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    Russian Economy General News: #8

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    Austin

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    Re: Russian Economy General News: #8

    Post  Austin on 16/05/17, 10:08 pm

    SPIEF 2017 https://forumspb.com/en/2017/sections/51/materials/266
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    miketheterrible

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    Re: Russian Economy General News: #8

    Post  miketheterrible on 18/05/17, 10:19 pm

    http://tass.com/economy/946210

    UN experts improve Russian economic outlook, note success of import substitution program

    Austin

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    Re: Russian Economy General News: #8

    Post  Austin on 19/05/17, 08:25 pm

    Kommersant says SAP 2018-2025 will cost 17 trillion rouble compared to SAP 2011-2020 cost of 19 Trillion rouble

    https://www.kommersant.ru/doc/3299342
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    franco

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    Re: Russian Economy General News: #8

    Post  franco on 20/05/17, 02:45 am

    IMF invited Russia to increase the age of retirement

    The Russian authorities should increase the age of retirement, the International Monetary Fund (IMF) believes.
    The pension reform, providing for a legislative increase in the retirement age, would help mitigate the impact of negative demographic trends on the labor market, while an appropriately designed budget rule would, as noted above, protect competitiveness by easing the impact of volatile oil prices on the exchange rate
    - said in the final statement of the IMF after the traditional visit of staff to Russia, RIA Novosti reported.

    According to the Pension Fund of Russia (PFR), in 2016 the number of pensioners was 43.3 million people, the expected number of pensioners in 2017 is 43.9 million people. Earlier, the Vedomosti newspaper reported that former head of the RF Ministry of Finance, head of the Center for Strategic Research (CSR) Alexei Kudrin prepared for President Vladimir Putin a strategy that suggests reducing the number of pensioners. According to the CSR, the age of retirement should be increased for women up to 63 years, for men - up to 65. The increase should be carried out with a step of half a year starting from 2019.
    The head of the Federation Council Committee on Social Policy Valery Ryazansky said that Kudrin's proposal to reduce the number of pensioners is unlikely to be realized in the near future, the savings from this "radical decision" are questionable. He also stressed that in the first place in the construction of the pension system should not be its economic parameters, but the life expectancy and active age of the Russians.
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    miketheterrible

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    Re: Russian Economy General News: #8

    Post  miketheterrible on 20/05/17, 10:35 am

    Austin wrote:Kommersant says SAP 2018-2025 will cost 17 trillion rouble compared to SAP 2011-2020  cost of 19 Trillion rouble

    https://www.kommersant.ru/doc/3299342

    When they say 19T rubles, I take it they don't mention the money being used from it to upgrade existing facilities and manufacturing bases?
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    kvs

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    Re: Russian Economy General News: #8

    Post  kvs on 20/05/17, 04:10 pm

    miketheterrible wrote:
    Austin wrote:Kommersant says SAP 2018-2025 will cost 17 trillion rouble compared to SAP 2011-2020  cost of 19 Trillion rouble

    https://www.kommersant.ru/doc/3299342

    When they say 19T rubles, I take it they don't mention the money being used from it to upgrade existing facilities and manufacturing bases?

    Kommersant is fake media. It was owned by Berezovsky and is terminally tainted with his 5th column filth.

    Austin

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    Re: Russian Economy General News: #8

    Post  Austin on 20/05/17, 08:51 pm

    Medvedev submitted to Putin the government's action plan for 2017-2025

    Подробнее на ТАСС:

    http://tass.ru/politika/4267127


    As the Prime Minister of the Russian Federation said, the action plan of the Cabinet of Ministers assumes that the Russian economy will enter the growth rates at the level and above the world average in the period 2019-2020


    BOCHAROV RUCEI, May 19. / TASS /. Prime Minister Dmitry Medvedev presented President Vladimir Putin with a government action plan for 2017-2025.

    The government's action plan until 2025 assumes that the Russian economy will enter the growth period at the level and above the world average in the period 2019-2020, the prime minister said.

