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    Russian Economy General News: #6

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    Viktor

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    Re: Russian Economy General News: #6

    Post  Viktor on Sun Dec 27, 2015 8:21 am

    Nice Very Happy

    "Rostec" to build and update the TPP in Iran for $ 5 billion

    Company "Tekhnopromexport", part of "Rostec", took up a contract for construction of two power stations in Iran and supply power equipment for $ 4.8 billion. wrote:

    Gref: Russian companies strengthen their reputation

    Russia and domestic companies to pay their debts, despite sanctions, demonstrating its partners reliability and strengthening its good reputation, said the program "Opinion" the head of Sberbank German Gref.


    Turkmenistan revive the Caspian gas pipeline project

    Russia and Iran are preparing a scheme of mutual settlements in national currencies

    Germany approved the creation of the joint venture "North Stream-2"

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    sepheronx

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    Re: Russian Economy General News: #6

    Post  sepheronx on Mon Dec 28, 2015 8:41 am

    Man Viktor, I missed you. You need to stay on the forums more.  Thanks for the links.  Mind if I reference you on the website?

    http://tass.ru/en/economy/847239

    Far east attracts over $2B in additional investments since free port title.
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    A Different Voice

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    Re: Russian Economy General News: #6

    Post  A Different Voice on Mon Dec 28, 2015 3:28 pm

    Amid Turkey food ban, Russian government threatens Russian food producers and suppliers to prevent food price hikes.

    food producers threatened on prices

    Such threats are counterproductive to Russia's national interests. If a government wants to maximize import-substitution, it must allow local producers to receive market prices for their local goods. Price restrictions/pressure on locally produced food will result in less of such price restricted/pressured food being produced. Banning certain foods that are produced in Turkey will result in increased prices for the Russian made versions.  This should result in Russian producers of such foods obtaining higher prices. Such higher prices will result in increased future Russian production of the banned foods.
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    kvs

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    Re: Russian Economy General News: #6

    Post  kvs on Mon Dec 28, 2015 7:44 pm

    A Different Voice wrote:Amid Turkey food ban, Russian government threatens Russian food producers and suppliers to prevent food price hikes.

    food producers threatened on prices

    Such threats are counterproductive to Russia's national interests. If a government wants to maximize import-substitution, it must allow local producers to receive market prices for their local goods. Price restrictions/pressure on locally produced food will result in less of such price restricted/pressured food being produced. Banning certain foods that are produced in Turkey will result in increased prices for the Russian made versions.  This should result in Russian producers of such foods obtaining higher prices. Such higher prices will result in increased future Russian production of the banned foods.

    These are not price controls. This is law enforcement against gougers and scum who are trying to rip off the consumer by pretending
    that they are selling imported food instead of local production. There is zero basis for them to jack up prices by 100% if they did not
    pay for it in dollars but paid for it in rubles. These sorts of parasites should pack their bags for some other land of opportunity if they
    are not happy to play fair. Market prices are not about gouging.
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    sepheronx

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    Re: Russian Economy General News: #6

    Post  sepheronx on Mon Dec 28, 2015 8:46 pm

    A Different Voice wrote:Amid Turkey food ban, Russian government threatens Russian food producers and suppliers to prevent food price hikes.

    food producers threatened on prices

    Such threats are counterproductive to Russia's national interests. If a government wants to maximize import-substitution, it must allow local producers to receive market prices for their local goods. Price restrictions/pressure on locally produced food will result in less of such price restricted/pressured food being produced. Banning certain foods that are produced in Turkey will result in increased prices for the Russian made versions.  This should result in Russian producers of such foods obtaining higher prices. Such higher prices will result in increased future Russian production of the banned foods.

    as KVS pointed out, many producers in Russia have been price gouging since then as competition has been reduced. At that, even the food producers are going to lower their prices anyway as people have actually dropped buying a lot of foods. How you ask? http://naturalhomes.org/naturalliving/russian-dacha.htm

    Companies do not operate as you think in the so called "free market". Russia gave a ton of land and gave a ton of incentives for agribusiness and yet prices have increased (while production of meats and dairy increased upwards to 25% compared to last year) and yet, prices are still quite high. Some people are taking advantage of the market situation.

