regardless of their ownership and the model of the economy. He sees the state as the only institution that can responsibly secure resources for the long-term development of Russia rather than for private corporate interest.”
– Military Gospel Reports: Brookings: The Mystery of Vladimir Putin’s [Peak NNR] Dissertation, Igor Danchenko and Clifford Gaddy.
Mineral & Raw Materials Resources & Development Strategy for the Russian Economy, by VV Putin [Excerpts]
The sustainable development of Russia’s economy in the upcoming years should be based upon orderly growth of its component parts and first of all due to the potential of mineral and raw materials resources. Moreover, sustainable development as it applies to minerals and raw materials is to be understood as the guaranteed provision of economic security to the country through the creation of a reliable mineral and raw materials base for satisfying the current and expected needs of the Russian economy taking into account the ecological, social, demographic, defense and other factors.
[..] The total value of Russia’s mineral and raw materials base according to the explored and evaluated reserves of all types of extractable resources, comes to no less than 28 trillion USD, however an evaluation of the profitable portion comes to only 1.5 trillion USD.
[..] The Russian mineral and raw materials complex plays an important role in all vital state functions: Provides for the reliable supply of mineral and raw materials to the branches of the economy. … Makes a weighty contribution to the formation of the income side of the country’s budget; its production continues to be the main source of hard currency receipts. …. Comprises the foundation of the defensive might of the country. … Preserves social stability … will provide for an increase in the level of prosperity of the population and a reduction in social tension.
[..] Regardless of who the natural, and in particular mineral resources belong to, the state has the right to regulate the process of their development and use, acting in the interests of society as a whole and individual owners whose interests conflict with each other, and who need the assistance of state authorities to reach a compromise.
In a centrally planned economy, natural resources use was located outside the sphere of the market economy. At the beginning of market reforms in Russia, for a certain time the state let go of the reigns of the strategic administration of the natural resources complex. This resulting in the stagnation of the national natural resources potential, the collapse of the geological industry which had formed over many decades, and a series of other negative consequences. But now the market euphoria of the first years of economic reform is gradually yielding to a more balanced approach, which admits the possibility of and recognizes the necessity of the regulatory action of the state on business processes as a whole and natural resources in particular. The practice of countries with a highly developed market economies provides many examples of the efficacy of state intervention in long-term projects for developing natural resources.
A modern strategy for rational resource consumption cannot be based exclusively upon the capabilities of the market as such. This relates even more to the transitional stage of economic development, and thus to the economy of Russia. Practice shows even our innovative enterprises often do not use energy-saving technologies.
[..] At the first stage, the state’s efforts must be directed at solving the following problems: improvement of the natural resources legislation, including improving the administrative and criminal liability for violating it; deepening and improving the economic mechanisms for natural resources usage; clarification and correction of the licensing systems and regulatory regimes for natural resources usage; the development of an audit mechanism in the area of natural resources usage; the expansion of the list of types of natural resources used on a for-pay basis; the creation of an effective mechanism for the financial support of programs and measures for the replenishment and conservation of natural resources, the formation of criteria and requirements for the delimitation of state and other types of ownership of natural resources, as well as the creation of a federal fund of reserve fields of extractable resources and other forms of natural wealth, etc.
In conclusion, one should note that ….. the solution of many social problems and a whole range of factors which determine the future of the Russian Federation depend overwhelmingly on the level of rationality, well-considered responsibility and the scale of the use of natural wealth potential.
– Military Gospel Reports: VV Putin: Mineral & Raw Materials Resources & Development Strategy for the Russian Economy.
Chris Clugston: Peak Non Renewable Natural Resources
[In the absence of the implementation of an Ecology of Peace international law social contract, that restricts procreation and consumption to below ecological carrying capacity limits; and enables humane and orderly deindustrialization and depopulation return to living in harmony with carrying capacity limits] As [the Peak NNR: Non-renewable Natural Resources] scenario unfolds, increasingly large segments of humanity will become aware of the fact that NNRs enable our industrialized way of life, and that ever-increasing NNR scarcity is the fundamental cause underlying our continuously declining economic output (GDP) and societal wellbeing levels, both domestically (US) and, by that time, globally as well. Historically prevalent public attitudes of generosity and forbearance, which were made possible by abundant and cheap NNRs during our epoch of “continuously more and more”, will be displaced by public intolerance:
- Childbirth will be condemned rather than celebrated;
- All immigration will be outlawed;
- Traditionally unquestioned resource uses—from “social entitlements” and universally accessible healthcare, to professional sports and cosmetics—will be considered “unfair” or “wasteful”, and ultimately eliminated; and
- “Excessive wealth” will be appropriated for “the public good”.
Previously sporadic social unrest and resource wars will degenerate—seemingly instantaneously—into full fledged conflicts among nations, classes, and ultimately individuals for remaining natural resources and real wealth. It will become universally understood that the only way to “stay even” within a continuously contracting operating environment—much less to improve one’s lot—is to take from somebody else. Life will become a “negative sum game” within the “shrinking pie” of “continuously less and less”.
Social institutions will dissolve; law and order will cease to exist; and chaos will fill the void— nations will collapse.
Given that half of the 89 analyzed NNRs are either likely or almost certain to remain scarce permanently at the global level; that no extraterrestrial source NNR imports exists for the world as a whole, and that the global industrialized / industrializing population has increased nearly 5 fold since 1975… …it is highly likely that the interval between global societal wellbeing “divergence” in 2008 and global societal collapse will be 35 years or less.
To date, our distorted cornucopian worldview and limited anthropocentric perspective have rendered us incapable of understanding our predicament and its fundamental cause, which is ecological—ever-increasing NNR scarcity [as a result of international law clauses that allow for the right to breed and consume with total disregard for ecological capacity limits]—not economic or political. The economic and political problems with which we concern ourselves are merely manifestations of our predicament—they are symptoms, not the disease. Because none of the [WiP] economic and political expedients that we employ to solve these problems can create additional NNRs, our attempted [WiP] economic and political “solutions” are irrelevant.
– [EoP Amended] Chris Clugston; Scarcity: Humanity’s Last Chapter.
» SQSwans: Reports: Peak NNR.