    "In accordance with your instructions, the government has prepared a comprehensive plan - these are general approaches to how our economy and social sphere can develop in the period from 2017 to 2025, as you rightly said, bearing in mind the task that was set by the president in Message, "Medvedev said at a meeting with Russian President Vladimir Putin.

    "Namely, the output somewhere in the period 2019-2020 on the growth rate of our economy at the level of the world average and above the world average will enable our economy to develop faster and solve major social problems," the Prime Minister specified.

    "The plan itself is aimed at it, it includes quite a few different proposals," Medvedev said.

    They, he said, should be discussed, with a view to the parallel development of relevant proposals by the expert community. "We are in direct contact with them, we are discussing various proposals," the prime minister said.

    Importance of economic strategy

    Russia should have a clear plan for the development of the economy and social sphere, regardless of personalities and political schedule, the Russian president said.

    "I asked the government to prepare a plan for the development of the economy, determine the prospective areas of development, the means to achieve these goals for the period 2017-2025. I mean not only domestic political and internal political agenda, but also that our well-known blueprints for 2020 we Were forced to adjust them accordingly, and the 20th year is already around the corner, "Putin said.

    "Regardless of any personalities, regardless of even the internal political schedule, the country must have a clear and understandable plan for the development of the economy and social sphere," he said.

    He reminded that expert groups also work on the relevant plan. "But, of course, the work that was carried out by the government of the Russian Federation should be at the heart of all the proposals made," the Russian president said.

    He suggested the Prime Minister to discuss the ideas of the government, and then the final version will be adopted on the readiness and development of experts.

    Draft strategy from the government

    The head of the Ministry of Economic Development, Maxim Oreshkin, said earlier that the government's draft plan for the development of the economy until 2025, which involves the implementation of measures to accelerate growth to the world average, should ensure predictability of economic conditions for doing business in Russia and for citizens. The key factor for accelerating the growth rate should be the topic of increasing labor productivity.

    To develop the plan, the Ministry of Economic Development and Trade has created 10 working groups in various areas, including tax policy, support for exports,

    In February, Medvedev presented several key areas of the plan. So, according to the prime minister, one of the main tasks for the period until 2025 is to ensure the stability of macroeconomic dynamics and the system of tax payments. Another block of measures concerns the improvement of efficiency in the sphere of employment. The third most important task the head of government called the creation of a smart economy, based on the intellectual potential of the nation, on the achievements of science and technology.

    The fact that the draft government program for economic development is in the final stages of preparation, the president said on May 15, answering journalists' questions. At the same time he said that in the near future the Prime Minister will represent her.

    Work of experts


    In addition to the Cabinet, other experts are working on development programs, in particular Stolypin Club, as well as the Center for Strategic Research (CSR), headed by former Finance Minister and Deputy Chairman of the Economic Council under the President of the Russian Federation Alexei Kudrin.

    Last week, during a meeting with journalists, the president promised that not only will they familiarize themselves with all the proposals of experts in the Kremlin, but they will also look at "what can be done on the basis of these proposals as a way of strategic development of the economy and social sphere of our country for the coming years" .

    Putin did not agree with the view that such programs often remain on paper and are not being implemented. According to him, the strategies develop the direction of movement in development and determine priorities, even if the economic reality makes its own adjustments.

    Kudrin's plan


    The CSR also intends to soon submit to the head of state its proposals on the development strategy of Russia until 2025. As Kudrin told journalists, the corresponding meeting is scheduled for the end of May.

    According to Kudrin, unlike previous programs in the new strategy, issues of social development, community values, judicial and law enforcement system, integration of the Russian Federation into international programs are touched upon.

    The head of the CSR noted that he will hold public wide discussions on important blocks of the program. He explained that prior to this discussion of the strategy went on among professionals in closed mode, albeit in a broad format. The next round of discussions can also be held with the involvement of the media, he said.

