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    Russian Economy General News: #6

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    higurashihougi
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    Re: Russian Economy General News: #6

    Post  higurashihougi on Wed Jan 20, 2016 3:57 am

    Austin wrote:They are better of buying Gold with money then US Tressuries , I am not sure the obsession of Central Bank to buy US tressuries.

    Don't know about Russia, but we can refer to the case of China, China is still buying the U.S. debt bond.

    As far as I know, China lend money to the U.S. and the U.S. use that money to... buy Chinese goods.

    Chinese goods are cheap and very competitive, they outcompete U.S. domestic goods and gradually crushed U.S. domestic manufacturers.

    In short, China is buying the U.S. domestic market and kicking out domestic U.S. manufacturing enterprises.

    Dunno whether Russia is doing the same thing.

    Austin
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    Re: Russian Economy General News: #6

    Post  Austin on Wed Jan 20, 2016 4:02 am

    China buys US tressuries to keep its Yuan artifically low so that its major exporter county US it can derive benefit but for Russia its not the case , Gold is real wealth and its better for CBR to increase Gold reserves to around 4000T

    sepheronx
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    Re: Russian Economy General News: #6

    Post  sepheronx on Wed Jan 20, 2016 6:32 am

    Austin wrote:Not sure why Russia is cutting Space Funding by 500 billion roubles it would be like $7-8 billion considering they are leaders in Space.

    Its one of the worst decision to cut funding ,For a country that claims to have resourse base of $30 Trillion , Cutting funding for short term that too for 10 year period is not a wise decision.
    I dont agree with it either.  But with Roscosmos being classified as a comoany, they probably realize that Roscosmos will get contracts or has them through private transactions and will profit from it.  This just seems to hurt Russian nations own initiatives instead of roscosmos.  Good and bad.  Also, Roscosmos is one of Russias major developers that would be using Russian import substitution products.  Cutting funding will hurt that too.  They will just end up taking much longer to do projects now and any ambitions will be sidelined for now...

    sepheronx
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    Re: Russian Economy General News: #6

    Post  sepheronx on Wed Jan 20, 2016 7:44 am

    Mr. VV the P gave mention and data regarding small/medium private companies in Russia in terms of performance and talks of opporunities:
    http://tass.ru/en/economy/850833

    "The number of registered commercial organizations in small business sector increased by 2.9% during 2015, and the number of individual entrepreneurs increased by 3.7%," he said. According to the head of the state, "there is a modest increase in revenues." He gave the example of small businesses, which in January-September 2015 had a 8% increase in revenues as compared with the same period in 2014. "In wholesale trade it was plus 4.5% in the same period," Putin said.

    max steel
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    Re: Russian Economy General News: #6

    Post  max steel on Wed Jan 20, 2016 9:39 am

    Corruption has nothing to do with Innovation unless they are eating RnD fund also.

    kvs
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    Re: Russian Economy General News: #6

    Post  kvs on Wed Jan 20, 2016 10:24 am

    max steel wrote:Corruption has nothing to do with Innovation unless they are eating RnD fund also.

    No, but the innovation metric is the same crap as the corruption index. The columns are the terms used to calculate
    this index. The productivity column is 1) wrong and 2) not related to innovation. Anyone who thinks that the Russian
    economy fails to adopt new technologies is a certifiable idiot.

    Hannibal Barca
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    Re: Russian Economy General News: #6

    Post  Hannibal Barca on Wed Jan 20, 2016 10:36 am

    Nobody was expecting, and it isn't rational either, to expect oil down to 18$
    Russian economy has a lot of shortcomings but this is economic war.
    This is not the time to make changes and adopt policies, this is the time to squeeze time and if you survive you sit to the winner's table.
    Later Russia must finally decrease the influence from hydrocarbon exports.

    kvs
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    Re: Russian Economy General News: #6

    Post  kvs on Wed Jan 20, 2016 11:29 am

    Hannibal Barca wrote:Nobody was expecting, and it isn't rational either, to expect oil down to 18$
    Russian economy has a lot of shortcomings but this is economic war.
    This is not the time to make changes and adopt policies, this is the time to squeeze time and if you survive you sit to the winner's table.
    Later Russia must finally decrease the influence from hydrocarbon exports.

    Dependence on oil and gas by Russia is a NATO propaganda trope. The Russian government taxes resource extraction instead
    of the population. That is why the fraction of oil and gas is so high in the government revenues and why Russians
    pay a 13% flat income tax. The Russian economy is already sufficiently diversified since oil and gas account for less than
    13% of GDP. Listening to all the yapping on this subject one would think that it is over 80% of GDP.

