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    Russian Economy General News: #1

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    Austin


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    Post  Austin Thu Jul 04, 2013 4:31 pm

    Corruption in Russia: Is there a way out?
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    Post  sepheronx Mon Jul 08, 2013 4:16 am

    Austin wrote:Corruption in Russia: Is there a way out?

    A little late but:

    Do you think that the State Duma will approve this draft law? Will it help to improve the situation, if they adopt it?

    Of course it will. It's possible that certain amendments will be made, but this is not what it’s all about. This law will not work. Take a look at the law on NGOs. Why did they adopt it? There’s no such thing as foreign agents. Political scientists, especially those in the West, are trying too hard to see meaning in this. There’s no need to do so, though. There’s none. Things that are happening in our legislative sphere are nothing short of tyranny, which only shows the limitless presidential power.

    This is stupid. I hate these types of people and Austin, you eat that crap up like no tomorrow. No such thing as "Foreign agents"? Is this guy for real? Of course there are. Why else did USAID provide funding to opposition of Russia? Why else was Hillary Clinton made it obvious that they would "continue" to find other ways to fund groups within Russia? It is so bloody obvious and this guy has a real agenda then. Yeah, Russia is corrupt and there is corrupt government. But from what I heard from business owners in Russia, you either play it legit and not worry about issues or you can try to get your hands dirty (it is the cheaper way out apparently) or you convolve in black booking.

    Austin, may I suggest you actually read through the things you are about to post? OR at least give a comment regarding what you think about the article.

    USAID made no secret when half of its funds to fight TB in Russia, ended up in the pockets of the Russian opposition.
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    Post  GarryB Mon Jul 08, 2013 11:18 am

    The US government is a monster.

    Just look at Haiti... they had a natural disaster there 10 years ago and the US moved in and things are as bad there as they ever were... billions of foreign aid is squandered into foreign contractors programs that basically support foreign interests... very little of that money goes to the Haitian people themselves. The US is more interested in getting the Haitian government to change its mineral rights laws so western mining companies can go in and strip the place of its wealth... it is a wealth extraction machine and anyone that stands in its way is called a communist... a dictatorship... an enemy of the state... use the NSA to listen to their secrets and try to blackmail... the CIA is sent in to assassinate and fund the opposition and to pay the newspapers to act against the government... NGOs are used against the government... to bring peace and prosperity? To get a more corrupt government into power so they can bribe their way into the resources of the country...
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    Post  Viktor Mon Jul 08, 2013 1:04 pm

    According to World Bank - As of 2012 Russia is 5th economy of the world.

    http://databank.worldbank.org/data/download/GDP_PPP.pdf

    also in 2012 Russia entered club of high income states Very Happy 

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    Post  Austin Mon Jul 08, 2013 1:43 pm

    sepheronx , My bad I didnt read the entire interview.

    I saw some on in mp.net stating that US has similar law like Foreign Agent Act and that they were identical.

    Ok I will try to post some comments in my posts due to lack of time I barely manage to read the content and posting comment gets difficult but I will try.
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    Post  Austin Mon Jul 08, 2013 1:46 pm

    Viktor wrote:According to World Bank - As of 2012 Russia is 5th economy of the world.

    http://databank.worldbank.org/data/download/GDP_PPP.pdf

    also in 2012 Russia entered club of high income states Very Happy 


    Interesting that Russia is ahead now of every one in Europe and China is pretty close to US.

    I think what really matter is Per Capita Income and I think Russia is behind in that game , Putin himself stated once that he would like to achieve per capita similar to France.

    India is 3rd which is heartening but living in India I can state figures dont tell the real truth.
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    Post  medo Mon Jul 08, 2013 4:34 pm

    Considering, that Per Capita income in EU is falling drastically, I think Putin doesn't need to do much, just wait few years and will be better than in France.
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    Post  Austin Mon Jul 08, 2013 6:16 pm

    I would rather say Russia should target a growth rate between 4-5 % , thats the best way increase your per capita rather then expect others to fall....does not help your cause.