    On May 15, answering journalists' question about why the draft strategy of the CSR is not discussed publicly, Putin advised the media representatives to "blame Kudrin" for this. The head of state spoke in favor of such documents being submitted for broad public discussion.
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    miketheterrible

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    Re: Russian Economy General News: #8

    Post  miketheterrible on 20/05/17, 09:40 pm

    I see Kudrin is still on the same stupid path about "integrating Russia into international programs". I wonder how he will propose this when there are sanctions on Russia by the international society?

    It seems that Putin's patience with the guy is running thin and his program will probably not be implemented. Neither will Stolypin Club's program. Either way, this whole plan system is bullshit and wont work since the economy constantly adjusts every year to development and roadblocks.

    Things will just continue to do the same thing as now.

    Austin

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    Re: Russian Economy General News: #8

    Post  Austin on 21/05/17, 11:50 am

    For a month the Central Bank of Russia increased the volume of gold reserves by 0.35% or about 6 tons

    https://sdelanounas.ru/blogs/93720

    The Bank of Russia in April 2017 purchased 200,000 troy ounces (about 6 tons) of gold, according to the Central Bank.

    As of May 1, the volume of stocks of monetary gold in international reserves reached 54.2 million ounces (1.686 tons), the bank said. As of April 1, this figure was 54 million ounces (about 1,680 tons).

    At the same time, the value of gold in reserves, as follows from the materials of the Central Bank, increased by 1.6%, to $ 68.653 billion.

    Austin

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    Re: Russian Economy General News: #8

    Post  Austin on 21/05/17, 01:53 pm

    What do you make of this


    Austin

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    Re: Russian Economy General News: #8

    Post  Austin on 22/05/17, 02:18 pm

    CSR Board Chairman Alexei Kudrin on current economic fallacies

    Five dangerous myths

    https://www.kommersant.ru/doc/3303785

    Austin

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    Re: Russian Economy General News: #8

    Post  Austin on 22/05/17, 07:46 pm

    The size of the country's public debt is falling rapidly

    https://sdelanounas.ru/blogs/93751/


    Financial and analytical portal Investbrothers with reference to the Ministry of Finance of the Russian Federation said that Russia continues to successfully repay its public debt to creditors. In April 2017 the Russian Federation paid on bonds of two billion dollars. Thus, at the beginning of May 2017 the total debt of the Russian Federation amounted to only 48.6 billion dollars, equivalent to only 3.2% compared to the GDP of the state. However, of this amount, 35 billion related to bond loans, 11.7 - in state guarantees, and 1.8 to other small loans.

    Investbrothers reports that the repayment of the remaining debt will be made over the next 26 years.

    Next year Russia will give creditors $ 3.5 billion in 2019 - 1.5, and in 2020 - 4.3 billion.

    Analytical portal said that since last year the level of public debt is kept at the same level with minor variations. However, over the past three and a half years, the total amount was reduced to $ 7 billion, or 12.5%. At the end of the analytical material Investbrothers concluded that today in Russia there are no major problems with the servicing and repayment of debt. Moreover, you can safely increase the amount of borrowed funds, if necessary, of the Russian Federation.

    Recall that the US national debt for 2017 is equal to 19 trillion dollars, and the main economic department has sounded the alarm, because the situation with the credit obligations raises some concerns. In this regard, in the United States are seriously considering the possibility of approval of Ultra-long bonds have maturity dates ranging from 40 to 100 years. At the same time now the maximum term is 30 years.

    Austin

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    Re: Russian Economy General News: #8

    Post  Austin on 27/05/17, 09:30 pm

    Trump to Keep Russia Sanctions, Economic Adviser Cohn Says

    https://www.bloomberg.com/politics/articles/2017-05-26/trump-to-maintain-russia-sanctions-economic-adviser-cohn-says

    President Donald Trump will maintain Obama-era sanctions against Russia over its role in the Ukraine conflict and may even strengthen them, his top economic adviser said.