    Vann7

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    Re: Russian Economy General News: #6

    Post  Vann7 on Tue Dec 29, 2015 1:26 am

    kvs wrote:This crap about Russia's reserve fund will keep on coming back like a zombie.   For future reference, the only
    thing that matters is the deficit level of the Russian federal budget and whether Russia can finance (i.e. borrow)
    this deficit.   The reserve fund is currently buffering the deficit and even if it is totally depleted, it is not
    the only instrument to deal with the deficit:

    1) Russia could raise taxes, specifically the ridiculously low 13% flat personal income taxes.  If people want
    western style social programs, they need to pay western style taxes and not Soviet fantasy taxes.

    2) Russia can you know, like, borrow money to cover the deficit.  This is what every other f*cking country
    does.

    So i was the only one that read the news as a good thing? of reserve funds depleting b 2019
    if the Russia does not balance the budget ?  

    In other words the way i read it..was that Russia have 2 years to balance its budget..
    If wants to continue not balancing the budget and with others remarks.. also not making any new loan or not raising taxes.

    So all Russia needs to do is either balance the budget ,cut the overspending in social programs,
    that only benefits classes that do not contribute anymore to the economy. like old people.
    and end the non sense of giving for free money to veterans in other nations ,that are not
    Russian citizens. or cut the sports spendings , parties and they could even reduce the salary by 10% in all Government agencies or increase the taxes by another 3% to 5%?

    Seems like the taxes thing is the more elegant solution . or different taxes per item or product.
    that is food pay no more tax.. but luxury and cars and gasoline could take advantage of the cheap oil prices . to increase the tax. Also the privatization of things , by half , the Gazprom way will attract new money. 51% Russia gov and 49% private. Also Russia can take advantage of its weak Ruble to attract Tourism world wide and business investment too.
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    Militarov

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    Re: Russian Economy General News: #6

    Post  Militarov on Tue Dec 29, 2015 5:25 am

    sepheronx wrote:
    A Different Voice wrote:Amid Turkey food ban, Russian government threatens Russian food producers and suppliers to prevent food price hikes.

    food producers threatened on prices

    Such threats are counterproductive to Russia's national interests. If a government wants to maximize import-substitution, it must allow local producers to receive market prices for their local goods. Price restrictions/pressure on locally produced food will result in less of such price restricted/pressured food being produced. Banning certain foods that are produced in Turkey will result in increased prices for the Russian made versions.  This should result in Russian producers of such foods obtaining higher prices. Such higher prices will result in increased future Russian production of the banned foods.

    as KVS pointed out, many producers in Russia have been price gouging since then as competition has been reduced.  At that, even the food producers are going to lower their prices anyway as people have actually dropped buying a lot of foods.  How you ask? http://naturalhomes.org/naturalliving/russian-dacha.htm

    Companies do not operate as you think in the so called "free market".  Russia gave a ton of land and gave a ton of incentives for agribusiness and yet prices have increased (while production of meats and dairy increased upwards to 25% compared to last year) and yet, prices are still quite high.  Some people are taking advantage of the market situation.

    Food prices spiked in the US during 40s too, coz huge amounts went for war effords. Its like that in capitalism.
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    kvs

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    Re: Russian Economy General News: #6

    Post  kvs on Tue Dec 29, 2015 8:15 am

    Vann7 wrote:
    kvs wrote:This crap about Russia's reserve fund will keep on coming back like a zombie.   For future reference, the only
    thing that matters is the deficit level of the Russian federal budget and whether Russia can finance (i.e. borrow)
    this deficit.   The reserve fund is currently buffering the deficit and even if it is totally depleted, it is not
    the only instrument to deal with the deficit:

    1) Russia could raise taxes, specifically the ridiculously low 13% flat personal income taxes.  If people want
    western style social programs, they need to pay western style taxes and not Soviet fantasy taxes.

    2) Russia can you know, like, borrow money to cover the deficit.  This is what every other f*cking country
    does.

    So i was the only one that read the news as a good thing? of reserve funds depleting b 2019
    if the Russia does not balance the budget ?  

    In other words the way i read it..was that Russia have 2 years to balance its budget..
    If wants to continue not balancing the budget and with others remarks.. also not making any new loan or not raising taxes.