    If Europe is slowing down then Russia should try to refocus on Asia i.e. China , India and other nation in Asia Pacific rim......Europe will take some indefinate time to get out of their slumber.
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    Post  sepheronx Tue Jul 09, 2013 1:03 am

    Austin wrote:sepheronx , My bad I didnt read the entire interview.

    I saw some on in mp.net stating that US has similar law like Foreign Agent Act and that they were identical.

    Ok I will try to post some comments in my posts due to lack of time I barely manage to read the content and posting comment gets difficult but I will try.

    Sorry if I come off as a jerk, as you do not deserve it (I would say you are probably one of the most informative and produce a lot of good info compared to most members on sites like MP.Net).  Sorry again.

    But yes, US does have a similar law, as I have pointed out on MP.net.  We also have a similar law in Canada too, as it would be in the interest of other parties vs our own if someone outside decided to fund our government.  Although, it is no secret that the US funds my government, as we have such stupid agreements that hurt our development more than theirs, it is called NAFTA.

    Austin wrote:I would rather say Russia should target a growth rate between 4-5 % , thats the best way increase your per capita rather then expect others to fall....does not help your cause.

    If Europe is slowing down then Russia should try to refocus on Asia i.e. China , India and other nation in Asia Pacific rim......Europe will take some indefinate time to get out of their slumber.

    Easier said than done. In order to have growth rate, you need to have proper trade balance as well as a diversified economy. Russia is diversifying its economy, as there are plenty of other information out there regarding it (I started a thread on this subforum about it), but that will take time, years, in order to see the fruit of such efforts. Right now, Russia has a strong industrial base, second to Germany, as well as a lot of potential thanks to smart people in the country (programmers as well as a growing semiconductor industry), but those alone will not make it rich. Sad reality is that today, cheap manufacturing and resources makes a country rich, no innovation. China is very lacking in innovation, so is India, yet they are growing massively, and it is really thanks to a huge work force that is highly underpaid, and lack of regulation, making it easy for industries to indulge in corruption as well as piss poor safety regulations, which saves companies plenty of money, at the expense of endangering the workforce. Russia also is quite a high corrupt government and people, thus it has similar issues, but the media makes light of a lot of it, so it is becoming harder and harder for officials to actually induldge in corruption without getting into the limelight. In the end, eventually, corruption will start to fall because of fear of persecution and or losing the job. But still, a lot of money, a LOT of money is being lost due to corruption of either people themselves or government. There is something like 20% of GDP lost per year because of business people (private is a huge part of it) that indulge in blackbooking (I was actually told by someone who owns a business in Russia that they do this) in order to avoid certain taxes, and ultimately, 20% is a LOT of money lost because of such acts. There is also stupid tax laws in some respects that hurt the small businesses, as even though it adds up to $90 a month, that is a lot for small businesses in villages who have to rely on every kopek to survive.
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    Post  Austin Tue Jul 09, 2013 8:50 am

    sepheronx wrote:Sorry if I come off as a jerk, as you do not deserve it (I would say you are probably one of the most informative and produce a lot of good info compared to most members on sites like MP.Net).  Sorry again.

    No need to be sorry , I am on too many boards as I have interest on Indian and Russian Military/Economy alike and due to pressure of time I cannot do justice to my post , I think I will have to cut down on it as I end up juggling with too many things.

    Thanks for your kind words and I end up reading many of your post too as it is very informative.

    But yes, US does have a similar law, as I have pointed out on MP.net.  We also have a similar law in Canada too, as it would be in the interest of other parties vs our own if someone outside decided to fund our government.  Although, it is no secret that the US funds my government, as we have such stupid agreements that hurt our development more than theirs, it is called NAFTA.

    You bet there are laws and then there are laws for some countries .....even if Russia end up copying the same law identically the west would still have problem. I read today the Magnitisky list has been implement by UK too and they have banned some Russian official would be interesting to see how they react.

