Russia Defence Forum

Would you like to react to this message? Create an account in a few clicks or log in to continue.

Military Forum for Russian and Global Defence Issues


+37
navyfield
Hannibal Barca
As Sa'iqa
macedonian
Russian Patriot
dino00
Rpg type 7v
AlfaT8
Corrosion
ali.a.r
Hachimoto
Regular
Werewolf
gaurav
nemrod
Sujoy
Cyberspec
collegeboy16
KomissarBojanchev
medo
Mindstorm
Firebird
TR1
ricky123
TheRealist
TheArmenian
flamming_python
Viktor
Pervius
Austin
GarryB
vishal_lionheart
NationalRus
milky_candy_sugar
Admin
sepheronx
KRON1
41 posters

    Russian Economy General News: #1

    avatar
    Austin


    Posts : 7617
    Points : 8014
    Join date : 2010-05-08
    Location : India

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  Austin Sun Sep 22, 2013 6:39 pm

    We are on a gold standard now, even though it is not recognized

    If you believe that gold no longer plays a role, think again. In effect, if you know what to look for, the world is on a gold standard now.

    In 1971 the US ‘closed the gold window’ starting an era of global fiat money reference pricing that has been unprecedented in history. Never has the world operated on the basis of no country having a currency tied to something with intrinsic value like Gold. The ‘petro-dollar’ - a US dollar exchange rate based on the deal struck between Saudi Arabia and America - for the US to buy their oil and for the Saudis to buy US dollars and bonds in return - started a period of oil companies (with the military machinery in their pocket) bullying the world into buying US dollars or getting cut off from oil and dollar supplies led to our current political situation with the US now involved in multiple wars in various oil dependent economies and their satellites - and this lulled many into believing that Gold no longer played a role, but recent events prove these assumptions wrong.

    Leading up the news that the Federal Reserve would not ‘taper’ their bond buying (QE) program we saw a precipitous drop in the price of Gold. Since I knew (like others including Peter Schiff, Bill Fleckenstein, Michael Pento and even James Rickards who stated as much on “Keiser Report”) that the Fed cannot ‘taper’ at any point going forward without throwing their entire Ponzi scheme into the ditch (causing every major bank in the world to instantly collapse) it was interesting to see the price of Gold trade down - unless you know the Fed, working alongside bankers on Wall St. and the City of London - are actively managing the price of Gold (along with stocks, bonds and currencies). Knowing that the Fed (who is implicated in every recent major market rigging scandal covering Forex, energy markets and credit default swaps) knew that it would make an announcement that would cause a buying panic in Gold (that they were going to debase the currency some more) - it had to go into the market and drive the price of Gold down ahead of the announcement or risk seeing Gold pop to new all-time highs of $2,000 or more.

    I commented a few weeks ago that to understand the Fed you have to understand that it, along with JP Morgan and other TBTF banks, are one giant hedge fund. And this is a huge negative for supporters of free markets who believe prices should be determined by the market - not the Fed. Surprisingly, a few days later Warren Buffett made the same observation. He said the ‘Fed is the most successful hedge fund in history.’ For Warren this is true. He is on the receiving end of the biggest transfer of wealth in history from workers and savers to borrowers and speculators. But for those not on the Fed’s list of recipients of hundreds of billions worth of interest free loans that never have to be paid back the fact that the Fed is a giant hedge fund is devastating. It’s no coincidence that the day after the ‘no tapering’ of ‘food stamps for bankers’ aka QE was announced the government announced that food stamps for the non-recipients of the Fed’s free money were told that they can expect a ‘taper’ in the form of a cutback.

    The huge price drop in Gold before the taper announcement is ‘smoking gun’ proof the Fed does exactly what Warren Buffett says they do: operate like an enormous hedge fund; making free loans to ‘friends,’ manipulating markets with impunity, disrupting price discovery with high powered algo trading fraud and pressuring governments to submit to various extortion schemes like TARP (created by Goldman Sachs alum and Treasury Secretary Hank Paulson.

    In effect, if you know what to look for, the world is on a gold standard now. The price of gold is telling you that the Fed Ponzi is running at full tilt and that the ravages of having such a destructive mechanism at the heart of the economy are unraveling. Because even with all that effort, the trend of the price of Gold is still higher and at some point the ability to keep it down will fail and then; as Warren Buffett also said; ‘You can see who’s not wearing a bathing suit when the tide goes out.’
    sepheronx
    sepheronx


    Posts : 8530
    Points : 8792
    Join date : 2009-08-06
    Age : 34
    Location : Canada

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  sepheronx Sun Sep 22, 2013 7:28 pm

    That makes sense since major economies are putting a lot into gold. China, India, Brazil, ect. Russia increased gold reserve to already over 1000 tons.
    avatar
    Austin


    Posts : 7617
    Points : 8014
    Join date : 2010-05-08
    Location : India

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  Austin Tue Sep 24, 2013 7:19 am

    Russia really needs to accelerate its gold production and buy gold as US Dollar/Bond Market collapse is inevitable in the next 5 years or so and its better to get rid of $$$ and US Bonds and opt for Gold and IMF SDR.