    “We’re not lowering our sanctions on Russia,” White House National Economic Council director Gary Cohn told reporters Friday in Taormina, Sicily. “If anything, we would probably look to get tougher on Russia.”
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    miketheterrible

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    Re: Russian Economy General News: #8

    Post  miketheterrible on 27/05/17, 09:33 pm

    he can keep making them as tough as he wants. It aint going to do shit all in the future. Already the UN economic counsel admits that Russia's growth is thanks to import substitution and domestic consumption demand over the sanctions. This will just further strengthen that or even force Russia to reciprocate by increasing the prices on strategic resources like Titanium which US constantly needs.
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    PapaDragon

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    Re: Russian Economy General News: #8

    Post  PapaDragon on 29/05/17, 11:02 pm


    Good article:

    Best To Assume Russia Sanctions Last Forever

    https://www.forbes.com/sites/kenrapoza/2017/05/26/best-to-assume-russia-sanctions-last-forever/#6c2439b07090


    Also great pic, had to post it separately:
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    kvs

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    Re: Russian Economy General News: #8

    Post  kvs on 29/05/17, 11:20 pm

    PapaDragon wrote:
    Good article:

    Best To Assume Russia Sanctions Last Forever

    https://www.forbes.com/sites/kenrapoza/2017/05/26/best-to-assume-russia-sanctions-last-forever/#6c2439b07090

    All the spew from 2014 on about how Russia's economy is going to collapse and now basically an admission of
    epic failure (i.e. Russia's economy has been structurally improved and stimulated by the sanctions) as if it is
    ho-hum. Yeah, whatever.

    Austin

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    Re: Russian Economy General News: #8

    Post  Austin on 30/05/17, 08:27 pm

    "If you look at the state of the Russian economy today it is difficult to call it a superpower." -- EU foreign policy chief

    "Russia is investing a lot when it comes to defense and military activities but when it comes to economic power – forget it." -- Mogherini

    https://twitter.com/russiandefpolic
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    miketheterrible

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    Re: Russian Economy General News: #8

    Post  miketheterrible on 30/05/17, 08:54 pm

    Austin wrote:"If you look at the state of the Russian economy today it is difficult to call it a superpower." -- EU foreign policy chief

    "Russia is investing a lot when it comes to defense and military activities but when it comes to economic power – forget it." -- Mogherini

    https://twitter.com/russiandefpolic

    is this going to be a trend with you? Posting everything what some nitwit of a failing economic entity says about Russia? Instead of worrying about Russia's economy, she should worry about the failings of the EU.

    On contrary, at least Russia is growing naturally economically and doesn't require raising more QE to survive like EU does.

    Austin

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    Re: Russian Economy General News: #8

    Post  Austin on 30/05/17, 09:30 pm

    miketheterrible wrote:
    Austin wrote:"If you look at the state of the Russian economy today it is difficult to call it a superpower." -- EU foreign policy chief

    "Russia is investing a lot when it comes to defense and military activities but when it comes to economic power – forget it." -- Mogherini

    https://twitter.com/russiandefpolic

    is this going to be a trend with you? Posting everything what some nitwit of a failing economic entity says about Russia? Instead of worrying about Russia's economy, she should worry about the failings of the EU.

    On contrary, at least Russia is growing naturally economically and doesn't require raising more QE to survive like EU does.

    I guess you miss the humour there in her statement Laughing
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    kvs

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    Re: Russian Economy General News: #8

    Post  kvs on 30/05/17, 09:48 pm

    miketheterrible wrote:
    Austin wrote:"If you look at the state of the Russian economy today it is difficult to call it a superpower." -- EU foreign policy chief

    "Russia is investing a lot when it comes to defense and military activities but when it comes to economic power – forget it." -- Mogherini

    https://twitter.com/russiandefpolic

    is this going to be a trend with you? Posting everything what some nitwit of a failing economic entity says about Russia? Instead of worrying about Russia's economy, she should worry about the failings of the EU.

    On contrary, at least Russia is growing naturally economically and doesn't require raising more QE to survive like EU does.