    Well the day Canada has agreement thats more benefitial to itself then US , you can bet how Senators from across the party would be jumping to suck your blood.

    Easier said than done.  In order to have growth rate, you need to have proper trade balance as well as a diversified economy.  Russia is diversifying its economy, as there are plenty of other information out there regarding it (I started a thread on this subforum about it), but that will take time, years, in order to see the fruit of such efforts.  Right now, Russia has a strong industrial base, second to Germany, as well as a lot of potential thanks to smart people in the country (programmers as well as a growing semiconductor industry), but those alone will not make it rich.  Sad reality is that today, cheap manufacturing and resources makes a country rich, no innovation.  China is very lacking in innovation, so is India, yet they are growing massively, and it is really thanks to a huge work force that is highly underpaid, and lack of regulation, making it easy for industries to indulge in corruption as well as piss poor safety regulations, which saves companies plenty of money, at the expense of endangering the workforce.  Russia also is quite a high corrupt government and people, thus it has similar issues, but the media makes light of a lot of it, so it is becoming harder and harder for officials to actually induldge in corruption without getting into the limelight.  In the end, eventually, corruption will start to fall because of fear of persecution and or losing the job.  But still, a lot of money, a LOT of money is being lost due to corruption of either people themselves or government.  There is something like 20% of GDP lost per year because of business people (private is a huge part of it) that indulge in blackbooking (I was actually told by someone who owns a business in Russia that they do this) in order to avoid certain taxes, and ultimately, 20% is a LOT of money lost because of such acts.  There is also stupid tax laws in some respects that hurt the small businesses, as even though it adds up to $90 a month, that is a lot for small businesses in villages who have to rely on every kopek to survive.

    Yes I am aware its easier said then done and its the same in my country too India , but Russian leaders dont take the hard decision because they might have to pay it politically ( same in India too )

    What Russia needs is Deep Structural Reforms which is divest from sectors that the Government does not need to control fully or can control partially like Oil & Gas , Banking Sector Reforms , Infrastructure etc , only key strategic interest like MIC , Aviation needs to be fully or in majority in control of the government.

    I know that Russian Government is dilly Dallying on this as they know it wont be an easy decision to take and since Oil Prices are high they want to delay the decision which I think is bad in long run.

    A Country can get rich in 3 ways , Manufacturing which is what China , South Korea , Japan did or does , Oil & Gas which is what Russia , Middle East in some ways Canada too relies on and Banking and Financial which is what majority of west and US relies on ofcourse West/US does have high end manufacturing capacity too.

    So Russia has to move away from Oil & Gas and get into Banking & Financial sectors and build Hi Tech Industry that is how it can grow 4-5 % YOY.

    It cant be big in manufacturing due to cost reasons , it cant rely on Oil & Gas as they can go down any time like 2008 crisis has shown.

    Ofcourse Russia ends up facing some prejudices and streo types , like look at Moody Downgrade that happened for few banks , THe West Banks filled with Crooks and Thief and that bought 2008 crises keep getting AAA rating which means Money is available at 0 % interest and even if S&P downgrades US to AA+ then it faces the heat.

    So the best way for Russia to grow long term is Invest In Infrastructure in a big way in feseable project , Do Structural Reforms by divesting their shares in Oil Gas Railways etc bring in more private money into these and use Oil Money as bonus and build reserves , invest in MIC and Infra and dont rely much on it for much budget revenue.

    Today Russia 50 % Revenue is from Oil & Gas taxation which is very high for a developed country like Russia makes it vulnerable to Oil & Gas price manipulation that big western bank play with.

    I am afraid if they dont take some tough decisions then it would hurt them in long run considering they have their neighbours like China which is growing exponontially and would put its weight around in the coming decade.
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    Post  GarryB Tue Jul 09, 2013 10:43 am

    Rather than getting a GDP or this or that I think Russia should concentrate on helping all Russians get a good quality of life and that means focussing on dealing with the widening gap between rich and poor.

