Why is oil holding Russia back? The government makes money by selling oil, but the people are poor

Mondo Social Updated on 2024-02-17

As a major oil producer, Russia has abundant oil resources and relies on the export of oil to obtain a large amount of foreign exchange earnings. However, despite the fact that Russia** was able to make money by selling oil, ordinary people did not become richer as a result. Why is this happening?

First of all, the development of light industry in Russia is relatively lagging behind. Light industry is the industry that produces the means of consumption and accounts for a relatively small part of the Russian economy. Since the time of Tsarist Russia, light industry has been despised and even firmly hijacked by the military-industrial complex. In Soviet times, the Soviet Union ** invested a lot of resources in the field of military industry, while light industry was neglected. This mode of thinking was deeply rooted in the hearts of the people, and by the time of Russia, it had not been fundamentally changed. Therefore, even though oil brought a lot of wealth, it did not go to light industry and ordinary people.

Secondly, prices are higher in Russia. Despite the fact that oil is Russia's main export, it is not cheap in the domestic market. Due to the high price of goods, the consumption power of ordinary people is limited, and it is difficult to improve the standard of living.

In addition, Russia often invests large sums of money in the arms race. The continuation of the Russian-Ukrainian war has made Russia face a situation of urgent need for funds. In order to maintain the image of a great power and supply the front line, Russia has invested a lot of money in the field of military industry and increased military spending. According to the Deputy Minister of Defense of Russia, the Russian army has replenished 16.5 million pieces this year ** and 3There are more than 60,000 kinds of military equipment, and the proportion of military spending in GDP has reached a record high of 6%. It also means that a large amount of financial resources are tied up by the arms race and cannot be used for development in other areas, limiting the well-being and improvement of living standards for ordinary people.

Oil countries such as Saudi Arabia and the United Arab Emirates have a higher standard of living compared to Russia, mainly due to the following reasons:

First of all, oil countries pay attention to the development of other industries while developing the oil industry. In addition to the oil industry, countries such as Saudi Arabia and the United Arab Emirates are also actively developing non-oil industries such as tourism, entertainment, commerce and trade, and science and technology. In this way, it not only reduces dependence on oil, but also attracts global business, capital and talent to develop, leading to the development of other industries.

Second, oil countries are focusing on improving the welfare of their citizens while developing their economies. Countries such as Saudi Arabia and the United Arab Emirates have improved people's living standards in a variety of ways, including free education, free medical care, and welfare dividends. For example, in Saudi Arabia, ** provides 12 years of free education and truly free medical care for all, which can be enjoyed by both Saudi nationals and foreigners working in Saudi Arabia.

Finally, petrostates focus on attracting foreign investment and entrepreneurship. Saudi Arabia stipulates that foreigners must cooperate with locals to increase employment opportunities and economic vitality through cooperation with local enterprises. In addition, Saudi Arabia also offers a series of preferential policies and tax breaks to attract foreign investors and entrepreneurs.

In general, oil states such as Saudi Arabia and the United Arab Emirates are committed to diversifying their economies and focusing on improving the well-being of their citizens. These countries have more comprehensive and long-term development strategies and policies, through attracting foreign investment and entrepreneurs, opening up markets, reducing taxes, providing welfare and other means, so that the oil wealth can better benefit the general public, improve the overall strength of the whole country and the national living standards.

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