Austin wrote:Good Read
Russia's Second Quarter Contraction Is No Big Deal
After reading that, I get the perception that the main aim of Russian government and CBR is to reduce overall interest rates and keep it low to help people have more disposable income. If the oppositions and social services of Russia get their way, Russia may see an increase in minimum wage by 11% of what it currently is. Quite a jump really, that would help people on the lower spectrum out greatly (as long as products don't instantly jump).
One growing issue is the Russian railways. While they are indeed still purchasing locomtives (had to look it up cause some news mentioned in that crappy article in the Army thread by our vietnamese friend (for joking purposes, so don't blame him) tried to use Uralvagonzavod in an attempt to look like it was losing money and wont make tanks, and it is losing out on the railcar sales, when I read this: http://uralvagonzavod.com/news/87/ and http://uralvagonzavod.com/news/86/, but that is export), RDZ had to make quite the cutbacks in purchasing railway carts. So what was initially orders for close to upwards 400 or more locomotives, it may be in the upper 200's, back to the 2010 year. So some locomotive and cart companies are cutting back development and manpower, also trying to seek further exports (hard when you got a dozen companies competing for the same thing in Russia). So there needs to have something done. Maybe create an alternative railway company as competition to RDZ and have new rail lines going to more places. I know that there are various northern locations pretty much untapped by railway and rely entirely on airplane transport - Norlisk I believe is one of them. So having a rail line going through up to those places, added in newer locomotives that can handle the weather, would create jobs and demand. Also, apparently Crimea has placed with RDZ a contract for rental of locomotives. The locomotive and construction equipment industries are huge employers and money makers, so that is also another field facing issues (not nearly the same issues as in the past, as I have provided information showing that they ordered in the 90's single digit orders of locomotives, compared to now where it is the 3 digit columns).
higurashihougi wrote:@serephonx, austin: My opinion is that Russian economy is really suffered a decline, about 5% decrease this year, but not because of sanction or other sh*t of Western propaganda. It is because EU/U.S. economy is exhausting and has no money buy Russian goods anymore, and because the current reform/change of Russian economic structure.
Russia is the main supplier of high-tech goods and luxuries to EU and U.S., like titanium products, space rockets, oil drilling technologies, super high grade cereal grain, vodka, rod cheese... But at the moment, EU/US economic is in bad shape. Consumption is affected, and Russian business affairs in EU is also affected.
Russia actually makes use of the sanction to give up foreign luxurious, and ram up domestic production to replace these products. Russia kicks the **s of EU dairy products. GM ran away from Russia. Russians stopped travelling to Western countries, boost up domestic tourism. Meanwhile, Russia also takes a look at rising BRICS allies like China, India, and started to increase the amount of business affairs with BRICS friends.
All of that caused temporal disruption in Russian economy and lead to a temporal decline of GDP. But in long term it will boost the domestic production and capability of Russia.
In other words, 5% decline this year is the offering for the deceased old friend EU, before Russia turn its eyes to the growing BRICS.
So far, the calculations is going to be around 3% decline. I believe it is World Bank, IMF and Moddy's that predict this. They may not be 100% straight up on nearly anything, but when it comes to giving bad news, they are pretty accurate.
That said, re-orientating ones economy is always hard, always painful, and quite damaging. But, it is needed. Countries survived for hundreds, if not thousands of years through various economic structures and through good and bad times. That wont change. But Russia taking the hit now, just means that things will end up getting better in the end sooner than later. Hopefully (as long as people keep moving forward and continue to believe in themselves and their country). Russia would have to create domestic demand, and will have to expand itself. One way is its piss poor soviet infrastructure. While they have a good railway lines, they need to expand. Many areas untouched. Especially north (mining is growing in Russia, so they need more railways up in the northern mining districts). But of course, the government makes cutbacks, thus such projects wont come to fruitation in years and they create their own stagnation.
Russia relies too much on exports in terms of looking for growth. At least right now. I have a feeling that they are moving to more domestic oriented economy as now Asia is facing major issues too, so they have no one else to turn to, besides themselves and developing nations in Africa and certain parts of Asia. We will be seeing in the coming decade(s) that what was Russia's traditional economic power, will be changed. I think it will be more agriculture, heavy industry and services. Things like oil, gas and mining will continue to be major exporters, and along with certain other goods. But wont be dominant since majority of the other countries in the world are trying to domesticate production of their own, and that will lead to further issues in the future for exporters of heavy equipment (China included). So it would be in Russia's best interest, and the major companies, to start opening up parts production in other, growing countries, to be able to secure a position in those other countries. But, due to old soviet mindset, many of these businesses don't do that with some recent exceptions (rostselsmash and Avtovaz in Egypt).