The mood at this year’s Valdai Club meeting was gloomy, which was inevitable since it took place against a background of the stagnation in Russia and the United States and the crisis in Europe. In Russia, both state and society appear to lack the capacity for internal regeneration. If this is so, then Russia can still continue fairly successfully along its present path as long as energy prices remain high, but it will not build up the kind of new economy that will be able to replace energy as a source of wealth in the long term.
Russia’s technological decline was underscored by our visits to Volvo and Volkswagen assembly plants in Kaluga, where despite state efforts to the contrary, almost 100 percent of the vehicle parts are still being imported from abroad. I heard a particularly savage comment on the state of the country’s industry from a Russian friend. She said that even though all the parts are foreign, people still prefer to buy the same vehicles from abroad at higher cost because they simply do not trust Russian workers to assemble the vehicles properly. Alas, this prejudice seemed partly borne out by the high rate of quality failures at the Volvo truck factory in Kaluga. In addition to this, there was news of the Fobus-Grunt Mars probe, which drew attention to the decay of Russia’s space program.
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