    There is simply zero urgency for any adjustment away from oil and gas. No policies should be implemented to force
    the natural evolution of the Russian economy. The crisis is being manufactured by NATO propagandists who want Russia
    to act stupid and shoot itself in the head with moronic reforms that will put the tax burden on the general public. NATO
    wants political discontent in Russia and taxation increases are a great tool to achieve such discontent.

    The whole notion of forcing GDP diversification in a capitalist economy is nonsense. It is basically central planning. So
    NATO wants Russia to centrally plan itself into problems in the name of some BS about "too much" dependence on oil and
    gas.

    BTW, the current oil price is destroying the Canadian oil industry and putting Canada into a recession. It is also destroying
    the oil industry in the USA that relies on high prices to be viable. Clearly, this price slump is self-limiting. Sooner rather than
    later the supply will fall enough to create a major price rebound even if the world is in a recession.

    Hannibal Barca
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    Re: Russian Economy General News: #6

    Post  Hannibal Barca on Wed Jan 20, 2016 12:06 pm

    It accounts for 75% of exports. Enough said.

    sepheronx
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    Re: Russian Economy General News: #6

    Post  sepheronx on Wed Jan 20, 2016 12:21 pm

    But 80% of the Russian economy is based on domestic consumer demand.  Oil and gas account for 13% of that.  Export wise, its important, but not for overall economy.  Now its dropping considerably while export of machines (well, still energy related, from rosatom and powermachines) now outdoing defense sales, and defense sales still up.  Even Russian agriculture equipment exports jumped 1.5x last year.  I say that is a good move.  For oil and gas, I think it is in Russias best interest for long term contracts mixed in with LNG sales and selling petrol to countries like Iran.

    TheArmenian
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    Re: Russian Economy General News: #6

    Post  TheArmenian on Wed Jan 20, 2016 12:30 pm

    Hannibal Barca wrote:It accounts for 75% of exports. Enough said.

    Not anymore.

    Just do the math. It used to be 75% when the price of the barrel was above $100.
    Now that the price is around $27, it constitutes only about 25% of its exports.

    kvs
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    Re: Russian Economy General News: #6

    Post  kvs on Wed Jan 20, 2016 1:22 pm

    sepheronx wrote:But 80% of the Russian economy is based on domestic consumer demand.  Oil and gas account for 13% of that.  Export wise, its important, but not for overall economy.  Now its dropping considerably while export of machines (well, still energy related, from rosatom and powermachines) now outdoing defense sales, and defense sales still up.  Even Russian agriculture equipment exports jumped 1.5x last year.  I say that is a good move.  For oil and gas, I think it is in Russias best interest for long term contracts mixed in with LNG sales and selling petrol to countries like Iran.

    Apparently some people really believe that Russia's GDP is derived from exports. As you point out this is utter nonsense. Most of
    Russia's GDP is internally generated. Russia ain't no banana republic depending on a single commodity for its economy.

    And the point by TheArmenian is the coup de grace for this BS. Russia's economy would have collapsed by 40% if oil and gas exports
    accounted for 75% of the GDP.

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    Re: Russian Economy General News: #6

    Post  Regular on Wed Jan 20, 2016 1:58 pm

    Actually low oil prices only stimulate Russian economy and it helps with diversification. Far too long pipemen where the ones running the show.
    Bit of shock therapy doesn't hurt.

    PapaDragon
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    Re: Russian Economy General News: #6

    Post  PapaDragon on Wed Jan 20, 2016 3:45 pm

    Regular wrote:Actually low oil prices only stimulate Russian economy and it helps with diversification.  Far too long  pipemen where the ones running the show.
    Bit of shock therapy doesn't hurt.

    This^^^

    From earlier article I posted:


    ....The result is a marked fall in pressure on the rouble. Whereas on 17th December 2014 it fell to a low of 80 roubles to the dollar on a price for Brent crude of $58.70 a barrel, today (18th January 2016) as of the time of writing it is trading at just below this price despite a Brent crude price of under $28 a barrel.....

    http://russia-insider.com/en/business/russian-economy-2015/ri12274

    max steel
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    Re: Russian Economy General News: #6

    Post  max steel on Wed Jan 20, 2016 3:57 pm

    Remember how Russia used to be the world's biggest grain IMPORTER?
    Slumping Ruble Hits French Wheat as Competition Heats Up: Chart

    By Whitney McFerron
    (Bloomberg) --

    The slumping ruble is good news for Russian wheat exporters but bad for the French.
    Milling wheat futures dropped to a 15-month low of 163.75 euros ($179) a metric ton in Paris on Wednesday, as the euro reached the highest since 2014 against the ruble. That makes buying French supplies less appealing to those paying in other currencies.
    Russia, set to become the world’s biggest wheat exporter this season, competes with French grain in international markets.
    Production in both countries expanded this season, with French stockpiles expected to climb to a 16-year high after a record harvest, according to crop office FranceAgriMer.