    I don't think everything should be privatised because it does not make sense for everything to be driven as a commercial enterprise.

    There should be hard limits that restrict the difference between the highest wage within a company and the lowest.

    The problem with the western countries is that very rich powerful companies can have too much say in how laws are written by using their money to bribe politicians. That needs to stop.
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    Post  Viktor Tue Jul 09, 2013 10:44 am

    Well Russia is diversifying its economy. We have growth in:

    - construction industry
    - civil aviation industry
    - military industry
    - electronics industry
    - IT industry
    - agriculture and food processing industry
    - green energy industry
    - nuclear industry
    - naval industry
    - car industry
    - machinery industry
    - pharmacy industry
    - telecommunication industry
    etc etc

    Every single one is finding its way in todays world with the help of oil and gas money and that is what is important - because those are the things that will in future generate even more income.

    Significant part of this equation is high and steady oil and gas prices and huge expand of Russian oil and gas market
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    Post  Austin Tue Jul 09, 2013 11:12 am

    If it is all growing then why are quarterly GDP figures low Wink 
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    Post  TheArmenian Tue Jul 09, 2013 11:16 am

    Viktor wrote:Well Russia is diversifying its economy. We have growth in:

    - construction industry
    - civil aviation industry
    - military industry
    - electronics industry
    - IT industry
    - agriculture and food processing industry
    - green energy industry
    - nuclear industry
    - naval industry
    - car industry
    - machinery industry
    - pharmacy industry
    - telecommunication industry
    etc etc

    Every single one is finding its way in todays world with the help of oil and gas money and that is what is important - because those are the things that will in future generate even more income.

    Significant part of this equation is high and steady oil and gas prices and huge expand of Russian oil and gas market


    I singled out Agriculture in your post.
    People discussing Russian economy tend to focus more on oil/gas and industry + services. Agriculture is most commonly forgotten.
    The recent slow growth of Russian GDP is in good part due to the poor harvest of 2012.
    With its vast land resources, agriculture is (in my opinion) the sector the has the most potential. Russia can become the world's largest food producer/exporter, Putin has mentioned it in an earlier speech this year: http://www.1prime.biz/news/0/%7BADE073C1-A4E1-47F1-8711-EB118192E1AF%7D.uif

    This years grain harvest will be substantial and will affect the whole economy positively. A bumper crop mains: Lower grain prices> lower feed prices> lower meat production costs > increased meat production > increased food processing > lower food prices for the consumer > more money to spend on other things > increased retail sales of everything > increased production of everything etc etc.

    For the government, a good crop year also means less subsidy for the agriculture sector and more money available to buy weapons....Urraaaaaah cheers 
    http://www.1prime.biz/news/0/%7B38BCC3CA-F8A0-469D-A9CB-31A1F4104584%7D.uif

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    Post  Austin Tue Jul 09, 2013 11:17 am

    If they have more money they better save it or spend on Infra , Health Care or Education.

    I think they are already spending the best on defence , I am not a great proponent of spending on defence , MIC can be a black hole look at US MIC.
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    Post  Viktor Tue Jul 09, 2013 12:13 pm

    Austin wrote:If it is all growing then why are quarterly GDP figures low Wink 

    As The Armenian said agriculture while growing and more and more land cultivated still depends on weather condition and in 2012 was not a good.

    Same can be said about Russian gas production - while more contract was signed and Russia expanded its influence less gas was delivered etc etc.

    What I want to say is that despite investment some outside influence (even for the short period of time) can negate positive effect of investment and growth

    but all those work will pay off shortly after. Important thing is that Russian economy is developing in all directions and none of them is ignored.


    Austin wrote:If they have more money they better save it or spend on Infra , Health Care or Education.

    I think they are already spending the best on defence , I am not a great proponent of spending on defence , MIC can be a black hole  look at US MIC.

    As I understood Russian government has program of development of education and health care and every other segment important for the life of its people.
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    Post  Austin Tue Jul 09, 2013 12:40 pm

    Officially growth is low because Europe is in crisis and 50 % of Russia export is to Europe and Russian economy itself didnt do well , ie it didnt grew as was expected.