    Chinese are buying a lot of Gold openly and from black market and they are increasing thir Gold Reserve in anticipation of Yuan getting Fully Convertable and getting Reserve currency status.

    Russia needs atleast 4-5 T of Gold to back up its Rouble and to make it fully convertable in the next few year
    avatar
    Austin


    Posts : 7617
    Points : 8014
    Join date : 2010-05-08
    Location : India

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  Austin Tue Sep 24, 2013 7:23 am

    Once in EU, Ukraine will have no chance to join Customs Union


    MOSCOW, September 23 (Itar-Tass) - After integration into the European Union, Ukraine will have no chance to join the Customs Union of Belarus, Kazakhstan and Russia, Prime Minister Dmitry Medvedev said.

    “There will be no chance to join the Customs Union after that,” Medvedev said at a meeting with the ranking members of the Federation Council, the upper house of Russia’s parliament, on Monday, September 23.

    He also said that “the special partnership regime” would no longer apply to Ukraine after its integration into the EU.

    The prime minister noted that the Association Agreement between Ukraine and the EU, to be signed at the Eastern Partnership summit in Vilnius this November, would apply before the document was ratified.

    Ukraine cannot combine its associated membership in the European Union with integration into the Customs Union Medvedev said earlier this month, recalling the Latin expression “aut Caesar aut nihil,” which means “all or nothing.”

    “All this talk that one can be here and there at the same time is a ruse, a wish to fool the people that they can be a little bit here and a little bit there, getting dividends everywhere. It doesn’t work like this,” Medvedev said.

    “If Ukraine has made its choice in favour of the European Union, we wish our Ukrainian friends the closest possible integration with the European Union. Let them earn money for their national budget from that participation, but we have doubts that this will bring them big benefits. But if they have made such a choice, it’s their decision, and let the people of Ukraine assess their actions,” the prime minister said.

    “The situation is quite simple: accession to the Customs Union will be practically closed for our Ukrainian colleagues if they sign the Association Agreement with the EU states,” Medvedev said.

    First Deputy Prime Minister Igor Shuvalov also said Ukraine could not be in the European Union and the Customs Union at the same time.

    “We think it will be impossible to create a common customs union with us on the terms that are put forth in this agreement [on association between Ukraine and the EU,” Shuvalov said after talks between Russian Prime Minister Dmitry Medvedev and his Ukrainian colleague Nikolai Azarov in late August.

    Shuvalov said he saw no prospects for further discussion on Ukraine’s contemporaneous membership in the EU and the Customs Union. “I think that further negotiations on this issue will be pointless,” he said.

    Customs Union countries are key trade partners for Ukraine. In 2012, trade turnover with them reached 63 billion U.S. dollars, making up 36 percent of Ukraine’s overall export.

    Ukraine has no status in the Customs Union now as there is no status of observer in this organisation.

    On September 18, the Ukrainian government approved the text of the Association Agreement with the EU. Sections dealing with economic cooperation make up the biggest part of the document. There are seven sections in the agreement, which contains 486 articles.

    In additional to the general principles, the agreement has sections concerning political dialogue and reforms, political association, cooperation and convergence in the field of foreign policy and security, trade, economic and industrial cooperation, financial cooperation, the fight against fraud, as well as institutional, general and final provisions.

    The principles of free market economy will provide the basis for relations between Ukraine and the EU. They will also cooperate in fighting money laundering and financial support for terrorism.

    The Association Agreement was initialled in 2012. After a technical check-up, the sides are now translating it to Ukrainian and the languages of all EU member states. Once that is done, the document will have to be signed and ratified.

    The agreement will “create totally new conditions for the development of Ukraine,” Ukrainian Foreign Minister Leonid Kozhara said. “The free trade area with the EU takes into account the interests of all our manufacturers. Where interests were infringed upon, Ukraine conducted negotiations and acted persistently.”

    The government will set up a high-level working group to draft proposals on how to minimise possible risks from the implementation of the agreement for the Ukrainian economy.

    Kozhara admitted that “some problem issues” remained such as accelerated standardisation and adoption of regulations, but “this is a matter of implementation in the first years of the Agreement’s application.”
    avatar
    Austin


    Posts : 7617
    Points : 8014
    Join date : 2010-05-08
    Location : India

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  Austin Sat Sep 28, 2013 8:36 am

    http://government.ru/en/news/6202

    The time of simple solutions is past
    Dmitry Medvedev's article

    1. The beginning

    2. The Steps

    3. Crossroads

    4. Strategy

    5. Solutions

    6. The Future


    1. The beginning

    Five years ago it became obvious that a global economic catastrophe was beginning. I remember very well the first G20 anti-crisis summit meeting in Washington and the views which I and the majority of my colleagues expressed there.