    There is a lot of propaganda propagating on this subject. The 2016 budget of the Russian Federation
    is as follows: $200 billion revenues and $230 billion expenditures. So the deficit is $30 billion.
    BTW, I can use dollars for this comparison or any other currency without introducing any
    misinterpretation. The reserve fund is $371 billion dollars. If Russia uses the reserve fund to
    balance the budget it has over 12 (twelve) years to deplete the reserve fund if the
    deficit is $30 billion per year.

    However on the timescale of 12 years there will an economic boom, guaranteed. There is not
    indication that Russia is sliding into some sort of terminal depression. So all the propagators
    of these claims about the reserve fund being depleted by 2019 (i.e. 4 years) are liars.


    So all Russia needs to do is either balance the budget ,cut the overspending in social programs,
    that only benefits classes that do not contribute anymore to the economy. like old people.
    and end the non sense of giving for free money to veterans in other nations ,that are not
    Russian citizens. or cut the sports spendings , parties and they could even reduce the salary
    by 10% in all Government agencies or increase the taxes by another 3% to 5%?

    They need to do nothing. NATO countries run up deficits and debts with wild abandon yet
    I see no hysterical calls for balanced budgets. Federal revenues will increase in the coming
    years just as they did after the last recession in 2009. So the deficit will shrink or even become
    a surplus. Running around cutting this and that is just stupid pandering to the 5th column
    and its foreign sponsors who want the Russian government to panic and make strategic
    mistakes.


    Seems like the taxes thing is the more elegant solution . or different taxes per item or product.
    that is food pay no more tax.. but luxury and cars and gasoline could take advantage of the cheap oil prices . to increase the tax. Also the privatization of things , by half , the Gazprom way will attract new money. 51% Russia gov and 49% private. Also Russia can take advantage of its weak Ruble to attract Tourism world wide and business investment too.

    Russian income taxes need to be raised and become progressive. The 13% flat tax is from
    the USSR period where it had zero correspondence to budgetary needs. If the Russian public
    wants social programs and good pensions, then they need to pay for them. Just as in NATO.
    But tax increases should not happen during the current recession. The best policy is to do
    nothing about the deficit and just accumulate it. Russia can handle several years of $30
    billion deficits. When revenues increase, then they should pay down the accumulated debt.
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    flamming_python

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    Re: Russian Economy General News: #6

    Post  flamming_python on Tue Dec 29, 2015 9:06 am

    A Different Voice wrote:Amid Turkey food ban, Russian government threatens Russian food producers and suppliers to prevent food price hikes.

    food producers threatened on prices

    Such threats are counterproductive to Russia's national interests. If a government wants to maximize import-substitution, it must allow local producers to receive market prices for their local goods. Price restrictions/pressure on locally produced food will result in less of such price restricted/pressured food being produced. Banning certain foods that are produced in Turkey will result in increased prices for the Russian made versions.  This should result in Russian producers of such foods obtaining higher prices. Such higher prices will result in increased future Russian production of the banned foods.

    You're right. If the Russian government wants to keep food prices down, it can pay the difference over the hikes itself.

    Higher food prices makes it harder for ordinary people, but it also makes it a lot more profitable for Russian food producers and encourages more agriculture, more processing, more production. Ultimately the problem will correct itself.
    The whole reason why the price is going up is because the country is now forced to rely on itself - it was always going to be painful, but reviving Russia's agriculture is ultimately necessary.
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    kvs

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    Re: Russian Economy General News: #6

    Post  kvs on Tue Dec 29, 2015 10:19 am

    Sorry, but this argument has no basis in reality. The producers are typically the ones that see the least amount of
    money from the consumer and it is all the layers of middle men (resellers) that grab the loot. The farmers growing the grains
    and growing the meat will not see 100% revenue increases if some downstream parasite uses the sanctions and
    devaluation noise to jack prices up by 100% to make a killing. So all the yapping about markets is so much BS.

    This theme is yet another liberast 5th column trope. Since 2000 there have been no price controls on food in Russia.
    Now we hear bleating about "regulated prices" when some scumbags try to gouge the public. Clearly this theme
    is utter rubbish.
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    PapaDragon

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    Re: Russian Economy General News: #6

    Post  PapaDragon on Tue Dec 29, 2015 11:12 am


    Nothing to do with sports but f*ck accuracy, righ? It's headline that counts... Never heard of this bank or this guy, can anyone elaborate?


