Russian Economy General News: #1

Hannibal Barca wrote:

sepheronx wrote:I had a good conversation with a guy at work (HR - Statistics) and he said something interesting regarding global economy.

Pretty mich, he stated that it appeared to be controlled/Fabricated and it really has more to do with banking and strength/control than it is about an end product. He further explained that back in London, it was the manufacturing center for England, yet now, they produce nothing. Whats making it grow is its influx of foreigners and the stock exchange, while it still sells British culture to many other countries (former colonies).

Russia is a large economy with many enterprises. Whats funny is the magical words that get thrown around like: Corruption, Diversify, Multiculteralism, and less regulations. But, if you look at the more prospering countries like India and China, they have massive corruption. About as much or more than Russia (no, the transperency index is not a good indicator as it relies on perception). So corruption can only be a factor, amd possibly a small one. Ok, then what about diversified economy? Well, what does that mean? If you look back from the late 90's and early 2000 to now, Russia had still quite a few industries building high tech products, heavy industrial goods and Energy development. It was pretty diversified. But now, you have significantly more, with Nanotech companies popping up, car manufacturing up, more personal wealth for domrstic consumption, more semiconductor facilities, ect. Yet, in all of that, people are saying they are not diversified. So what does that word mean then? In the end, it ends up as a perception more so than anything else.

Ultimately, what was boiled down for me, was that because of Russia's politics, and lack of control, will make it never rich. They have products built in Russia en mass, but no one buys them outside of CIS countries cause they are competitors and so tarrifs destroys sales. Maybe, propping up its neighbours to be economically strong, will help Russia in long run in order to make sales of their other products. Or go the way they are now and not be successful. Because all Europe and China wants is your resources, not end goods. To sell end goods to China, there should be policies in place where both sides have to sell each other a # of end goods for each sector.

There is no such thing as a conpetitive good, when the opponent will not import your product because it will compete with theirs.

Edit: forgot to mention that since the market is already flooded with cheap end goods which will pretty much not end up doing any good for Russia if they competed against. Hence why you dont see Germany doing such manufacturing. USA does but a lot of the components are not made in USA, and the cost of the goods are expensive (Kirkland brand, Kitchenaid,etc).

There is no need to leave on denial. Tariffs, restrictions, and politics do play a role but if we speak about everyday family oriented industrial goods still Russia lacks BIG time.
Lada doesn't sell in Germany not because Opel, Mercedes, BMW, VW are German, but because they can beat the crap out of the pure Lada.
TV and refrigerators and air-conditions make no exports because Mitsubishi, LG, Philips, SONY, Panasonic are VASTLY superior than anything Russia can produce.
There are no CPUs that can match Intel and AMD that's why we don't have any Russian laptops and not because we protect our-self's against Russia.
ROSATOM sells like hotcakes cause they are BETTER than General Electric despite NPPs are much more STRATEGIC sector than f@@ing CD players and MP3s
Sukhoi and Tupolev create flying machines better than Lockheed or Airbus that's why once they get full production their civil planes will expel Airbus from Europe despite the latter
being French!
So the key is to be good. And due to communism non individualistic consumption and the lost ground after the resolution of USSR Russia's small every day civilian industry is mostly laughable.
You don't deny reality, you change it.

Hannibal Barca wrote:

Austin wrote:Hannibal or any body can tell me if Structural Reforms is the key problem that impending growth as Russian Central Bank says it.

What is the Structural Reforms needed ?

Why are they not doing this Structural Reforms so far ?

Structural Reforms include all the legislative and bureaucratic changes that can make a market business and investment friendly.
It also include fight against corruption, transparency, privatization fight against monopolies and environmental legislation.
It can go even further including reforms in the banking sector, free movement of capital etc.
In one word it means Westernization and decrease of the government control over economy, relaxation of  fiscal and trade balance policies etc.
eg
http://en.wikipedia.org/wiki/Index_of_Economic_Freedom
http://en.wikipedia.org/wiki/Ease_of_doing_business_index
http://www.doingbusiness.org/data
http://www.doingbusiness.org/data/exploreeconomies/russia

Especially in the last site you can find a ton of data.


Yeah half of those reforms are much needed for Russia. Specially corruption and bureaucracy is a no-no for economic development. And banking sector need huge reforms.
The other half is US lead rhetoric to degenerate emerging economies. Yet in the needed half, Putin said that Russia will be in the top 20 business friendly countries until the end of his presidency.

If you ask me Russia needs this reforms to be more attractive for Western capital, but is not gonna see a lot of western investments anytime soon anyway    and they will see a hefty rise of eastern investments anyway.
What they need this reforms is mainly for the inner market. And yeah, inner market will gonna boost instantly if they resolve some long standing problems.

Still, reforms or not, the Russian economy's fundamentals and real economy indexes raise fast enough that this is not what you call stagnation, but merely slowdown.
Stagnation is when you have zero growth and a general dying out of the economy and a general notion that you have hit  a wall.
Like Japan in the 90s, Europe today, USSR in the 70s. Today Russia certainly doesn't fall in this basket!

Hannibal Barca wrote:I was looking about Elbrus recently but I couldn't find enough information and benchmarks etc.
If you know enough about Russian semiconductor industry specially for PC products create a specialized thread.
This is a field where traditional Russia/USSR is behind.

Austin wrote:Foreign debt is high because cheap money at 0-1 % interest rate is available from US or Europe.

Public Debt is generally Government Debt.

Foreign debt includes debts taken by bank , private sector , banking sector and government.

Austin wrote:Government cant control from where private bank and company take loans from.

They take from where it is cheap , in Russia you get loan at interest rate 8 %

If private bank/companies fails then its an NPA .....its better they fail.