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Yale's Sonnenfeld breaks down myths surrounding the strength of Russia's economy - YouTube
Channel: CNBC Television
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uh jeff good to see you you have nine
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myths here
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this study boils up to to boils down to
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this
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russia is in trouble on the verge
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potentially of imploding let's take you
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have nine myths i want to bear down on
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three of them let's start with this one
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russia is making up for lost western
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business and imports by replacing them
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with imports with from asia why is that
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a myth and untrue
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yeah putin's trying to pretend that they
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can you know pivot east for for energy
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sales which of course is not true and
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they're trying to pretend that all the
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companies that left this historic 1 200
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companies multinational companies that
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left aren't hurting them because they
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can substitute the imports from china
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will not only have their imports uh into
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russia as we've seen plummeted by more
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than 50 percent but in fact taking a
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look at china's own data they have their
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customs data as public and it's pretty
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reliable it's the what they're sending
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into russia
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from china has also plummeted uh more
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than 50 percent you know they like to
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create this myth of um
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bellicose self-reliance
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long russian tradition of saying they
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invented electricity and you know uh and
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airplanes and automobiles and sliced
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bread but the fact is they're not
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self-reliant is they they are you know
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pulling about 25 percent of their gdp is
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is from uh imports and when you look at
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their two major exports which is oil and
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gas it's not as easy as just flipping a
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switch and saying okay we will send that
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unbought or unpurchased gas and oil from
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europe and switch it to india and china
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and oh by the way sell it at a 35
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percent discount there isn't the
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infrastructure to get that product to
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those places myth number two russian
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domestic consumption and consumer health
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remain strong why a myth
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that's also a myth uh is that we're
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seeing that just what are people buying
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there are malls everywhere we have
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photographs we have actually people on
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the ground in russia and elsewhere in
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moscow and elsewhere uh that the stores
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are shuttered malls are closed uh
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of course largely the the western
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businesses that left which is uh 12 if
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you believe russia's numbers merely 12
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of the workforce which is 5 million
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people right there but we know that even
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taking their numbers the indirect
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employment there is about three times
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that so we're looking about 40 of the
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people out of work the mayor of moscow i
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don't know how he's doing these days but
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back in april he admitted he even by
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then he had hundreds of thousands of
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people unemployed out on the streets so
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there's there's massive unemployment you
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look at sales of critical areas such as
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um
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oh uh you know parts that they need for
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apple supplies or industrial equipment
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they can't get this yeah
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let's look at let's look at the final
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myth and then we'll talk we'll wrap it
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up putin says he's running a budget
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surplus thanks to high energy prices
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true or false
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no he's he's he's running a deficit and
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nobody's going to fund that deficit
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because it's un uh uninvestable to put
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money into into russia in fact of those
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companies who pulled out we found the
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more dramatically they pulled out the
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better wall street uh actually
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celebrated them so
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doing well and doing good were
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consistent with each other
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does does russia need to sell its gas to
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germany even more than germany needs to
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buy it
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good for you that's something that a lot
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of journalists missed for a while
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because putin was trying to create the
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opposite smoke screen the idea that he
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is this great uh global energy czar is
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running out of gas that myth is crazy is
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russia needs to sell about 85 86 percent
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of their gas into europe uh but in fact
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europe only needed at most 43 of their
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gas and now the us supplies more gas uh
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to europe than than russia did at its
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peak and and norway substituting and uh
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as as they now develop the a process to
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transfer liquid gas back into a gasified
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energy is uh they're going to be able to
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take a lot from algeria and other places
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in the world so this won't be a problem
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this is going to be done by the end of
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this calendar year so yeah russia russia
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is very dependent they're like a vassal
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uh state in a in a feudal system and a
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mercantile system finally and finally
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and quickly they putin loves to brag
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about the strength of the ruble true or
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just a bunch of fertilizer
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you know that's fertilizers one of their
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key products is uh no it's it's
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ridiculous it's it's not an open traded
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currency it you can't sell uh your
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rupals of you for dollars or anything so
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it's it's a set price it's closed and
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and in fact uh it there there there's no
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there is actually no volume of trading
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in rupals
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