    Russia's bobsleigh boss seeks political asylum in Europe: report

    http://news.yahoo.com/russias-bobsleigh-boss-seeks-political-asylum-europe-report-145128758.html


    Moscow (AFP) - Russian businessman Georgy Bedzhamov, head of the country's bobsleigh and skeleton federation, has left the country and is set to ask for political asylum in Europe, the Russian edition of Forbes magazine has reported.

    "The bobsleigh federation president Bedzhamov is currently in Monaco and is set to ask for political asylum in a European country," the magazine stated.

    The report added that Bedzhamov, the co-owner of Vneshprombank, had left Russia after the country's central bank earlier this month put the major lender -- which was reckoned among the country's top 40 banks -- into temporary administration.

    Bedzhamov's sister Larisa Markus, the president of Vneshprombank, has been accused of fraud and was detained shortly after.

    The bobsleigh federation confirmed that Bedzhamov was absent.

    "We're now working without the (federation) president," federation spokesman Georgy Kesoyan said.

    "We do not know anything about his current location. And his assistants told me that he has not asked to resign."

    Bedzhamov, who took over the Russian bobsleigh federation in 2010, was re-elected after the 2014 Olympics in Sochi, where Russia won three gold medals in bobsleigh and skeleton.

    "Despite the absence of the president the federation will continue its work in regular mode," Kesoyan told the press

    Karl Haushofer

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    Re: Russian Economy General News: #6

    Post  Karl Haushofer on Tue Dec 29, 2015 11:21 am

    PapaDragon wrote:
    Nothing to do with sports but f*ck accuracy, righ? It's headline that counts... Never heard of this bank or this guy, can anyone elaborate?


    Russia's bobsleigh boss seeks political asylum in Europe: report

    http://news.yahoo.com/russias-bobsleigh-boss-seeks-political-asylum-europe-report-145128758.html


    Moscow (AFP) - Russian businessman Georgy Bedzhamov, head of the country's bobsleigh and skeleton federation, has left the country and is set to ask for political asylum in Europe, the Russian edition of Forbes magazine has reported.

    "The bobsleigh federation president Bedzhamov is currently in Monaco and is set to ask for political asylum in a European country," the magazine stated.

    The report added that Bedzhamov, the co-owner of Vneshprombank, had left Russia after the country's central bank earlier this month put the major lender -- which was reckoned among the country's top 40 banks -- into temporary administration.

    Bedzhamov's sister Larisa Markus, the president of Vneshprombank, has been accused of fraud and was detained shortly after.

    The bobsleigh federation confirmed that Bedzhamov was absent.

    "We're now working without the (federation) president," federation spokesman Georgy Kesoyan said.

    "We do not know anything about his current location. And his assistants told me that he has not asked to resign."

    Bedzhamov, who took over the Russian bobsleigh federation in 2010, was re-elected after the 2014 Olympics in Sochi, where Russia won three gold medals in bobsleigh and skeleton.

    "Despite the absence of the president the federation will continue its work in regular mode," Kesoyan told the press

    Vneshprombank asked for 16 billion euros (1300 billion rubles) from the state today. Otherwise the bank will go under. The bank has been in trouble recently with its businesses and deals. Apparently the ownership (including the man who fled to Europe) has been misusing the bank's money/assets and maybe even stealing them.
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    A Different Voice

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    Re: Russian Economy General News: #6

    Post  A Different Voice on Tue Dec 29, 2015 11:27 am

    Blaming Russian food producers and distributors for "gouging" etc. in this context makes no sense. Russia will be more self-sufficient and better off in the long run if its food producers/distributors are able to price their products without threats and price pressure from the government.    

    I'm fine with Russian foreign policy being such that foreign food imports are restricted in the short term. However, strong-arming grocery stores into "voluntary" price freezes, and issuing threats about price increases is short sited.

    retailers promise to curb prices
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    A Different Voice

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    Re: Russian Economy General News: #6

    Post  A Different Voice on Tue Dec 29, 2015 12:14 pm

    Anyone have any thoughts on Russia's imposition of new currency exchange documentation rules?

    If you want to exchange more than about $200 to/from rubles you must provide documentation/info.

