End of 2014 witnessed a roller coaster ride of the Russian national currency and a forecast economic slowdown. What are the implications of the rouble fluctuations for the economy in the short and long term? How long will it take for the economy to recover? Agree or Disagree analyzes the situation with Patrick Young, an international financial analyst.
For you personally, how would you remember this year? What are the memories that you will be taking away from it?
Ivor Crotty: It is obviously something that I’ll take from my work in social media. So, it is just the number of stories that trended and the amazing impact that social media had on journalism and how the news is reported, from Sochi problems in the beginning of the year through to the events around Ukraine MH17 in the summer, ISIS, Ebola – all of these massive world stories that I now see in terms of hashtags and numbers, as opposed to narratives and human stories. So, I think that’s probably my key takeaway form the year.
Patrick Young: I think the biggest thing that happened this year is almost the intangible. That’s what we in the financial markets call volatility. Ultimately, this was a year which brought together a myriad of financial problems and demonstrated that a lot of other problems simply haven’t gone away.
Speaking of financial problems, of course we cannot not to mention the ruble’s situation and the rollercoaster drive that the Russian currency was having a short while ago. Looking at it now, would you say that this rollercoaster ride has come to an end?
Patrick Young: I think it is far too early to say the rollercoaster ride has come to an end, although I suspect things will be a lot more muted as we get all the way through the Christmas and the New Year. At the same time, the underlying problem remains, which is obviously the price of oil and gas. That fall has been so marked that, ultimately, now it is not just Russia that is having a problem. I mean, Venezuela has an absolute crisis; they need oil prices to be pretty much more than double from where they are at the moment.
It is the situation where the whole world is suffering a problem. We could be in a situation where next year we may see the ruble have an incredible rollercoaster ride, because the oil prices may yet go up, because you will see a large number of productive facilities being shut off, because they simply can’t afford to produce the oil and the prices are going to go back up.
President Putin in his Q&A raised a lot of issues on economics and the state of economy, and what it will take for the Russian economy to recover. How are you feeling about the speech?
Ivor Crotty: My sense is that Vladimir Putin and his people are now turning towards the absolute necessity – further liberalize the Russian economy and take some of the bureaucratic breaks off. But that doesn’t discount the idea that the Russian economy is looking at 12 months of pain, that’s for sure. Everybody is expecting a very-very tough year. He mentioned that he was expecting this crisis to last through 2016, but I think Patrick’s point is absolutely right. I think the sentiment will move in a close correlation with the price of oil and gas.
Now, I’d like to look at the situation in the ME. Speaking about the media and how the media covers certain issues, a while back ISIS was in all the headlines across all the major networks. Right now the things have quieted down, do you agree?
Patrick Young: They haven’t cut off any journalists’ heads for the past several weeks and thank God for that. But on the other hand, they and the Kurds are fighting in Sinjar.
How does the ISIS situation portrayed in the States? How does the US media cover that?
Patrick Young: I'm not trying to minimize the role of ISIS, but right now ISIS is way more of a European problem than an American problem. When they break into Turkey, and they already are, from Turkey they are going to Europe. The French have a problem, the Germans have a problem, we don’t yet.
Do you agree that this is very much a European problem?
Ivor Crotty: Yes, I think the numbers back that up. Certainly, a leak published towards the end of the year suggests that the vast majority of foreign jihadists who are joining ISIS are coming from the European countries.
What would you name as the major reason for that?
Ivor Crotty: The failure of multiculturalism in the European project in my opinion is certainly one. But also, the arrogance of a generation of politicians, who felt that they could bite off more than they could chew.
I’d like to turn to the relationship between Palestine and Israel and the nonbinding resolution by some of the EU states to recognize Palestine. What do you think about that?
Patrick Young: This problem between the Israelis and the Arabs hasn’t been solved for 70 year now. That has to change. Mr. Abbas is not a bad person, if he gets a little European help behind him, maybe, we will force the Israelis to finally come to table and negotiate.
Ivor Crotty: I agree wholeheartedly. It is quite clear that something needs to be done. After the absolute devastation of Gaza this year I think any form of progress is to be deeply welcomed.
Netanyahu seems to be the only person who is not happy about the situation. But if there is more recognition of Palestine globally, what is Netanyahu going to do about that?
Ivor Crotty: I think Netanyahu is watching history overtaking him. I certainly hope that’s the case where there is a global recognition of the need to move on from the kind of bipolar status quo, which is his stock-in-trade. He needs that tension in order to justify his existence as a politician and the kind of politics that he pursues. It is a very bipolar and bipartisan politics.