    The anti-Russian trash talk originates from insecurity about Russia's growing might both economic and military. If Russia was really nothing
    then all these ubermenschen would never yammer about it. It would be like stating the obvious. For anyone who will accuse me of being
    a Russian fanboi, I can trot out all the media BS after 2014 which was predicting Russia's collapse. This is not some minor oversight, this
    proves that NATO perceptions about Russia are detached from reality.

    As for the alleged economic might of the EU and America, people need to understand that the GDP includes extra-territorial economic activity.
    So all of the neo-colonial assets of these historical colonial powers get counted as part of their economies. Living in the west, I can confirm
    that these extra-territorial assets do not translate into territorial wealth for individuals. So all the GDP per capita measures are utter
    BS. The typical family in the USA does not make $150,000 per year because the father, mother and child do not earn $50,000 each. In
    fact, the average family income in the USA is $73,000. So the per capita GDP is irrelevant.

    Google is an anti-Russian propaganda portal. I tried to look for "average family income russia" and it feeds me salary links and BS stories
    about poverty. The typical western politician and fake stream media consumer sap really thinks that a 50% forex rate drop translates into
    a 50% drop in income. What retarded nonsense. The late 2014 and early 2015 inflation spike cost Russians about 13% of their income
    level in 2015 (wages increased by 3%). There was no 50% inflation in 2015 that has permanently lowered Russian real incomes by 50%.
    As of 2017 there is net income growth again.
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    kvs

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    Re: Russian Economy General News: #8

    Post  kvs on 30/05/17, 10:09 pm

    Austin wrote:"If you look at the state of the Russian economy today it is difficult to call it a superpower." -- EU foreign policy chief

    "Russia is investing a lot when it comes to defense and military activities but when it comes to economic power – forget it." -- Mogherini

    https://twitter.com/russiandefpolic

    These uneducated morons don't know that forex rates are not actual measures of economic activity. That's why we have
    something called the purchasing power parity adjustment. The real story is that Russia's economy is always underestimated and
    every bum f*ck backwater in the west is treated as if it has the per capita economic intensity of the most developed region. But
    for some reason all these backwaters look like backwaters and don't give off that rich vibe.

    Claiming to be the wealthiest and portraying your targets of hate as being poor is lucrative propaganda. Humans are idiots for such
    brainwashing and will conclude that the richer side is the Godly side. So the west's 5th column in Russia does a lot to portray Russia
    as dirt poor (you can find them posting on sites such as Quora where they basically defame all Russians as sloths living in cardboard
    boxes). The CBR exaggerates Russia's true inflation rate by including long term structural transition pricing as if it was pure inflation
    (i.e. the reference point is zero during the Soviet period and not an equilibrated market price). The CBR also sabotages Russia's
    economy by imposing a loan shark prime rate based on its fraudulent CPI "estimate". People are not going to borrow at rates over 15%
    to buy a car. (Note that actual interest rates for consumers are always higher than the prime CBR rate).

    At the same time, there is all sorts of fraud in the west which deliberately understates the inflation rate (e.g. hedonics adjustments).
    When you see a 2% GDP growth in America, it is actually closer to 2% GDP contraction since the inflation is grossly understated. The
    GDP growth is obtained by using the CPI and PPI to form the GDP deflator which scales the estimated nominal GDP.

    GDP growth = (GDP(current year)/GDP_deflator) - GDP(previous year).

    Depending on the GDP deflator GDP growth is either positive or negative. Using a 2% inflation rate gives a deflator of about 1.02 which
    can obviously lead to an inference of growth compared to a deflator of 1.06. The US inflation is closer to 6%. Don't believe me? Look
    at the food price increases and rent ain't getting cheaper. (In the US the producer price index, PPI, is very similar to the CPI.)


    Austin

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    Re: Russian Economy General News: #8

    Post  Austin on 30/05/17, 10:17 pm

    Good Post , Yes 6-7 % is the figure which my friend in US stays for many decades said is the real figure , Seem the size of the product you purchase also keeps growing smaller or some tricks like making some part hollow is done.