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    Re: Russian Economy General News: #6

    Post  A Different Voice on Wed Jan 20, 2016 5:59 pm

    Vneshprombank looks like it won't be rescued. The Central Bank revoked its banking license. It was not a small bank.

    Vneshprombank's license revoked

    Until late September 2015 Russian rating agency RAEX had a A++ rating for Vneshprombank meaning “Exceptionally high (the highest) level of creditworthiness”.

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    Re: Russian Economy General News: #6

    Post  A Different Voice on Wed Jan 20, 2016 6:47 pm

    I've heard all kinds of numbers used to quantify the percentage of Russia's:
    1. budget revenue from hydrocarbons; and
    2. total export revenues from hydrocarbons.

    The US Energy Information Administration published a report addressing this based upon numbers for 2013. Here are some quotes from it:

    "Russia is a major exporter of crude oil, petroleum products, and natural gas. Sales of these fuels accounted for 68% of Russia's total export revenues in 2013, based on data from Russia's Federal Customs Service. Russia received almost four times as much revenue from exports of crude oil and petroleum products as from natural gas. Crude oil exports alone were greater in value than the value of all non-oil and natural gas exports."

    and

    "Oil and natural gas activities make up a large portion of Russia's federal budget. According to the Ministry of Finance, 50% of Russia's federal budget revenue in 2013 came from mineral extraction taxes and export customs duties on oil and natural gas."

    Not endorsing the report but it is an additional data point on the subject. Full report linked below.

    2013 hydrocarbon export & Budget revenue

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    Re: Russian Economy General News: #6

    Post  PapaDragon on Wed Jan 20, 2016 8:00 pm


    Originally from Christian Science Monitor, more reality creeping in...

    ''Cheap oil roils ruble, but Russia bears the pain''

    http://news.yahoo.com/cheap-oil-roils-ruble-russia-bears-pain-195430842.html

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    Re: Russian Economy General News: #6

    Post  sepheronx on Wed Jan 20, 2016 10:21 pm

    PapaDragon wrote:
    Originally from Christian Science Monitor, more reality creeping in...

    ''Cheap oil roils ruble, but Russia bears the pain''

    http://news.yahoo.com/cheap-oil-roils-ruble-russia-bears-pain-195430842.html

    Instant garbage article, both Christian science monitor and Yahoo news. Regardless if the Ruble drops to whatever to the USD, it really doesn't effect Russians much other than buying bullcrap items that were coined as "luxury" because some jerkoffs overcharge an asian product (iPhone). In many instances, other companies that export to Russia or make in Russia have lowered prices to be able to still meet a demand.


    Last edited by sepheronx on Wed Jan 20, 2016 10:26 pm; edited 1 time in total

    sepheronx
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    Re: Russian Economy General News: #6

    Post  sepheronx on Wed Jan 20, 2016 10:22 pm

    A Different Voice wrote:I've heard all kinds of numbers used to quantify the percentage of Russia's:
    1. budget revenue from hydrocarbons; and
    2. total export revenues from hydrocarbons.

    The US Energy Information Administration published a report addressing this based upon numbers for 2013. Here are some quotes from it:

    "Russia is a major exporter of crude oil, petroleum products, and natural gas. Sales of these fuels accounted for 68% of Russia's total export revenues in 2013, based on data from Russia's Federal Customs Service. Russia received almost four times as much revenue from exports of crude oil and petroleum products as from natural gas. Crude oil exports alone were greater in value than the value of all non-oil and natural gas exports."

    and

    "Oil and natural gas activities make up a large portion of Russia's federal budget. According to the Ministry of Finance, 50% of Russia's federal budget revenue in 2013 came from mineral extraction taxes and export customs duties on oil and natural gas."

    Not endorsing the report but it is an additional data point on the subject. Full report linked below.