    Spending for Education and Health Care has decreased as military spending has increased

    http://www.itar-tass.com/en/g44/2629.html
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    Post  Viktor Tue Jul 09, 2013 12:59 pm

    Austin wrote:Officially growth is low because Europe is in crisis and 50 % of Russia export is to Europe and Russian economy itself didnt do well , ie it didnt grew as was expected.

    Spending for Education and Health Care has decreased as military spending has increased

    http://www.itar-tass.com/en/g44/2629.html

    Excellent chart. Tnx.

    Still as you can see for the small drop in education, military budget is growing considerably Very Happy . Debt is well within limits and I think that while Russians are slightly changing its priorities in general all is doing well.

    Austin wrote:Officially growth is low because Europe is in crisis and 50 % of Russia export is to Europe and Russian economy itself didnt do well , ie it didnt grew as was expected.

    Spending for Education and Health Care has decreased as military spending has increased

    http://www.itar-tass.com/en/g44/2629.html

    There is also a question of Russian orders in machinery from EU that will in several years start to fall sharply because of decreased need and because of increased production capabilities of Russian manufactures. As of now approximately 2 million Germans have their job because of orders from Russia and scaled down but same can be said about Japan, Italy, Austria and France (even Turkey).
    That while unhappy was also necessary in order for Russia to quickly catch up with the rest. Russians could not afford to wait for years their manufactures to make machines that will modernize the country. That is something that needs to be done as quickly as possible.

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    Post  sepheronx Tue Jul 09, 2013 4:05 pm

    Austin wrote:Officially growth is low because Europe is in crisis and 50 % of Russia export is to Europe and Russian economy itself didnt do well , ie it didnt grew as was expected.

    Spending for Education and Health Care has decreased as military spending has increased

    http://www.itar-tass.com/en/g44/2629.html

    You mentioned this before on MP.net, and it was mentioned that even though spending for military is up, education and health is also up, just not as much.  As well, it is now provincial and territorial control rather than federal, so the spending is dealt by those government authorities.  Andy_UA mentioned it.

    Austin wrote:If they have more money they better save it or spend on Infra , Health Care or Education.

    I think they are already spending the best on defence , I am not a great proponent of spending on defence , MIC can be a black hole  look at US MIC.

    Weren't you the one who posted the article about billions being poured into infrastructure development that Putin promised?  Something like 32B?  Kinda odd you would ask the question when you provided an answer to your own question earlier.

    Austin wrote:If it is all growing then why are quarterly GDP figures low Wink 

    2.6% growth is still growth. Inflation is lower this year as well than it was last year, which is good too. Inflation though is still high.

    If you are interested in knowing about technological development in Russia, please go to either both of these sites:

    http://marchmontnews.com/ (all in english)

    and

    http://sdelanounas.ru/ (ignore the blog points, cause a lot of them are personal views not actual facts. I would rather just concentrate what is posted by Rosstats and what not).

    Biggest thing to hit Russia recently in the past years is Technoparks. It is starting to appear that technoparks are hitting almost every major and even non-major cities through Russia, in all regions. Saratov, Daegestan, Tomsk, Irkutsk, Sarov (Nihzniy Novgorod), etc. With the most infamous of them all, Skolkovo in Moscow which is a technopark but better classified as an inograd due to it being centeralized and being its own area outside of Moscow.

    Technoparks are technically set locations that have infrastructure that is either (usually) government built and or private/JV, and is considered a tax safe haven for businesses. They get the proper energy, as well as infrastructure to run their R&D facilities. These areas are more or less incubators for Reasearch and development centres for major industries in and outside of Russia, with benifits like I mentioned, Tax safety as well as proper access to logistics and infrastructure. Very important for development, and these will be the deciding factors for huge portions of Russian economy and its development.