    Here is another joke from saudi

    Saudi Finance Minister: “I Wouldn't Care If The Oil Price Is Zero"

    http://oilprice.com/Energy/Oil-Prices/Saudi-Finance-Minister-I-Wouldnt-Care-If-The-Oil-Price-Is-Zero.html

    For a country whose 90 % of Budget income is from Oil thats a joke ...They just produce two things in abundance Oil and Terrorism.
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    Kimppis

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    Re: Russian Economy General News: #8

    Post  Kimppis on 30/05/17, 11:28 pm

    Kind off-topic tbh, but two of the guy's ("Russiadefpolicy", obviously, not Mogherini) tweets from last month:

    "Good Guardian article on #Navalnyy and his effort to crack the Putin regime and bring real politics back to Russia."

    And:

    "Hope Putin is lying in bed tonight in Novo-Ogarevo wondering what it would be like to be Maduro right now."

    Nice Putin-derangement syndrome. "Real politics," "regime". Jesus Christ... comparing Venezuela to Russia? Some Russia expertise right there.  

    I mean, I knew the guy wasn't Pro-Russian, but holy shit!? Funnily enough, he also really seems to despise Trump and believes in that Russiagate conspiracy BS. What a clown.  

    Austin, why on earth did you even post that? First of all, the Mogherini tweets are like 2 weeks old... And how are they relevant, really? I don't even think Russia even wants to be a "superpower", whatever that means. A "great power", sure...

    And kvs, is your search term in English? Then you should mostly blame the English-language media and other publications, not Google itself.

    EDIT: Is the "Zak" guy that some have mentioned in the space program thread and "russiadefpolicy" the same person? Sorry, I have no idea. Stopped following that blog (russiadefpolicy) really quickly. In any case, he certainly sounds like a Russian pro-Western liberal (I always thought he was foreigner, but it's been a really long time since I read the blog, so...).
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    PapaDragon

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    Re: Russian Economy General News: #8

    Post  PapaDragon on 31/05/17, 01:17 am

    Kimppis wrote:...............
    Is the "Zak" guy that some have mentioned in the space program thread and "russiadefpolicy" the same person? Sorry, I have no idea. Stopped following that blog (russiadefpolicy) really quickly. In any case, he certainly sounds like a Russian pro-Western liberal (I always thought he was foreigner, but it's been a really long time since I read the blog, so...).

    If his name is Anatoly then it's probably him, who knows, wouldn't be surprised given his track record.... dunno




    In the meantime here is some cold hard reality from Observer of all places when it comes to Russia, economy, gas and all that good stuff. Ignore the title, article is about money not Putin:


    Vladimir Putin, Energy Tsar, Couldn’t Care Less About Your Opinion

    Russia's new motto: 'If you don't like us, we have other customers'


    http://observer.com/2017/05/russia-natural-gas-pipelines-turkstream-nordstream2/

    “Russia is nothing but a gas station masquerading as a country,” Sen. John McCain famously said in 2014. Vladimir Putin is not swayed by the insults. By 2019, five years after the birth of that catchy phrase by the Arizona Republican, McCain will hopefully come up with a smarter quip.

    Putin’s plan is to turn Russia into the world’s energy superpower—and it’s working. Russia is sitting on so much natural gas that it will take more than half a century to sell it to the world.

    In the beginning of 2017, Gazprom, Russia’s natural gas giant, reported that its natural gas production for 2016 was 419.1 billion cubic meters. Its discovered natural gas reserves were estimated at an astronomical 36.4 trillion cubic meters. According to Vsevolod Markelov, deputy head of Gazprom, the demand for Russian natural gas in 2017 will increase 2.7 percent to 430.44 billion cubic meters.

    Russia has been building many pipelines to deliver its natural gas to every corner of Eurasia. Two weeks ago, Gazprom reported that it began to lay down the first offshore segments of the underwater pipelines that will deliver Russian natural gas across the Black Sea to Turkey.

