Those bankers may be back collecting their bonuses, and the financial press in the west may be talking about “green shoots” – but the “real economy” in Russia and the former Soviet Union will take years to recover from the crash.
The extent of the devastation was something I had to think about while working on a paper, just published by the Oxford Institute for Energy Studies (where I am a senior research fellow), entitled The Impact of the Economic Crisis on Russian and CIS Gas Markets. You can download it here: http://www.oxfordenergy.org/pdfs/NG36.pdf
… and find plenty of other interesting stuff about the economics of the gas industry here: http://www.oxfordenergy.org/gasresearch.php
The industrial downturn in Europe, to which Russia exports much of its gas, as well as in Russia and the CIS, has trashed demand for natural gas – the revenues from which are a vital part of Russia’s wealth.
So in the first half of 2009, compared to the first half of 2008, European industrial output was down by about 15-22%, Russian gas sales to Europe were down by about a third, and the revenues from European sales for Gazprom, Russia’s state-owned gas company (and the country’s biggest firm) were down from $33.1 billion to $20.3 billion.
In Russia itself, where industrial output suffered the same sort of crash as in Europe, gas sales were down 6% year on year. But the real disaster area was Ukraine. Its steel industry pretty well packed up over the winter of 2008-09, with workers being put on short-time or sent on unpaid “holidays” within weeks of the Lehman Brothers crash. Its gas demand in the first half of 2009 went down by nearly 29% – and that was mainly because consumption by industry was cut by more than half.
I’ve argued in my paper that gas demand will get back to its 2007 level only by around 2012 in Europe, and only by 2015 – or even later – in the former Soviet Union. “Recovery” of western banks – which itself is far from assured, in any case – is a quite different thing from “recovery” for Russian and Ukrainian industry.