Financial guru Nouriel Roubini says the Russian economy is headed for more trouble, thanks to its over-reliance on oil.
Russia’s economy shrank 8 percent last year, producing painful social and economic costs for the country, he says.
And while a rebound has begun, that won’t last too long, says the New York University professor.
"Last year was a disaster: a collapse of economic activity, recession. Now there's the beginning of economic recovery, that's the good news," he told CNBC.
"The main trouble with Russia is long term. It’s a one commodity economy — oil and gas. . . . That’s not going to change until oil prices drop sharply."
Russia’s rampant corruption doesn’t help, Roubini says.
"It’s a political economy problem. There are vested interests that are essentially extracting rents through corruption from these high oil and gas revenues,” he said.
“The system is just based that way.”
And what could change it?
"It’s not going to change until there's another shock like either a crisis or a collapse in oil prices or a political shift that's going to lead to a radical change in this basic economic regime," Roubini said.
He doesn’t see that happening “for the foreseeable future."
Mark Mobius, chairman of Templeton Asset Management, disputes Roubini’s bearish view
“Russia has huge natural resources, including oil and gas but also nickel and palladium, which are much in demand. The Russians also possess considerable technological skills,” he told The Times of London.
© 2012 Moneynews. All rights reserved.