    From a speech at the G20 summit in Washington on November 15th, 2008: “All of the speakers have tried to establish a diagnosis of this crisis. This is a question that requires deep and thorough study. I want to say that comparisons with past crises do not hold up. What we face now is not the Great Depression of the 1930s, and not the crises of the 1970s-1980s. This is a twenty-first century global crisis. “In my view, it shows that a number of the principles underpinning the post-war economic world order no longer work today. We see that many of the international institutions and organisations (including security organisations) established at that time are no longer able to cope with today’s demands. This is why we need new ideas for today, ideas just as powerful as those put forward decades before to address the challenges of the post-war period.”

    Most of these conclusions proved to be true. But at the time when they were made no one could gauge the depth or length of the crisis. Experts discussed what letter the course of the global economic process would look like – W, V or L. The most attractive option was V and the least attractive was W, with alternating periods of recession and growth. Today we see that it looks very much like the square root symbol. The initial plunge gave way to recuperative growth and then the developed countries almost levelled off.

    The debt burden remains excruciatingly high in most G8 countries, excluding Russia, also because attempts to reduce it rapidly will likely provoke a long stagnation period. The European economy is balancing on the edge of a recession, and growth in all BRICS countries has slowed down. The US economy has not yet found a fail-safe solution to the problem of sweeping unemployment, and many Americans have barely started to repay their debts. Russia’s economic growth has also slowed considerably. Its stock indexes are now as low as in early August 2008.

    We have been forced to review our anti-crisis policies. Let me remind you what the Russian leadership has done to reverse the economic slowdown.

    The Bank of Russia was lowering the rouble exchange rate very moderately, at the same time increasing the number of instruments for refinancing commercial banks. This helped to maintain public trust in the rouble and to prevent a landslide withdrawal of bank deposits. The Government has overhauled the structure of budget revenues and increased funding for the priority spheres which are vital for economic revival and for preventing a dramatic decrease in domestic demand. Large companies were given additional loans and guarantees and so could restructure their debts, stretching them out over a longer period and thereby preventing mass bankruptcies. Active employment and small business support programmes were implemented, including in single-industry cities.

    These anti-crisis policies were implemented concurrently with the implementation of national priority projects. We started modernising the education system and emergency and high-tech medicine, and we also indexed maternity capital, which allowed us to maintain the birth rate and to prevent depopulation.

    Russia joined the WTO after 20 years of talks, accepting the common rules which it now can not only use, but also influence. We created the Customs Union with Kazakhstan and Belarus and strengthened coordination within the framework of the SCO and BRICS. We are learning to use the benefits of international cooperation to the advantage of national interests but without infringing on our partners’ interests.

    Overall, the crisis has taught us many things. We now know what to do in an economic downturn, and we are ready to honour our commitments to our people, who have given us a huge credit of trust. The outcome of elections has confirmed that we are doing the right thing: unlike in the majority of developed countries, the ruling political force has not been replaced in Russia. This is the advance payment, and we will have to work hard to prove that we are worthy of this trust.

    Changes (%) in 2011 compared to 2008:

    GDP – up 0.5%

    Industrial production – up 2.7%

    Personal income – up 9.7%

    Unemployment – down 3% (as of December 2011)

    Birth rate – up 4.8%

    Mortality rate – down 6.9%


    This work continued as soon as the new Government was formed in May last year. I put forth seven key tasks for the year: budget planning based on a strict budgetary rule, adoption of the main Government programmes, fulfilment of social development tasks formulated in the presidential executive orders, step by step privatisation of surplus state-owned assets, comprehensive implementation of the National Business Initiative roadmaps, accelerating the reform of the civil service and launching Open Government mechanisms. We have fulfilled all of these tasks, and we are proceeding according to plan regarding medium-term goals. However, once we started working, it became clear that the global economy, and consequently also the Russian economy, was improving slower than we expected.

    2. The Steps


    According to our former forecasts, GDP growth rates should have exceeded 3%, and we hoped for a revival of the economy in Europe (the EU accounts for half of Russia’s foreign trade). But the depth of the debt crisis and a plunge in competitiveness in many European countries have proved so significant that, judging by all appearances, we will have to wait several more years for real and stable growth in Europe. As prominent US economist Kenneth Rogoff said not so long ago, growth is an illusion in periods of very high public debt…

    I will name several areas where we have managed to achieve headway.

    First. Budgeting obeys the budget rule. Let me be frank: it is not easy to work under these stringent budget restrictions. Next year we will have to cut our planned budget spending by 5%. But having a balanced budget and avoiding sharp fluctuations is more important.

    Second. We have linked every area-specific programme both with other programmes and the main budget policy parameters. As a result, the Government has a balanced action strategy for several years ahead, and this strategy is reflected in several dozen state programmes.

