It's interesting being downmodded for being there and having a clue.
I'd be to Samara in three weeks, would YOU?
If you really care about Russia, start acting better than those who libel Russia. That means, don't libel back.
I guess that's just not interesting enough. Truth is overrated.
Well, I'm Russian too, and your comments are totally wrong. I can say my arguments after I hear yours.
Finally, cursing on HN (even in Russian) doesn't make you sound good.
Face with it: IKEA drains money from the country (is that called investments) and also their offerings are crap. Maybe it's just my experience; Тёмочка praises them. However, my experience is that you should only go there for tasty фрикадельки.
There are over 30 Russian factories working for IKEA. How does this correlate with your theory of IKEA killing local factories?
Anyway, a valid point.
This is a common misconception and almost certainly wrong; you may need to brush up on your knowledge of economic theory if you harbour such fallacies. Perhaps start with comparative advantage:
If we'll find that we don't have comparative advantage over China in all manufacturing, we have two choices: - Ruin all the country manufacturing and hope for economical tooth fairy to save us - Fotrify economy against comparative advantage by introducing tariffs on imported goods.
It's noble and cool to think that every country have its own comparative advantages, but, some don't. In this case you either lose your manufacturing entirely, or defend it.
Have you read this: http://en.wikipedia.org/wiki/Comparative_advantage ?
There are plenty of things highly skilled Russians can and should be doing rather than making crappy, expensive furniture. But you know this, of course. This is what every other country does.
And there are plenty of other countries which earn the bulk of their foreign currency in commodity exports, mine included, and it's not a hotbed of corruption. In fact, minimising corruption can be a comparative advantage in itself.
"In this case you either lose your manufacturing entirely, or defend it."
Who would want to defend their furniture manufacturing capacity!? Yes there are strategic industries you can make a case to defend. But furniture? "Mr. President, we must not allow... a furniture gap!"
Anyway, if you're going to protectionist your way to the poor house, at least do it legitimately as part of a top level economic strategy. Local corruption is absolutely not the way to enforce a tariff.
I don't really buy it, though. It strikes me as being too cute by half and I can think of any number of counterexamples. For example, Norway, Canada and Australia have immense resource wealth per capita and no-one would say they're bad places to live. And Canada has 3x Russia's oil reserves, with 1/5th the population!
I think resource wealth is just a multiplier. If you have a bad government, it can make it even worse, but with good management it can provide a useful flow of income.
Norway was a democracy before the oil income. (I don't know about export incomes and Canada/Australia. Do they get most income from that?)
Edit: Syntax, so it will parse in your brain.
But yeah, good point on being a democracy before the money started to flow. That might indeed be the key. Resource income enables an otherwise uncompetitive, poorly-run country to keep its head above water, and sustain the worst sort of government even in the absence of advanced industry. And Russia is certainly pumping its oil as fast as it possibly can.
Who knows though. A bit of oil money would probably help North Korea. At least they'd have something to trade, some link to the outside world, some foreign currency to buy food. That's what I don't like about nice neat theories like that - they try to simplify the inherently unsimplifiable ..
1. Liberal democracy. Economy works more or less, so the leaders have lots to stea.. tax.
2. Dictator. Most everything, including citizens, belong to the dictator. Bad economy and dangerous, since dictators must have external enemies (so all complaints are treason).
3. A country with natural resources. There is no need for leaders to go to 1, since there is enough to steal anyway. Keep people down and fill the Swiss account as long as possible.
This categorization explain why democratizing has gone up for a few decades.
Model "1" generally gives more to steal for the politicians, even though they can only get part of the country. "2" is the only alternative if most people (would) hate the dictator if they got free media. See North Korea. Iran is an obvious example of model "3".
(The only country I can mention that doesn't fit the [broad] categories is China, but they start far back so give them time.)
Point is, oil would help NK's dictators but not anyone else.
However: employing 140M people is a problem; distributing those money between regions is a problem; not turning into banana republic is a problem (already failed that one).
Those problems can be, to some extent, solved by having manufacturing intact and working, if slightly inefficient.
I'm not saying it's only about furniture. This question is probably orthogonal to the whole IKEA discussion. Sorry :)