Russia’s Humble Pie

According to the EU Observer, Gazprom’s fourth-quarter profits in 2008 dropped 84 percent, to €811 million. That means a decline of €4.2 billion. Ouch. What’s more, Gazprom is limping into the lean years carrying a whopping €30 billion in debt.

I imagine all the windfalls from the fat years went straight into Russia’s reserve fund, but Moscow has been burning through that to prop up the ruble and finance its budget deficit. According to Russian Finance Minister Alexei Kudrin (via Robert Amsterdam), the fund will be “practically exhausted” in 2010. In mid-April, Kudrin suggested that Russia might turn to foreign investors to finance its debt for the first time since 2000.

I’m beginning to think whoever was responsible for putting “overloaded” in place of “reset” on the famous button Secretary of State Hillary Clinton offered Russian Foreign Minister Sergei Lavrov might have been onto something.

I’m also beginning to think that, barring any major surprises that lead to systemic failure, the global financial crisis might end up being one of the Obama administration’s major allies in restoring U.S. influence worldwide. Sure, we took an image hit for having caused it. And yes, the Chinese will own half the planet by the time it’s over.

But just think of how hard recalibrating the Russia, Venezuela and Iran portfolios would be if all three were still raking in hefty energy revenues. Obama’s done a good job of disarming people with his openness and charm. But the task has been made a bit easier by the fact that the U.S. is not the only country that’s been humbled by recent events.

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