    Third. All the key measures of the National Entrepreneurial Initiative have been implemented. It is of fundamental importance for the Government to carry out what we agreed with the business community. This is about tax and customs administration, access to engineering infrastructure and competition, government procurement, construction market regulation, and a number of other economic spheres.

    Fourth. Our domestic business support system is being reformed in line with Russia’s WTO commitments. This was particularly difficult in agriculture, which has emerged as a driver of economic growth in recent years. But we have managed to bring into play so-called green box subsidies and they work fairly well.

    Fifth. We have approved tax and customs benefits for investment projects in far-off regions. A case in point are the investment projects in the Russian Far East and Kaliningrad and mining on Russia’s continental shelf and in other hard-of-access localities. Hopefully this will considerably increase the amount of investment in new businesses.

    And, sixth, (although we have done much more than this list suggests) a number of major infrastructure projects are underway that help unite the country and secure its stable long-term development. New railways, motorways, airports and seaports are being built, some of which as part of public-private partnerships.

    3. Crossroads


    Most of the measures I have mentioned will yield a substantial effect only in the mid-term. The current Russian economic situation is determined by an unfavourable external environment and also by the burden of unsolved problems.

    Economic development forecasts are quite pessimistic. This year, it appears that GDP growth rates will not exceed 2%. I would like to note that it is for the first time since 2009 that growth rates are lower than in the global economy. Increased outlays of entrepreneurial activity (prices for the products and services of natural infrastructure monopolies, salaries and interest rates) make it unprofitable to continue the production process at a considerable number of old facilities and to implement serious investment projects.

    August 2013 on 2007: Gas prices (without taking population into account) + 115%

    Electricity prices (without taking population into account) + 71%

    Actual salaries + 74%

    Real effective exchange rate of the rouble + 16%


    Production continues to expand almost solely through the implementation of major investment projects involving the state and state-controlled companies, by raising the incomes of public-sector employees, by issuing additional subsidies to the agricultural sector and some other sectors against the backdrop of high crude oil prices. But this source of development remains limited because it depends on the favourable oil-price situation. A rigid budget regulation is needed in order to guarantee the fulfillment of all social obligations of the state. But, in the future, this makes it impossible to rely on state demand alone. Therefore efforts to ensure stable sources of sustained economic growth in the non-public economic sector are becoming critically important.

    OECD economists noted in their “Russia: Modernising the Economy” report that “Russia still has a long way to go to reach the living standards of the most advanced market-oriented countries, despite clear improvements in the past decade. To narrow the gap, Russia needs to modernise its economy, reduce its dependence on revenues from natural resource extraction and ensure more sustainable and broad-based growth. By making it more attractive to live, study, work, innovate and invest in Russia, the country can free the great potential of its people and ensure growth well beyond its natural resource endowment.”

    I believe that the protection of private property and competition remains our unconditional political priority. The Russian economy still posts low investment levels, and this is not only caused by specific arithmetic calculations of potential capital-efficiency volumes. Investors still harbour irrational fears of working in an incomprehensible and sometimes unpredictable Russia. Add to this the absolutely explainable distrust of public institutions, including the judicial system and law-enforcement agencies. This is something which is very sad. As Fyodor Dostoyevsky wrote, capital likes external and domestic stability, otherwise it hides.

    Among other things, this situation is caused by the fact that many officials, judges and police officers (although, of course, not all of them) still believe that state property, and therefore state companies, have the right to better protection, and that these rights are infinitely greater than those of individuals. They also believe that the latter pursue exclusively personal interests and are therefore suspicious and must be rigidly controlled.

    The situation in the national banking system is an illustrative example of this. On the one hand, the banking system has proved its stability during serious crises, and it has preserved private savings in cooperation with the state. And this is, certainly, good. On the other hand, its structure can hardly be called optimal. The five largest banks, which are directly or indirectly controlled by the state, account for 56% of private deposits and for 53% of the entire economic credit portfolio. These banks receive obvious privileges from the state, including state companies, and they enjoy virtually unlimited state support. At the same time, almost 1,000 banks are unable to effectively integrate themselves into the state-assistance system. This impairs competition on the financial market, and there are no major regional banks either. Moreover, sky-high interest rates hamper entrepreneurial and investment activity.

    This is only one example which highlights the overall situation concerning competition and the correlation between the public and private sectors. Not a single country with an advanced legal and political system finds itself in such a situation, and we must end this state of affairs if we want to become a competitive country with a developed economy. The obvious key aspects of our work are as follows: improvement of the entrepreneurial climate, enhanced activity of the national capital and increased foreign investment, technological retooling of the economy and a new policy regarding the labour market.

    We have virtually reached a crossroads. Russia can continue to move ahead very slowly and to show close-to-zero economic growth rates, or it can take a major step forwards. The second option is fraught with risks. But, if we choose the first scenario, which supposedly may make it possible to preserve current prosperity, then this would be even more dangerous. This route leads to losses, to an abyss.