    The next step, is to solve some major issues that is stunting high tech growth in Russia: The communication between universities, and such facilities and logistics. In USA, it is very common to have Universities to work along side major industries, to get the high tech development out on the market, while in Russia, Universities act like isolated chambers, where nothing goes out, even after they make breakthroughs. I remember reading years ago about a Russian university coming up with a new form of hard drives using magnets in order to create significantly more space, have much higher read/write times, and more efficient. But it really did not reach outside of the university so that gem of technology, is on a shelf collecting dust. Let us hope they do not do such a move with the recent breakthrough in quantum computing technology. Cause really, Russia is technically a high tech Giant, it just lacks proper communication and business structure. I mean, Russia would end up being second country in the world to offer commercial quantum computing.

    What about MCST? The Elbrus line of microprocessors are quite impressive. Yes, SPARC is outdated and most are moving away from it, but the Elbrus R1000 is a 1GHZ SPARC processor that is quite efficient and effective for what it does, or the MCST Elbrus-2C, which, even though is 500mhz, it is quite efficient and has higher performance than a 2ghz Intel Atom processor. There is massive potential of Russias semiconductor industry, but due to no real interest from officials and other industries to try to push out the products, many of it is kept away for special purposes (Elbrus-2C used specifically for military as it has 2DSP cores and thus great for radar applications). But there is a push for apparently a new processor developed by MCST ordered from the Ministry of Industry, and I think it is Elbrus 4S, which would be fantastic, especially when under its own linux kernal environment.

    Phew, that was long. But point I am trying to make is, that there is indeed lots of development going on. Technoparks do not get a lot of limelight, but they are going to be the massive drive for future development, as well as future growth for MANY regions. They cover various fields like Skolkovo with its Energy, Pharma and Mechanical R&D, while Dagestan, it will be Agriculture and chemical, etc etc etc. So there is plenty being done, just it will not bare fruit for many years, as these are projects being developed now, in the works or are completed but only recently opened up with few already working.

    Agriculture is going to be major importance for Russia, next to construction, as the world increases its population, people need to eat. Russia is second to Germany in terms of industrial strength, but Industrial strength can only take your economy so far, especially when you rely on outside sources to purchase your goods and there is already high demand from countries that produce it for cheaper due to cheaper labour (China/India).
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    Post  TR1 Tue Jul 09, 2013 9:44 pm

    I am also against MIC becoming black hole.
    Russia has been through this before, we don't need a USSR 2.0

    Military spending should be done in a smart (lets be honest, protectionist) manner. Stimulate science labs, employ labor force. Create good export products.
    No need to operate 500 PAK-FAs and 4000 cuttind edge MBTs.
    Russia has a hundred different priorities of higher need and better eventual pay off than a huge military budget. 80-85 billion a year is already pushing it IMO. That number can go a longer way if corruption is met (I honestly think there should be death penalty in military for large scale corruption, it is no different in harming nation than desertion, worse in fact. Extreme yes, unethical, probably, but something needs to be done. Russia doesn't do the death penalty anymore though...) and when the industry untangles itself from the post-Soviet mess much of still is in (both in financial, technical and personnel).
    Russia is developing a cutting edge nuclear arsenal, use it to save elsewhere!
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    Post  Firebird Tue Jul 09, 2013 10:36 pm

    It is a difficult balancing act.

    Russia needs a powerful armed forces. Foreign and even internal powers covet her resources. Additionally, military influence is linked to political influence which is linked to economic power.
    Nowhere has this been seen more clearly than with the US. The fact it has many bases, many invasions, and also has the world's main reserve financial currency. It also meddles with a huge amount of trade issues etc. Even the Dotcom revolution must be traced back in part to the transfer of tech from military to civillian domains.

    The question is, if we believe Russia needs a strong military (which ofcourse it does- to protect its resources and its key partners and its own independence), how can that investment pay off, if Russia never actually goes to war.

    Perhaps Russia can make money as a protector of states? Or perhaps its magnificent military tech can be transferred more and more to civillian uses. This is a major challenge, but surmountable nonetheless.