    What will the real world effect be? Net positive or negative?

    new currency exchange rule

    tighening exchange rules
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    flamming_python

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    Re: Russian Economy General News: #6

    Post  flamming_python on Tue Dec 29, 2015 12:18 pm

    kvs wrote:Sorry, but this argument has no basis in reality.   The producers are typically the ones that see the least amount of
    money from the consumer and it is all the layers of middle men (resellers) that grab the loot.   The farmers growing the grains
    and growing the meat will not see 100% revenue increases if some downstream parasite uses the sanctions and
    devaluation noise to jack prices up by 100% to make a killing.   So all the yapping about markets is so much BS.

    This theme is yet another liberast 5th column trope.   Since 2000 there have been no price controls on food in Russia.
    Now we hear bleating about "regulated prices" when some scumbags try to gouge the public.   Clearly this theme
    is utter rubbish.  

    Well I hope it's not true but if it is then taking your own logic a step further - the producers will be the ones to see even less money from the consumer. After all they didn't have the leverage over the middle men to 'grab the loot' before, and they won't have the leverage against the middle men to avoid having to take the hit (courtesy of the government) now.
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    sepheronx

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    Re: Russian Economy General News: #6

    Post  sepheronx on Tue Dec 29, 2015 12:34 pm

    This will create the rebirth of the farmers market concept (which is already a thing apparently).  I last heard that per head of cabbage, the farmer gets like maybe 10 cents?  Eventually both the buyers and producers will end up getting pissed at the middleman and simply set up more farmers markets.  It nearly isnt as efficient though.

    I cant remember the name of the Russian retailer.  Nit X5 but another one, is doing real well because they are not jacking up prices compared to others.  Profits less but sells in volume so they gained.  Walmart method really.

    Or wholesales will also do equally as well.  Guess if the government puts subsidies or something else to the logistical side of things, they can thus reduce prices.  But price gouging does exist, and this isnt first time in Russia.
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    sepheronx

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    Re: Russian Economy General News: #6

    Post  sepheronx on Tue Dec 29, 2015 12:37 pm

    Karl Haushofer wrote:
    PapaDragon wrote:
    Nothing to do with sports but f*ck accuracy, righ? It's headline that counts... Never heard of this bank or this guy, can anyone elaborate?


    Russia's bobsleigh boss seeks political asylum in Europe: report

    http://news.yahoo.com/russias-bobsleigh-boss-seeks-political-asylum-europe-report-145128758.html


    Moscow (AFP) - Russian businessman Georgy Bedzhamov, head of the country's bobsleigh and skeleton federation, has left the country and is set to ask for political asylum in Europe, the Russian edition of Forbes magazine has reported.

    "The bobsleigh federation president Bedzhamov is currently in Monaco and is set to ask for political asylum in a European country," the magazine stated.

    The report added that Bedzhamov, the co-owner of Vneshprombank, had left Russia after the country's central bank earlier this month put the major lender -- which was reckoned among the country's top 40 banks -- into temporary administration.

    Bedzhamov's sister Larisa Markus, the president of Vneshprombank, has been accused of fraud and was detained shortly after.

    The bobsleigh federation confirmed that Bedzhamov was absent.

    "We're now working without the (federation) president," federation spokesman Georgy Kesoyan said.

    "We do not know anything about his current location. And his assistants told me that he has not asked to resign."

    Bedzhamov, who took over the Russian bobsleigh federation in 2010, was re-elected after the 2014 Olympics in Sochi, where Russia won three gold medals in bobsleigh and skeleton.

    "Despite the absence of the president the federation will continue its work in regular mode," Kesoyan told the press

    Vneshprombank asked for 16 billion euros (1300 billion rubles) from the state today. Otherwise the bank will go under. The bank has been in trouble recently with its businesses and deals. Apparently the ownership (including the man who fled to Europe) has been misusing the bank's money/assets and maybe even stealing them.
    Just another crook trying to get away from justice.  Another Khordo.  Maybe will be used politically too.
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    A Different Voice

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    Re: Russian Economy General News: #6

    Post  A Different Voice on Tue Dec 29, 2015 1:09 pm

    sepheronx wrote:
    Karl Haushofer wrote:
    PapaDragon wrote:
    Nothing to do with sports but f*ck accuracy, righ? It's headline that counts... Never heard of this bank or this guy, can anyone elaborate?


    Russia's bobsleigh boss seeks political asylum in Europe: report

    http://news.yahoo.com/russias-bobsleigh-boss-seeks-political-asylum-europe-report-145128758.html


    Moscow (AFP) - Russian businessman Georgy Bedzhamov, head of the country's bobsleigh and skeleton federation, has left the country and is set to ask for political asylum in Europe, the Russian edition of Forbes magazine has reported.