    4. Strategy

    How does the Government see the way to encourage growth amid low global demand and strong competition?

    There are three underlying principles.

    First, we need to give businesses the widest possible opportunities for action and initiative. Government support needs to be rechanneled into creating modern effective jobs in innovation based value chains (from theoretical science to commercial production). Second, we need to start using the existing resources much more efficiently than we are doing now, including to raise labour productivity. Third, we need to ensure high-quality state administration, people’s security, protection of property rights, and the required social and physical infrastructure.

    Russia has found itself in a unique position compared with other countries with a similar growth pace. We have the lowest unemployment; moreover, the Russian economy will likely struggle with a shrinking workforce over the next few years, which entails a heavier tax burden as a result of the growing medical and social security spending on an aging population and from the shortcomings of the pay-as-you-go pension system. Employers will likely have problems finding personnel, with uneven regional labour markets.

    Therefore, what we need is a new approach to the regions’ economic development. Regional diversity gives Russia an edge, so we need to identify points of potential growth and provide targeted support. Interestingly, over the last few years, regional growth rates have become quite independent from their mineral reserves. Growth is driven by the regional leaders’ and local elites’ ability to promote their regions – not just to sit there waiting for government support but to work to have their initiatives backed by the people and included in federal stimulation programmes.

    By combining our efforts, we will be able to abandon our former policy of supporting employment at all costs, regardless of important economic factors – a policy characteristic for periods of recession and often justified amid crises. Such policies should be applied with caution; to achieve social stability we need to create conditions for professional growth, not to try and maintain something that has already had its day. Maintaining social stability and modernising the economy are interrelated, not mutually exclusive processes.

    We need to reduce conscription further, while manning the armed forces and law enforcement agencies with people serving on a contract basis. Other policies should be aimed at stimulating more effective work at government-financed companies and services and later retirement of highly-qualified workers.

    Free entrepreneurship and a sound competitive environment are compulsory conditions for modernisation and innovation- based development. Russia was one of the developed economies for the bigger part of the 20th century, despite many dramatic developments, and was the uncontested leader in some industries. I am confident that Russia is capable of regaining that position by focusing on human resources – their intellectual and creative potential – the trailblazers of growth. Yet it would be wrong to just copy recipes invented in the past. The world has progressed a long way from that time, and we need to use new methods.

    I think it is critically important to elevate fundamental and applied science to a higher level and to return national education to a leading position and eliminate the digital divide. I am sure that the Government will continue playing a leading role in addressing these issues. But we need to do this the sooner the better, including by attracting private investment.

    We need to build a system for the reproduction of commercially justified innovative technology which would help increase labour productivity, improve environmental security, and ensure consumer convenience. The main obstacle here is the poor quality of our regulatory environment. We will complete the work on an improved legal framework within the next few months.

    We have only limited access to advanced international technology for many reasons such as politics, customs formalities and other regulations. The costs of importing technology into Russia are higher than in other countries. I think it would be expedient to cancel import duties on materials and research equipment, and expand the practice of issuing government grants and subsidies for the import of equipment, components and materials needed for research.

    We will continue developing the Skolkovo Innovation Centre as well as other innovative projects and technology parks. Large companies and investors should invest more in research and establish their own universities. It would be good if Gazprom, LUKoil, Rusal and Rosneft were to have their own universities, or at least departments, and the Government should think how we could encourage such investments – possibly with tax incentives.

    These investments should yield good profits. At present, unfortunately, nearly every project faces a recruitment problem – who will work there? Is the average Russian ready to meet modern labour market requirements? We know the answer, and that answer is more often “no” than “yes”.

    Given the slowdown of growth, we do not want the Government to play an unjustifiably big role in the economy, and we do not want state officials to create excessive barriers for doing business.

    I am confident that government agencies need to concentrate on performing their core functions and outsource or divest other functions, and to continue increasing transparency and accountability. The establishment of public oversight institutions, public discussion and the adoption of state programmes and the federal contract system are important steps toward these goals.

    Our long-term goal is to build a smaller, decentralised and more efficient public sector of the economy. A situation where its productivity and return on investment are far lower than in the comparable segments of the private sector is unacceptable. It is impossible to raise effectiveness without additional investment in fixed capital and personnel training. It is also important to keep operating expenses efficient too, first of all in the procurement of goods and services, and in some cases it would be wise to stop spending taxpayers’ money on certain projects and agencies if they are ineffective.

    5. Solutions


    In view of increased competition, reducing costs is the key condition for ensuring the competitiveness of Russian companies. The infrastructure monopolies’ rates are a major factor and a very complex issue. However, few people still doubt that high rates are a major hindrance for the majority of Russian businesses and that they slow economic growth.