    Finally, Russia has to win not only the war, but the peace. It is no good having a an army full of the most beautiful machines, if people are poor, and the system collapses. Good military tech needs as good a punch per rouble as possible. Putin may have his faults, but I'm sure this one isn't lost on him.

    It will be very interesting to see how Russia develops with the WTO and the diversifn from mainly minerals to a variety of industries.

    Ofcourse food and minerals are key. But also hitec eg nuclear power, engineering. I would expect more in the IT field, banking, luxury goods too. There are many areas Russia can strive in. It has taken longer than I thought, but we're FINALLY starting to see people outside of the Oligarchical elite getting a little. Altho certainly not enough...

    sepheronx
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    Post  sepheronx Wed Jul 10, 2013 4:57 am

    The major problem I see is that the Russian MiC are pretty much single entities building something specific. If the defence agencies were more involved in the civil market, they can expand their user base and ultimately, their financial standings. Unfortunately, the MiC is the main supporter of new technology development as well as the funding and use of it. Until they start using this high tech in the civil market, they will have to continue to fund this "black hole" that many of you speak of. 25% of Russia's industrial complex is in regards to the military, and it not only employs a lot of people, they are the ones that drive a lot of other businesses as well as force new technologies to be born (why ministry of industry is pushing for Elbrus-4C+ compared to some company like Dell). If Russia made the MiC engage in more activities other than making weapons, then I can guarantee you, that industry would be moving forward and so would the high technology development for civil market.
    GarryB
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    Post  GarryB Wed Jul 10, 2013 10:52 am

    Russia always had a powerful armed force... even with neglect there are not many forces it could not take on.

    A part of the reform and reequipment of the Russian armed forces is to make them smaller and more mobile and more efficient.

    Part of upgrading the military includes upgrading the military industrial complex including reforming and streamlining it too which should result in more efficient companies that create less waste.

    There is an expectation that this might result in dual use technologies and also have intended knock on effects... for instance the military is becoming very digital which should spur on development and spending on electronics and computers which should also effect the Russian electronics industries.

    The tank maker UVZ also makes electric trains... military companies can also diversify to add stability when certain products don't sell as well as normal.
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    Post  Austin Wed Jul 10, 2013 11:56 am

    sepheronx wrote:You mentioned this before on MP.net, and it was mentioned that even though spending for military is up, education and health is also up, just not as much.  As well, it is now provincial and territorial control rather than federal, so the spending is dealt by those government authorities.  Andy_UA mentioned it.

    See if provincial government spends all the money then there is no need for federal spending ,
    the fact is both State and Fedral government has to spend and a drop in Fedral spending means programs will be affected .

    In India both the Center and State spends on education , while the Center subsidises many education programs and funds many primary education program, a cut in spending from center affects the program.

    [quote="Austin"]If they have more money they better save it or spend on Infra , Health Care or Education.

    Weren't you the one who posted the article about billions being poured into infrastructure development that Putin promised?  Something like 32B?  Kinda odd you would ask the question when you provided an answer to your own question earlier.

    More like 13B for now but Russia i read spends very little in infra like 20 % compared to China's 40 % and Indias 30 % of GDP
    http://2013.therussiaforum.com/news/press-releases/news-19042013-9/

    Mr Anderson compared Russia with China in terms of infrastructure positioning. He said it is incorrect to compare Russian and Chinese infrastructure development directly. Russian total investments account for 21–22% of GDP, close to the global average, while China is the global outlier, with total investment of around 40% of GDP.

    But my point was there is no need to over spend on defence their Defence Spending as per SAP2020 is already very high , no need to over spend it as Putin said recently , if they have more money spend it on Education ,Medical and Infrastructure ......that pays long term far more then defence spending.


    2.6% growth is still growth.  Inflation is lower this year as well than it was last year, which is good too.  Inflation though is still high.

    May be but considering inflation is around 6 % they need 4-5 % not 2 , West inflation is very low 1-2 % so they can afford low growth.