    "The bobsleigh federation president Bedzhamov is currently in Monaco and is set to ask for political asylum in a European country," the magazine stated.

    The report added that Bedzhamov, the co-owner of Vneshprombank, had left Russia after the country's central bank earlier this month put the major lender -- which was reckoned among the country's top 40 banks -- into temporary administration.

    Bedzhamov's sister Larisa Markus, the president of Vneshprombank, has been accused of fraud and was detained shortly after.

    The bobsleigh federation confirmed that Bedzhamov was absent.

    "We're now working without the (federation) president," federation spokesman Georgy Kesoyan said.

    "We do not know anything about his current location. And his assistants told me that he has not asked to resign."

    Bedzhamov, who took over the Russian bobsleigh federation in 2010, was re-elected after the 2014 Olympics in Sochi, where Russia won three gold medals in bobsleigh and skeleton.

    "Despite the absence of the president the federation will continue its work in regular mode," Kesoyan told the press

    Vneshprombank asked for 16 billion euros (1300 billion rubles) from the state today. Otherwise the bank will go under. The bank has been in trouble recently with its businesses and deals. Apparently the ownership (including the man who fled to Europe) has been misusing the bank's money/assets and maybe even stealing them.
    Just another crook trying to get away from justice.  Another Khordo.  Maybe will be used politically too.

    Agreed.  A lot of very powerful Russians had large deposits at Vneshprombank. It is sounding like the bank's depositors may not get all of their money back. If not and if Bedzhamov doesn't get turned over to Russian authorities, I give him a 50/50 chance of being alive in 10 years. Can't say I'll cry any tears for him if he goes.

    As far as the bank asking for 1300 billion rubles, I hadn't read that anywhere. That seems like an unfathomably large sum of money. If someone could post a link to an article about the request, it would be appreciated.

    Austin

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    Re: Russian Economy General News: #6

    Post  Austin on Tue Dec 29, 2015 10:08 pm

    kvs , sepheronx , A longish article for your reference , do comment

    2016 Prognosis: Another Tough Start for Russia Before Return to Growth
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    sepheronx

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    Re: Russian Economy General News: #6

    Post  sepheronx on Tue Dec 29, 2015 10:33 pm

    Austin wrote:kvs , sepheronx , A longish article for your reference , do comment

    2016 Prognosis: Another Tough Start for Russia Before Return to Growth

    First part of it was already off to a bad start:
    However, the structure of the budget is also a bet. The military spending is a drain on the economy that cant be sustained for more than a year without change. Likewise, the enshrining of a 3% deficit and the reluctance to increase taxes or reduce subsidies to state-owned enterprises means the government is hoping that oil will recover to an average of $50 in 2016.

    Military industrial complex of Russia comprises of Russias industrial strength of roughly 20%:
    http://sputniknews.com/russia/20090602/155148607.html
    Russia's defense industry currently employs 2.5-3 million workers, or 20% of manufacturing jobs.

    So that is 2.5 - 3 million workers.  Let us say that they are paid roughly average wage of 35,000 Rubles per month.  That would indicate that 13% of that is: 4550 rubles.  Now multiply that per month per person:
    3,000,000 x 4550 rubles = 13,650,000,000 Rubles per month.  In USD terms for those who may not know about its value is: $186,986,301.37 per month in terms of just income tax.

    Now lets say they cut back on funding for military.  What will happen?  Well, companies will clearly reduce workforce + benefits in order to upkeep profit margins.  But what about the other industries?  Well, Russian tanks, airplanes and ships require metals, plastics, electronics, etc that come from Russian sources.  So that is other industries as well (metallurgy industries do not fall under military industrial complex) will also lose out.  Imagine how many of those workers would also be laid off.

    But what about the industries themselves?  Let us not forget, these companies also have profit margines and also pay corporate taxes.  Remove that, even more revenue will be lost.