    “Today, we have started the practical stage of the TurkStream project—the subsea laying of the gas pipeline. The project is being implemented strictly according to the plan, and by the end of 2019 our Turkish and European consumers will receive a new and reliable route for the import of the Russian natural gas,” Gazprom CEO Alexei Miller said on May 7, RIA Novosti reported.

    Two days before this announcement, Miller promised Putin that Gazprom would start work on the marine part of the pipeline. “The growth of Russian natural gas supplies to the European market continues,” he said to his boss. “Since the beginning of 2017, deliveries to the European market have grown by 15 percent compared to the same period of the last year, or in absolute terms by 8.6 billion cubic meters of natural gas.”

    He said that the European appetite for Russian natural gas has been growing despite political frictions. According to Gazprom’s 2016 report, exports to Turkey grew by 29.1 percent, to Italy by 41.5 percent, to Serbia by 41 percent, to Bulgaria by 16.8 percent, to Hungary by 27.4 percent, and to Austria by 69.2 percent.

    Currently, one-third of the natural gas consumed by Europe comes from Russia.

    TurkStream will have two parallel pipeline threads: one with the natural gas for Turkey and another one for European countries. Each thread will carry 15.75 billion cubic meters of Russian natural gas per year, as stated by the intergovernmental contract. The commissioning of both threads is planned for December 30, 2019. The length of the sea section of the project will be about 920 km, and the land segment is about 200 km.

    Germany, despite being a frontrunner in imposing economic sanctions on Russia, gave its definite German das Ja to the building of another pipeline from Russia into Germany. It will be laid on the bottom of the Baltic Sea, disregarding the fierce opposition from Poland, the Baltic states and Ukraine.


    Nord Stream-2 pipeline construction will start in 2018 and will be finished by the end of 2019. The two “Nord Stream-2” threads will transfer 27.5 billion cubic meters of gas per year, doubling the capacity of the first Nord Stream, the route of which they will basically follow.

    In 2016, the first Nord Stream was full to 80 percent of its capacity. 43.8 billion cubic meters of Russian natural gas were sent from Russia directly into Germany—and this is just the beginning of Vladimir Putin’s ambitious project.

    Some days ago, Gazprom reported that it had finished construction of the 745-kilometer part of the Power of Siberia pipeline. It will start its operation with the delivery of 38 billion cubic meters of Russian natural gas per year, which can be increased to 61 billion cubic meters in case the Russian giant decides “to buy natural gas from other Russian natural gas producers.” (Or if Putin decides to cut the shipment of natural gas to Europe in favor of Chinese partners.)

    The contract between Gazprom and Chinese CNPC was signed in 2015. The start of the supply is scheduled for 2019-2021.

    Power of Siberia-2 project is being discussed with China also—with an additional 30 billion cubic meters of natural gas per year to be delivered to the country.

    Contacts with Turkey and China are signed for a 30-year term, and Germany’s is signed for a 50-year term.

    Then, there is India. The delivery of 2.5 million tons of LNG to India by Gazprom (the equivalent of 3.5 billion cubic meters of natural gas) will start in 2018. The plans of building a pipeline to India as an extension to Power of Siberia-2 or from Iran are also under consideration.

    Today, India ranks fourth in the world in energy consumption, but the share of natural gas in the country’s energy balance is still very low—slightly more than 7 percent.

    And it does not stop there. Russia and Japan are actively discussing construction of the natural gas supply pipeline from Sakhalin (a Russian island in the Pacific Ocean) to Japan. The 1,500 km underwater pipeline will be able to provide Japan with 20 billion cubic meters of natural gas per year, which is 17 percent of the Japan’s LNG imports.

    Is this just business for Putin? Of course not; political interests are intertwined.

    First, China, Turkey and Russia are discussing a way to conduct the mutual trades using national currencies only, which will exclude the U.S. dollar from these deals. To kick the U.S. Federal Reserve Service in its teeth is the long-held dream of many of Putin’s economic advisers.

    Second, Turkey will become a European energy hub, which will increase the country’s political weight on the continent. Its role will be dependent on Russia’s good will.