    We will begin by adopting long-term pricing principles and place the largest monopolies’ budgets under public supervision. As for the near future, the Government has decided to freeze the rates of the basic infrastructure monopolies in 2014 and to peg them to inflation in the subsequent two years. However, this must not affect substantiated investment programmes, or more precisely, this must not infringe on the rights of infrastructure monopolies’ clients.

    The prices of most other infrastructure companies in the utilities, communications and passenger transport industries will be adjusted in the next few years in accordance with the “inflation minus” pricing formula. The parameters may vary, depending on the initial situation and certain structural decisions, for example, minimisation of cross-subsidising in power generation, gradual liberalisation of the gas market and introduction of differentiated baselines in some commercial services, as well as modernisation of the postal service.

    The removal of non-competitive enterprises should be accompanied by the establishment of new businesses that can create effective jobs. This is the essence of economic modernisation. At the same time, the focus will be on supporting small and medium-sized businesses.

    First, we have reviewed the decision on a considerable and immediate increase of insurance payments: the rates will be increased step by step. I’d like to emphasise that we are not talking about increasing the tax burden, but about ensuring a proper level of insurance for small companies’ personnel, who must have the same rights as the personnel of any organisation.

    Second, small businesses will be offered more incentives in the sphere of information technology. Starting in 2014, they will be available to companies which employ at least seven people (down from at least 30 before).

    Third, I believe it would be expedient to give the regions and local authorities the right to introduce tax breaks for small start-up businesses in some sectors, primarily in production. This method has been used in many countries. Of course, there is a risk that unscrupulous people will try to evade taxes. But I believe that proper oversight measures can minimise this risk.

    Fourth, we will increase financial assistance to small and medium-sized businesses. Vnesheconombank will use the National Wealth Fund money it holds to issue investment loans to small and medium-sized companies, while the Central Bank of Russia will refinance these securitised loans. In addition, we will greatly increase state guarantees for small companies, including by creating a federal guarantee fund and by broadly using regional guarantee funds.

    Fifth, we should use positive foreign experience to approve quotas for the purchase of goods and services from small and medium-sized enterprises (SMEs) within the framework of the state and municipal procurement systems, as well as for purchases by large state-owned companies.

    And lastly, it is highly important to implement SME support programmes in single-industry cities. We must again review the performance of special programmes approved for such cities and create mechanisms for their financial and organisational support if and where necessary.

    Taken together, the Government has approved the allocation of over 100 billion roubles for these purposes in the draft of its three-year budget.

    But government support for business is not enough. The issue of cheap long-term loans is even more important. The Government and the financial mega-regulator established on the basis of the Central Bank are drafting measures to protect pension accruals and to expand the spheres of their investment. Last spring the Government made public a package of tax measures aimed at stimulating retail investors’ long-term investment and promoting the evolution of the national financing industry. I hope the State Duma will discuss a draft law to this effect this autumn.

    We will work to ensure macroeconomic stability, promote the evolution of our financial market and the development of Moscow into an international financial centre. We will continue working to create a favourable environment for long-term foreign investment. The Central Bank’s policy of inflation targeting and floating exchange rate will help us tackle the above issues, in particular, ensure the issue of really long-term loans.

    6. The Future

    The world is not sitting on its hands, and global competition will become increasingly tough. This could be Russia’s opportunity to change its role in the international division of labour. Compared to other countries, Russia has a relatively small debt and very large reserves.

    But the time of simple solutions is past, and we must not underestimate the current economic challenges. There is a difficult path ahead. We must proceed to a post-industrial economy and a smart state whose main value is the individual, amid difficult conditions that can be defined as a crisis. We must reach the trajectory of sustainable development without losing the achievements of the past few years in reducing poverty and supporting the most vulnerable groups of people and regions.

    But the Government alone cannot create such as state. It must rally the assistance of socially responsible individuals who will be its equitable partners in this difficult project. Moreover, awareness of this responsibility has nothing to do with social status, because workers, freshmen, academicians, businesspeople and officials alike ought to feel this.

    The state should only change together with people. Over the past year, the Government widely used feedback from civil society and business when taking important economic policy decisions. We welcome constructive public initiatives and consult business and experts when coordinating the majority of our decisions. The operation of its departments has become more open to public control, and Open Government has become a fact of life. We will continue to improve this format, and the same must be done at the regional and municipal levels.

    We must work together to take the next major step towards implementing our plans, to weather the global economic downturn and ultimately to create a strong Russia with a high quality of life.
    Regular
    Regular


    Posts : 3868
    Points : 3842
    Join date : 2013-03-10
    Location : Ukrolovestan

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  Regular Sat Sep 28, 2013 9:32 am

    As european I hate to see Ukraine being dragged in to EU. And especially EU doing dirty job through my country. No one sane wants another country that would only bring EU to collapse. It's only good for countries like Germany- after deindustrialisation of Ukraine they will use it as a additional market. Prices of products will be same as in rich countries, but there will be lack of jobs, small wages and etc. Emigration will be massive. Good for rich aging EU countries as they get qualified workforce without the need of training it themselves. Same formula worked just fine with other ex soviet countries. Not saying they should kiss Russian hiney, but Ukraine is not small country, they could have some backbone to not be manipulated by Russia or EU
    flamming_python
    flamming_python


    Posts : 8988
    Points : 9050
    Join date : 2012-01-30

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  flamming_python Sat Sep 28, 2013 11:05 am

    Well over 70% of Ukrainian engineering and high-tech goods exports are to Russia

    Their economy has been stagnating or contracting for the past 2 years.