    As Pogosyan said, for every Ruble is invested in aerospace, at least 3 rubles are created.  This falls under the various other enterprises in the MiC.  You think if Uralvagonzavod didn't have all those orders for tanks, upgrades, and such, could afford all the other civil projects they are creating?  Probably not.  As we have seen what happened to Omsk plant with no contracts for the T-80 tanks.  The plant is pretty much none existent now.  This is a lot of money that would be lost.  A lot of workers out of a job and a drastic increase in social service costs in order to keep these people off the streets begging for change.  Then, all the import substitution industries will also lose out as the biggest consumer for domestic components are the military industrial complex itself (blame the soviet union for this as it has been an issue for forever).  I do agree that the industries need to also get involved in the civil sector like Uralvagonzavod has done, but not everyone could do this and on top of that, would it work? Would they be competitive?  In order to do so, they will need the starting financial input in order to invest in production of other goods.

    Agriculture has also been a stellar story in 2015 and will continue to improve in 2016. And the crunch is forcing a rapid consolidation in organised retail and banking in particular; the Central Bank of Russia (CBR) closed a record 100 banks in 2015 and will continue until it has reduced the number from the current 700 odd to around 300.

    Sitation is needed.  Where did this come from?  Did CBR say this?  That said, if Russians and others think this is horror, then they should come there way to Canada where our banks are very few:
    https://en.wikipedia.org/wiki/List_of_banks_and_credit_unions_in_Canada

    This also includes Credit Unions, which I do not think Russia has.  And yet, we are considered a stable economic country (which is a joke actually).  So how many banks in Russia are both none performing and or involved in illegal activities?  Already one guy, head of a sports department, is seeking asylum in another country because he and his partner(s) were caught with illicit activity.  How many of these banks were liabilities?

    The economic outlook in 2016 will be largely determined by what happens to two factors: can the CBR cut rates down into single digits, which is a function of what will happen with inflation, and where will oil prices settle?

    Then CBR is at fault and this proves it.  As well, oil prices no longer really matter that much besides currency valuation on the exchange rate, since oil only accounts for 9% of the Russian GDP.

    In previous years, Russia had domestic consumption to fall back on to bolster growth. But falling real incomes already led to retail turnover contracting more quickly than other parts of the economy. This is a trend that is likely to continue, unless there is a recovery in consumer borrowing (see below).

    Russia's 2000-2008 consumption growth boom was based on income growth of about 10% a year in real terms – far ahead of both inflation and productivity gains, and super-charged by retail lending. But that came at the expense of squeezing corporate profits and companies have run out of space to keep increasing pay at above-inflation rates.

    This part is pure bullshit as KVS has pointed out the valuation of average Russian wages from the years of 2000 to now, and you will notice that the times before, Russian average wage (accounting for inflation of then vs now) was still less than what it is now, even after the inflation valuation.  People are spending less because they are doing what was being told to them by the CBR - tighten your belt.  Which was a stupid move as domestic consumers account for 80% of Russia's economy.

    But here is another point to be made - How many of these products not being purchased now, were simply imported products and resold at rates that would indicate profit for the stores?  There is a reason why foreign brands have dropped significantly in sales compared to their Russian counterpart.  Funny enough, in the accounting for domestic consumption rate, imported goods are also included.

    The article is quite long.  Some good points and some cringe worthy points that really isn't a factor but added in anyway.  Yes, Russian industrial output is steadily growing and Russians will spend again (as they cannot "not" spend forever).  But also said, as mentioned once before on sdelanounas - it isn't necessarily that sales have dropped.  On the contrary, sales have increased (hence the industrial output increase).  It is just that costs of the goods now vs then are different and that products do not cost nearly as much as average spender is spending and wholesales and or discount stores compared to before:

    http://www.ceeretail.com/news/251035/x5-retail-group-sees-its-sales-up-by-28-3-y-o-y-in-q3-2015

    X5 Retail Group sees its sales up by 28.3% y-o-y in Q3 2015

    X5 Retail Group, a prominent Russian grocery retailer, increased its sales revenues by 28.3% to RUB 195bn (€2.7bn) in Q3 2015, compared to the same period in 2014. In turn, in January-September 2015, X5 reported sales revenues of RUB 575.7bn (€8bn), or a 27.6% y-o-y growth. The company’s like-for-like sales grew by 13.1% in Q3 2015 and by 15.2% in Q1-Q3 2015, year on year.

    According to X5, the retailer’s discounters had the highest contribution to total sales revenues in January-September 2015, as the Pyaterochka discount chain, which added 1,006 new stores net since the beginning of the year, saw its sales revenues increased by 35%, year on year, totalling RUB 418.2bn (€5.8bn).

