That aside, we're talking about the cartel that crashed the WORLD economy just 10ish years ago. If that isn't cause for pause I'm not sure what is. There's more to life than convenience.
Despite not having studied history or economics or politics or war, surely you must see the risks of dismantling an economic system that has raised billions out of poverty without any type of replacement?
It's like a diabetic stopping their insulin in the hopes something better will come along.
It's not in shambles. Your sources are lying to you if that's what you're hearing. Economy is not in a well state and definitely worse than few years before, when oil sold for much more, but there's nothing very bad about it and it's improving. Sanctions actually helped a bit with economy by providing advantage for internal production.
The government is trying very hard to preserve its USD reserves. Importing vehicles is downright banned for 16 months now, and there are many rules imposed to control the USD outflow and improve the inflow.
I don't think this is anything new amidst a global pandemic, in a country that depended on tourism.
Saying that chemical fertilizer ban caused a food shortage isn't any fair or accurate, because the sugar crisis (a can of worms by itself) happened before the fertilizer ban, and the government imposing lockdowns caused the food supply issues. That said, there are many companies increasing their organic fertilizer production, and even smaller scale individual investors who are planning to produce organic fertilizers too.
Many of us see this as a net positive, but there must be a ramp, as opposed to an overnight switch.
I'm certainly not suggesting its some great depression, but clearly its note and newsworthy and this article reflects that. Why the protesting about the article? What exactly is the problem? In autocratic regimes state media's job is rally stocks and, yes, the lack of which is very telling, which is what this article is about.
Again, what exactly is the problem here? If this was any Western economy, HN'ers wouldn't be falling over themsleves trying to dismiss it as sensationalist, especially when you consider the endless parade of anti-US sensationalism that often dominates this site and its collective narrative.
However, governments used monetary policy much too aggressively (printing money) whereas they should have been using fiscal policy (taxing rich people). Now comes the reckoning.
Terrible article, focused entirely on "bad" companies, and no words expended for the total disruption the lockdowns caused and bailouts that made such things not only possible, but inevitable.
You can't shutdown all production plus pump money into it at the same time, and not expect inflation.
I spent a good chunk of last year in a developing country that locked down.
The economic consequences are still being recognized. Drive around the prime tourist areas and all the storefronts are empty. Factory workers are going back to their small towns and waiting it out, so factories can’t find workers. Western companies are canceling orders, etc.
They are learning you can’t turn chunks of the economy on/off. Every change of rules mean investors and customers eventually just “sit and wait it out”. Plus the cost of restarting factories, bringing tourism back, etc isn’t small, so when countries go back and forth the smart move is to just sit back and wait.
I think it's great that this is being publicized and getting attention. It took many economic mis-steps to bring such a country to it knees (printing money, restricting prices with price ceilings, import taxes, etc), I kinda wish they would focus on all the economic errors they've made, so the rest of the world can learn from those mistakes.
Acknowledging one of these is much more politically palatable to the elites than the other. If the economy suffers a bit, well that's just because we cut off a world-leading supplier of fuels, food, and industrially-important metals, not because we've been fucking over the rest of you for own profit over and over and over again. Reality is, both are true to greater and lesser extents depending on who and where you are. Economy is complex, the global geopolitical situation is undergoing a major shift, probably nothing will be clear without 100 years of hindsight.
There are opportunists on both sides. The main mistake the government made was having an economy that was too heavily dependent on a single industry. After oil prices dropped rapidly it was almost certain you'd see economic turmoil. There's no economic theory that would've saved a country that was too dependent on a single source of income.
I guess you're referring to the hare-brained organic farming push and ban on importing fertilizer and pesticides? Sure, that made a bad situation worse but that isn't the root cause. The ban itself was motivated by dwindling forex reserves. High foreign debt, gross mismanagement and corruption, precipitous drop in tourism all contributed to the crisis.
> At the same time some of those market disruptions need to happen and the incumbents were probably never going to get there.
It is always a question: is this "disruption" worth the cost - minorities and the poor cut off from taxis, illegal hotel operations robbing people (again, in many cases poor and working class) of their sleep, and trust in democracy as a whole?
Yes exactly. They are allowed to continue hurting the economy for decades.
>I would have thought the most dangerous interventions were ones that tanked the economy and caused widespread poverty and desperation. But yeah, slightly reduced economic output sounds worse.
The compounding effect of slightly reduced economic growth adds up to a lot over the long term. Much more than a big one or two year drop in GDP. You can do the math and see what I mean.
>The underlying claim here is that all interventions cause economic damage, even if we can't detect it.
To clarify, you probably can detect it but like all economic phenomena, we don't have absolute proof that so-and-so economic policy was the cause of the damage. We only have a reasonable cause to believe it is the cause.
The problem is that the majority of the electorate are not well-versed in economics so unless the damage is extremely obvious they're not going to react properly and correct the harmful policy..
I think at the end of the day if a country's strongest asset is its "demand", that is, its ability to consume goods and services instead of produce them, then i think that country is in for a world of hurt.
That aside, we're talking about the cartel that crashed the WORLD economy just 10ish years ago. If that isn't cause for pause I'm not sure what is. There's more to life than convenience.
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