    If you are interested in knowing about technological development in Russia, please go to either both of these sites:

    http://marchmontnews.com/ (all in english)

    and

    http://sdelanounas.ru/ (ignore the blog points, cause a lot of them are personal views not actual facts.  I would rather just concentrate what is posted by Rosstats and what not).

    Thanks for those links.

    Biggest thing to hit Russia recently in the past years is Technoparks.  It is starting to appear that technoparks are hitting almost every major and even non-major cities through Russia, in all regions.  Saratov, Daegestan, Tomsk, Irkutsk, Sarov (Nihzniy Novgorod), etc.  With the most infamous of them all, Skolkovo in Moscow which is a technopark but better classified as an inograd due to it being centeralized and being its own area outside of Moscow.

    Technoparks are technically set locations that have infrastructure that is either (usually) government built and or private/JV, and is considered a tax safe haven for businesses.  They get the proper energy, as well as infrastructure to run their R&D facilities.  These areas are more or less incubators for Reasearch and development centres for major industries in and outside of Russia, with benifits like I mentioned, Tax safety as well as proper access to logistics and infrastructure.  Very important for development, and these will be the deciding factors for huge portions of Russian economy and its development.

    The next step, is to solve some major issues that is stunting high tech growth in Russia: The communication between universities, and such facilities and logistics.  In USA, it is very common to have Universities to work along side major industries, to get the high tech development out on the market, while in Russia, Universities act like isolated chambers, where nothing goes out, even after they make breakthroughs.  I remember reading years ago about a Russian university coming up with a new form of hard drives using magnets in order to create significantly more space, have much higher read/write times, and more efficient.  But it really did not reach outside of the university so that gem of technology, is on a shelf collecting dust.  Let us hope they do not do such a move with the recent breakthrough in quantum computing technology.  Cause really, Russia is technically a high tech Giant, it just lacks proper communication and business structure.  I mean, Russia would end up being second country in the world to offer commercial quantum computing.

    What about MCST?  The Elbrus line of microprocessors are quite impressive.  Yes, SPARC is outdated and most are moving away from it, but the Elbrus R1000 is a 1GHZ SPARC processor that is quite efficient and effective for what it does, or the MCST Elbrus-2C, which, even though is 500mhz, it is quite efficient and has higher performance than a 2ghz Intel Atom processor.  There is massive potential of Russias semiconductor industry, but due to no real interest from officials and other industries to try to push out the products, many of it is kept away for special purposes (Elbrus-2C used specifically for military as it has 2DSP cores and thus great for radar applications).  But there is a push for apparently a new processor developed by MCST ordered from the Ministry of Industry, and I think it is Elbrus 4S, which would be fantastic, especially when under its own linux kernal environment.

    Phew, that was long.  But point I am trying to make is, that there is indeed lots of development going on.  Technoparks do not get a lot of limelight, but they are going to be the massive drive for future development, as well as future growth for MANY regions.   They cover various fields like Skolkovo with its Energy, Pharma and Mechanical R&D, while Dagestan, it will be Agriculture and chemical, etc etc etc.  So there is plenty being done, just it will not bare fruit for many years, as these are projects being developed now, in the works or are completed but only recently opened up with few already working.

    Agriculture is going to be major importance for Russia, next to construction, as the world increases its population, people need to eat.  Russia is second to Germany in terms of industrial strength, but Industrial strength can only take your economy so far, especially when you rely on outside sources to purchase your goods and there is already high demand from countries that produce it for cheaper due to cheaper labour (China/India).

    Long post but good one/

    How i wished the marked those processor and made an AMD from Russian Industry . Right now both commericial processor industry are US ones .
    Viktor
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    Post  Viktor Wed Jul 10, 2013 12:22 pm

    @Austin

    This article is exactly what I have been saying about new Russian finance minister. That he will in order to up Russian GDP growth prioritize small and medium bussines.

    Lending rates for small and medium enterprises to go down

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