    Overall, in the first nine months of 2015, X5 added 1,029 new stores net in Russia, including 541 new outlets in Q3 alone. Therefore, as of 30 September 2015, the retailer operated 6,512 stores with a total retail area of 3,079,670 m2.

    Austin

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    Re: Russian Economy General News: #6

    Post  Austin on Wed Dec 30, 2015 12:46 am

    Russia has a record portfolio weapons orders at end of year

    9:32 12/30/2015 (updated: 10:32 12/30/2015 ) 4016 44 3

    The portfolio of orders Russian arms exports at the end of 2015 is more than $ 55 billion. In the last decade the average annual portfolio of orders did not exceed $ 50 billion.


    MOSCOW, December 30 - RIA Novosti. The portfolio of orders Russian arms exports at the end of 2015 is a record amount - more than $ 55 billion, told RIA Novosti on Wednesday, a senior official of the Federal Service for Military-Technical Cooperation (FS VTS).

    The average portfolio of Russian arms orders in the last decade was worth 45 to 50 billion dollars.

    "At the end of this year FSMTC a portfolio of defense export orders worth more than 55 billion dollars. This is a record of the last decade," - a spokesman said.

    Austin

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    Re: Russian Economy General News: #6

    Post  Austin on Thu Dec 31, 2015 8:05 am

    External debt of Russia for 9 months decreased by 10.2%, to $ 538.2 billion

    31.12.2015 16:30 3 2582 33 1
    On January 1, 2015 foreign debt amounted to 599.041 billion dollars. Thus, during the reporting period, a decline of 60.844 billion dollars.

    MOSCOW, December 31 - RIA Novosti. The external debt of the Russian Federation on October 1, 2015 amounted to 538.197 billion compared to $ 599.041 billion as of 1 January 2015, revised data show the Bank of Russia.

    Thus, the country's external debt decreased in the nine months to 60.844 billion, or 10.2%.

    Earlier, according to preliminary data controller, the external debt of the Russian Federation on October 1, 2015 amounted to 521.61 billion dollars.
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    kvs

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    Re: Russian Economy General News: #6

    Post  kvs on Thu Dec 31, 2015 8:08 am

    Austin wrote:External debt of Russia for 9 months decreased by 10.2%, to $ 538.2 billion

    31.12.2015 16:30 3 2582 33 1
    On January 1, 2015 foreign debt amounted to 599.041 billion dollars. Thus, during the reporting period, a decline of 60.844 billion dollars.

    MOSCOW, December 31 - RIA Novosti. The external debt of the Russian Federation on October 1, 2015 amounted to 538.197 billion compared to $ 599.041 billion as of 1 January 2015, revised data show the Bank of Russia.

    Thus, the country's external debt decreased in the nine months to 60.844 billion, or 10.2%.

    Earlier, according to preliminary data controller, the external debt of the Russian Federation on October 1, 2015 amounted to 521.61 billion dollars.

    This debt reduction is included in the figure for capital flight just as foreign loans are considered investment.
    So next time some liberast whiner hops and down screeching about capital flight, keep this in mind.
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    A Different Voice

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    Re: Russian Economy General News: #6

    Post  A Different Voice on Thu Dec 31, 2015 10:24 am

    [/quote]This debt reduction is included in the figure for capital flight just as foreign loans are considered investment.  
    So next time some liberast whiner hops and down screeching about capital flight, keep this in mind.[/quote]

    Amount of foreign debt and  foreign investment are related. Foreign capital investment and loans are not bad in all cases.
    I would expect the North Korea has very low levels of foreign direct investment and debt. This is not necessarily a good thing.

    Russia is mostly reducing foreign debt not because it wants to, but rather because:
    1. less foreign lenders want to put their money into Russia right now; and
    2. sanctions have reduced the flow of loans.  

    Russia's reduction in foreign debt is a symptom of what are hopefully short-term economic problems for the country. When things get better foreign debt and investment will increase again.
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    sepheronx

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    Re: Russian Economy General News: #6

    Post  sepheronx on Thu Dec 31, 2015 1:05 pm

    Uh no. Foreign debt wasnt a good thing at all, it was economical due to lesser interest rates.  High debt countries are running off of borrowed money and look rich on paper. It isnt their money though.

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    Re: Russian Economy General News: #6

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