Russia's Top Priority - Diversify From ENERGY

With Russia's stock market up approximately 80% year to date, CNBC television anchor Maria Bartiromo recently sat down with Russian President Dmitry Medvedev to discuss what lies ahead for Russia's heavily energy-dependent economy. Russia, the 'R' of the famous 'B.R.I.C.' acronym, owns the world's largest natural gas reserves and, as a result of the global slowdown that began in late 2007, witnessed its GDP shrink by a staggering 9.5% during the first quarter of 2009. Looking to the immediate future, economists are currently forecasting that the volatile pace of decline in Russian economic activity will slow during the 2nd quarter by a less break-neck rate of 6.5%.

In the below five minute interview segment, President Medvedez appears poised to utilize the government's vast resources ($600 BILLION U.S. dollars) to help deliver stabilization to Russia's volatile economy. Mr. Medvedez's current strategy appears focused on diversifying the country away from the energy and commodities sectors and into biotechnology sciences and information technology. Lastly, it's interesting to note that, according to CNBC, Russia's current unemployment rate is higher than the U.S's and stands at 10.2%...a figure that implies that about 7.7 million Russians are currently unemployed and looking for work.

Data Courtesy: CNBC

U.S. Fiscal Budget As % Of GDP (1940-2009E)

In the below CHART of data ranging from 1940 to 2009 it's interesting to Note :

* Just how LARGE (relative to GDP/Gross Domestic Product) the U.S's budget deficit was during the World War 2 ERA..maxing out at a whopping 30% !

* According to the Wall Street Journal, some economists are CURRENTLY predicting a 2009 budget deficit of approx 10% of GDP

Double-click for a larger image:


online.wsj.com/article/SB123315486943524321.html


Data Courtesy: The Wall Street Journal

REF - World's Largest Economies

WORLD'S LARGEST ECONOMIES according to 2006 data published by the International Monetary Fund (IMF):

*Largest by Nominal GDP:
1. United States -- $13.2 Trillion
2. Japan -- $4.4T
3. Germany -- $2.9T
4. China -- $2.6T
5. United Kingdom -- $2.4T
6. France -- $2.3T
7. Italy -- $1.9T
8. Canada -- $1.3T
9. Spain -- $1.2T
10. Brazil -- $1.1T
11. Russia -- $ 1.0T
12. South Korea -- $0.89T
13. India -- $0.87T
14. Mexico -- $0.84T
15. Australia -- $0.76T
16. Netherlands -- $0.67T
17. Turkey -- $0.4T
18. Belgium -- $0.39T
19. Switzerland -- $0.39T
20. Sweden -- $0.38T
21. Taiwan -- $0.36T
22. Indonesia -- $0.36T
23. Saudi Arabia -- $0.35T
24. Poland -- $0.34T
25. Norway -- $0.33T
Other Notables:
30. Iran -- $0.22T
37. Venezuela -- $0.18T
65. Luxembourg -- $41 Billion

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*Largest by GDP per Capita ("the value of all final goods and services produced within a nation in a given year, divided by the average population for the same year"):
1. Luxembourg -- $102K per person
2. Norway -- $79K
3. Qatar -- $71K
4. Iceland -- $63K
5. Ireland -- $59K
6. Denmark -- $57K
7. Switzerland -- $57K
8. Sweden -- $47K
9. United States -- $46K
10. Netherlands -- $45K
11. United Kingdom -- $45K
12. Finland -- $45K
13. Austria -- $44K
14. Canada -- $43K
15. Australia -- $43K
16. United Arab Emirates -- $42K
17. Belgium -- $42K
18. France -- $41K
19. Germany -- $40K
20. Italy -- $35K
21. Singapore -- $34K
22. Japan -- $34K
23. Brunei -- $33K
24. Kuwait -- $32K
25. Greece -- $32K
Other Notables:
36. Taiwan -- $16K
39. Saudi Arabia -- $15K
54. Russia -- $9K
61. Brazil -- $7K
83. Iran -- $4K
104. China -- $2K
132. India -- $1K

Data Courtesy: Wikipedia.com + the IMF, snagged on 4/05/08.

IBN CEO + Economic Growth in INDIA

On Friday ICICI Bank (IBN) CEO, KV Kamath, spoke at an investor conference in Mumbai, India and updated the investor community with his unique short + long term views on the current GROWTH prospects of the INDIAN ECONOMY:

*In the immediate future (most likely referring to growth for 2008) India is expected to grow at 8%...a rate that is being somewhat handicapped by the 'temporary challenge' of inflation facing the country

*In the longer run, India should grow at about 10%...and this phase of growth could continue for 17-20 YEARS (!)

For some perspective, the U.S. is a much more mature economy vs. India and economic/GDP growth in an annual range of 4 to 5% is considered robust.

http://www.financialexpress.com/news/ICICI-Bank-to-wait-for-cues-before-effecting-change-in-rates--Kamath/292594/

Data Courtesy: Financialexpress.com, snagged on 4/05/08.
Full Disclosure: I own shares of IBN.

GRAPH - U.S. Debt % of GDP

U.S. PUBLIC DEBT (the public's burden of the government's debt) as a percentage of GDP is currently less than 40%. Per the graphs shown in the link below, looks like things will have to get a whole lot worse before we challenge the post World War II highs:

http://en.wikipedia.org/wiki/Image:USDebt.png

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*For some perspective...According to the CIA World Factbook, note Country's X public debt % of GDP:

Japan --> 194%

Germany --> 65%

Canada --> 64%

India --> 59%

Brazil --> 44%

UK --> 43%

US --> 37%

Saudi Arabia --> 23%

China --> 19%

Australia --> 15%

Russia --> 7%

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

Data Courtesy: Wikipedia.com + CIA World Factbook.