Russia's oil habit hampers economy- by Alex Nicholsen
Oil prices have been falling and western European customers, rattled by disruptions of Russian supplies, are looking for other sources of oil and natural gas. That might be a wakeup call for Russia to stop relying almost exclusively on hydrocarbon exports as the backbone of its economy. Yet Russia is doing little to diversify -- and analysts say its dependence on energy resources is only getting stronger.
The collapse of the Soviet Union in 1991 left Russia with enormous natural resources wealth and largely moribund industries -- factories that had made low-quality goods sold to other Communist countries and weren't able to compete in a free market. Since then, politicians and economists have insisted Russia needs to modernize its economy. But the immense wealth brought about by oil and gas revenues have drowned out these warnings.
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