    Third, Russia’s new motto will be, “If you don’t like us, we have other customers.” Can you imagine the map of Europe with one third blacked-out?

    From 2019 into the foreseeable future, Vladimir Putin will decide which citizens of which countries in Europe will have their electricity on, their houses warm in the winter, their coffee pots boiling and their businesses running. Russia will wave off economic sanctions like annoying mosquitoes, and it will punish governments that have the audacity to impose them with painful “asymmetrical” punches.

    “Europe must realize that the time when she was a teacher and Russia was a student have been long gone,” Russia’s Foreign Minister Sergei Lavrov said before his meeting with President Donald Trump.


    The ambitious plans to ship American LNG to Europe will be put to rest for a long while. Alexei Miller, Gazprom’s CEO, put it this way: “The [Nord Stream-2] pipeline is beneficial as far as the price for LNG is concerned. And it will be so in the future.”

    And there is also a cherry on top for Putin: The new pipelines will make the Ukrainian pipelines’ role in the European economy null and void in European politics. The contract between Gazprom and Naftogaz, the Ukrainian company that owns her pipelines, will expire at the end of 2019.

    Last year, Gazprom sent about 82 billion cubic meters of natural gas through Ukrainian territory for its European customers, filling the Ukrainian pipeline to 56 percent of its capacity.

    Sergei Kobolev, head of Naftogaz, said that the construction of the new Nord Steam-2 and TurkStream pipelines would deprive Ukraine of $2 billion a year of transit fees that Ukraine collects from Russia. The construction of the pipelines will lower the market capitalization of Ukrainian pipelines by 5 times—down from $30 billion to $5 billion.

    Around $2 billion is 10 percent of Ukraine’s hard currency income. In the foreseeable future, Ukraine’s reserves will hardly ever exceed the $15 billion that the country currently has in its reserves, which was stocked in large part due to the loans from international financial organizations. Last year, for the first time in its history, Naftogaz showed a net profit of $984 million due to increase of the transportation of Russian natural gas to Europe, but it needs $10 billion to repair its overused, rusty pipelines—an unimaginable sum for the broke country.

    The market value of Naftogaz in 2019 will most likely not be $5 billion, but it also won’t be $0.

    Signs of despair in Kiev are obvious.

    Right after the beginning of the work on the sea part of the TurkStream, the representative of Ukrainian Naftogaz “unofficially” stated in the interview to the German DPA news agency that, starting in 2020, it was ready to decrease the 10 percent transportation fee that Russia pays for the flow of natural gas through Ukrainian territory.

    Gazprom says that it does not rule out sending its product through Ukrainian territory after 2019 to its customer countries that border Ukraine—but it will be a much smaller amount of “probably” 15 billion cubic meters a year. And, of course, as Miller said, “[only] if it will make sense economically.”

    The reality of the 21st century—as Putin sees it—is that energy is a political instrument. Political alliances and the rise and fall of the international importance of particular countries will change in accordance with the energy supply routes.

    You can call Russia a gas station masquerading as a country, but from 2019 on, Putin will not care less. By then, Russia will have so much money that Putin will be able to swim in it like Scrooge McDuck. He knows that one can insult one’s local gas company any way one wants. One can curse it, spit on the bill, complain to neighbors and swear to switch to wind power. But at the end of the month, one still has to pay the bills.
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    kvs

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    Re: Russian Economy General News: #8

    Post  kvs on 31/05/17, 02:18 am

    The article has the usual anti-Russian bent. Because Russia wants diversity of customers and not be trapped with a bunch of
    EU haters who accuse Russia of "blackmail" for selling natural gas at rates cheaper than Norway, it must be all about Putin and
    politics. Utter, retarded BS. Russia is clearly defending itself from NATO's politically motivated extortion attempts such as the
    recent EU effort to suppress Nord Stream II. The EU was basically demanding that Russia ship via Ukraine and keep paying the
    Kiev parasites transit fees and be exposed to routine Kiev blackmail and natural gas theft. F*ck the EU, indeed.

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    Re: Russian Economy General News: #8

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