    I'm very curious to see how the EU could possibly make up for the current situation, because they have made a lot of promises; yet now the Ukrainians will expect the EU to deliver..
    AlfaT8
    AlfaT8


    Posts : 2465
    Points : 2456
    Join date : 2013-02-02

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  AlfaT8 Sat Sep 28, 2013 4:37 pm

    Russia’s GDP Shows Zero Growth, Outlook Grim – Minister

    SOCHI, September 28 (RIA Novosti) – Russia’s GDP in the first eight months of the year grew 1.5 percent year-on-year, but seasonally adjusted month-to-month growth was zero, Economic Development Minister Alexei Ulyukayev said Saturday.

    August has turned out to be “worse than July,” he told an international investment forum in the southern Russian city of Sochi. “There are no visible signs of change for the better.”

    The minister also urged the Russians to prepare for a worsening unemployment situation next year due to economic stagnation.

    Unemployment is expected to reach 6 percent in 2014, Ulyukayev said.

    The current unemployment rate is slightly above 5 percent.

    He also said the ministry does not expect inflation to slow down in October, and is expected at 6.1-6.2 percent.

    As of September 23, annual inflation remained at 6.2 percent.

    Russia’s Finance Minister Anton Siluanov said earlier this month his ministry expects inflation to reach 5.5-6 percent in 2014, although a freeze in tariffs for natural monopolies could hold it down to 5 percent or lower.

    http://en.rian.ru/business/20130928/183812181/Russias-GDP-Shows-Zero-Growth-Outlook-Grim--Minister.html
    flamming_python
    flamming_python


    Posts : 8988
    Points : 9050
    Join date : 2012-01-30

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  flamming_python Sat Sep 28, 2013 7:20 pm

    There is some hope for this year

    http://www.nasdaq.com/article/russia-economy-minister-2013-gdp-growth-may-be-above-government-forecast-of-18-20130927-00022
    Russia Economy Minister: 2013 GDP Growth May Be Above Government Forecast of 1.8%

    SOCHI, Russia--Russia's gross domestic product growth this year may be above the government's forecast of 1.8%, the country's economy minister said Friday.

    "This year's forecast is realistic and even conservative," Alexei Ulyukayev said at an international investment forum in the southern Russian city of Sochi.

    There is an output gap in the economy, which gives the central bank room to ease monetary policy, although this would be the sole decision of the central bank and would take into account the economic situation, he added.

    The government has repeatedly lowered its economic outlook for this year. This week, both the International Monetary Fund and World Bank also cut their growth forecasts for Russia for this year.

    Read more: http://www.nasdaq.com/article/russia-economy-minister-2013-gdp-growth-may-be-above-government-forecast-of-18-20130927-00022#ixzz2gFgL7UeD
    For the next two years the hope is that the infastructure investments will drive some growth

    http://rbth.ru/business/2013/09/27/investment_in_infrastructure_to_fuel_economic_growth_30229.html
    Investment in infrastructure to fuel economic growth

    Acceleration of economic growth to 3–3.3 percent in 2014–2016 will be assisted by the investment of oil revenues into infrastructure, an easing of monetary policy, and growth in private investment, the Russian Ministry of Economic Development hopes.

    Investments will become the main driving force of the economy in 2014–2016: Russia does not possess any other sources of acceleration in growth, says the Ministry of Economic Development in its updated macroeconomic forecast for 2014–2016.

    The Ministry stipulates that a number of conditions must coincide to provide for any acceleration. First, improving the business climate and reducing external risks should lead to a reduction of capital outflow and to a resumption of capital inflow from 2016.

    Then, businesses, having positively assessed growth in domestic and external demand, will increase demand for credit; the Central Bank will start to cut its interest rates, which, in turn, will accelerate growth in lending to companies from the current 14 percent to 16–17 percent in 2014. Finally, credit funds will be used to invest in import substitution and in improving the competitiveness of products.

    The government should support the acceleration of investment by investing in the key infrastructure projects: the high-speed highway from Moscow to Kazan, development of the Baikal-Amur Mainline and the Trans-Siberian Railway, and the Central Ring Road project in Moscow Region.

    The Ministry admits that a risk to the baseline scenario is the assumption that investment growth will increase to 3.9–6 percent (minus 1.3 percent in the period of January–August 2013, the forecast for the year is 2.5 percent). There is a greater chance that economic growth will be lower than predicted than the chance of higher growth.