    2013 hydrocarbon export & Budget revenue

    And it is instant bullshit because:
    http://www.awaragroup.com/upload/awara-study-russian-economy.pdf



    I did an article on propaganda from US institutions pointing out BS regarding their claims against Russia:

    http://rusnews.net63.net/2015/11/11/propaganda-at-its-finest-see-how-easily-foolish-us-organizations-can-be/


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    Re: Russian Economy General News: #6

    Post  kvs on Wed Jan 20, 2016 10:39 pm

    This retarded drivel about Russia's oil exports has to stop. It is nothing but spam in this thread.

    https://en.wikipedia.org/wiki/Comparative_advantage

    Russia exports oil because it has a comparative advantage in exporting it. Comparative advantage is the basis of international trade.
    All the people who insinuate that Russia should export microchips and cars are engaged in command economy thinking. They want
    Russia to force itself onto the world market in those goods and they want state planners to transform Russia's economy to enable this.
    This is not how free market economies work. At some point in the future Russia may well be exporting microchips but that is not
    something that can be forced via "reform". One does not create world class corporations and reputation by "reform". The only
    things that should concern the Russian government is to maintain stability via the proper legal and regulatory infrastructure.



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    Re: Russian Economy General News: #6

    Post  sepheronx on Wed Jan 20, 2016 10:44 pm

    kvs wrote:This retarded drivel about Russia's oil exports has to stop.   It is nothing but spam in this thread.

    https://en.wikipedia.org/wiki/Comparative_advantage

    Russia exports oil because it has a comparative advantage in exporting it.  Comparative advantage is the basis of international trade.
    All the people who insinuate that Russia should export microchips and cars are engaged in command economy thinking.   They want
    Russia to force itself onto the world market in those goods and they want state planners to transform Russia's economy to enable this.
    This is not how free market economies work.   At some point in the future Russia may well be exporting microchips but that is not
    something that can be forced via "reform".    One does not create world class corporations and reputation by "reform".   The only
    things that should concern the Russian government is to maintain stability via the proper legal and regulatory infrastructure.  



    Well, and it is also simply downright wrong on the information provided, which is the main point here.  The data is openly available yet people rather use data from US institutions and whatnot that is simply BS and not really proven, compared to well, the numbers that are brought to light from the Russian federal government and other institutions like Awara group whom is an investment company in Moscow that deals with international institutions of all types.

    As well, this was pointed out long ago the fact that Oil and Gas did not really constitute a huge part of Russia's economy and as was pointed out, the further it drops in value, the further it drops in terms of export % to total revenue gained from exports.

    But as you have noticed yourself, this is going to be a dead horse we will be beating for years or decades about Russia on this forums, if we are still around and if this forums is still up. Because as you have noticed, we have talked about this time and time again for years. Actually, the original thread for oil and gas industry in Russia was "The dependence on oil and gas".

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    Re: Russian Economy General News: #6

    Post  Vann7 on Wed Jan 20, 2016 11:58 pm



    Kudrin is again cheerleading the western Liberals... he says Russia economy
    will sink 6% in recession in 2016 if Oils start at $30 and then he went to say
    that never again Oil prices will return as high as a decade earlier. Shocked


    Kudrin: Russia’s budget deficit to amount to 6% of GDP in 2016, if price of oil is $30



    http://tass.ru/en/economy/851009


    however UN economic experts paint a totally different picture.
    They predict Russia 0.7% growth. with 10% inflation.

    http://tass.ru/en/economy/851073


    So which one is it? What people here predict will happen if things remain the same
    as today?



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    Re: Russian Economy General News: #6

    Post  sepheronx on Wed Jan 20, 2016 11:59 pm

    Vann7 wrote:

    Kudrin is again cheerleading the western Liberals... he says Russia economy
    will sink 6% in recession in 2016 if Oils start at $30 and then he went to say
    that never again Oil prices will return as high as a decade earlier.  Shocked


    Kudrin: Russia’s budget deficit to amount to 6% of GDP in 2016, if price of oil is $30



    http://tass.ru/en/economy/851009


    however UN economic experts paint a totally different picture.
    They predict Russia 0.7% growth. with 10% inflation.

    http://tass.ru/en/economy/851073


    So which one is it?  What people here predict will happen if things remain the same
    as today?



    Vann, give it up already.  As well, you need to kinda work on your reading comprehension.  6% growth in debt isn't an instant drop of 6% of economy.  It just means debt goes up which is quite possible.

    Kudrin said ridiculous claims last year too.  Who cares. The guy doesn't hold any position of authority or has any say in the matters of the economy of the country. He is a has been that was fired for his incompetence and is claimed to have had mental breakdowns. His value in input to the country is about as much as mine, yours, KVS or Charles Manson. Ronald McDonald has more say due to their investments in the country.

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    Re: Russian Economy General News: #6

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