    However, investment can, in any case, stimulate economic growth at least over the next year, due to technical reasons.

    The drop in investments this year is also mostly down to technical reasons, explains the Ministry. Gazprom, which accounts for about 10 percent of all capital investment in the Russian economy, has completed the construction of the Nord Stream pipeline, cutting its investment program by nearly one-third (see the respective article on this page).

    The government has also completed a number of construction megaprojects, and government investment has decreased by 20 percent in real terms. Over the next year, there will be no such decline, and the "base effect" that had a negative impact on economic growth this year will, on the contrary, enhance growth.

    This effect in the second half of 2013 is predicted to improve growth in GDP to 2.2 percent, compared to 1.4 percent in the first half.

    Meanwhile, growth in private investment (excluding state-owned companies) is projected to slow down from 11 percent this year to 5 percent in 2014. Therefore, the Ministry expects a rather large contribution from quasi-budget projects — construction of roads using money from the National Welfare Fund (NWF).
    Related:

    Infrastructure is an opportunity to increase potential growth, and the government should therefore actively participate in this," says Oleg Zasov, director of a department in the Ministry. However, budget rules impose restrictions, and, therefore, oil and gas income is the only source of funding available.

    An easing of the Central Bank's monetary policy is expected to maintain the high rates of growth in consumer lending — at least 20 percent per year, offsetting the slowdown of the growth in real incomes. As recently as a month ago, it was assumed that the latter, in 2014–2016, would be higher or at the level of 2013.

    This growth will be slowed down not so much because of the decision to index tariffs for the population in 2014 (their addition to the inflation rate will only be about 0.2 percentage points), but because of the pension reform that starts in 2015.

    It stipulated increased payments for pensionable service of over 30 years for women and 35 years for men, but it was decided not to implement this measure. According to the Pension Fund, more than 20 million (about a half) of today's pensioners have this pensionable service.

    Downward revision of the average pension for 2015 has led to a reduced rate of growth in real incomes of about 10 percent; the predicted growth has been downgraded from 3.3 to 3 percent. The average annual nominal growth of pensions for 2014–2016 will be lower by a quarter — 7.5 percent instead of 10 percent.

    An increasingly large share in the structure of consumption will be given to domestic goods, the Ministry of Economic Development predicts.

    The causes of Russia's slowdown are not cyclical but rather structural, and growth in GDP is unlikely to be higher than 2 percent over the next 5–10 years, says Ivan Chakarov of Renaissance Capital. There are two options to improve this rate.

    According to the expert, the state, as signals from the government appear to show, has not embraced the first option — structural reforms. Privatization has been put off and the pension reform is being delayed.

    The second option — to increase the national debt — is the only option available. By Renaissance Capital calculations, growth of external debt from its current 3 percent to 35 percent of GDP (which is only half of the level of India or Brazil, says Chakarov) will attract approximately $1.2 trillion in investment to the economy.

    "In the absence of reform, this is the only possible scenario for the government that would have a positive effect on the economy," said Chakarov at a Fitch conference. Money will be needed in any case, he says, with both the State Duma election and the new presidential election approaching.
    Naturally though reforms will have to be carried out sooner or later, lest the Russian economy stagnates.
    The current focus is apparently on driving down inflation.

    Well, inflation is not particularly being driven down; it's at +6% and looks to be rising again.

    So time to ditch that and go for growth again Cool 
    sepheronx
    sepheronx


    Posts : 8530
    Points : 8792
    Join date : 2009-08-06
    Age : 34
    Location : Canada

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  sepheronx Sat Sep 28, 2013 8:15 pm

    Inflation is down currently, but we will see if the end of tarrifs for monopolies will end up lowering inflation or not.

    Sad that GDP growth is low and economy is stagnating, but this is what will be the indicator for industries as a whole to modernize their facilities and production lines, as well as have the federal government look at other means of increasing GDP growth, or they could end up being defeated by another political party, which is not what they want.

    This are going to get interesting.  We may see, sooner than later, how new infrastructure development, and the investments in high tech industries like CNC machinery and Heavy Duty equipment like milling equipment, mining equipment, agriculture equipment, etc will drive the main economy.  As well, for both interest of the nation as a whole, the plan of investing heavily in social development, will be the big part of GDP growth in the future, as when more people in the nation has more money, higher standards of living, etc, they will be the big broad aspect of growth for Russia; a domestic consumption based.

    Exports will only take you so far, especially since that the economy is stagnating now, it is a sign that other countries are faultering and looking for alternatives, cheaper, for products and resources.

    As I said before, this economic development minister should be fired. He isn't doing his job properly it seems, as the economy is stagnating, and it is his duty to oversee the investment climates as well as to move specific investments or development over to the areas that will benefit Russian economy. He has done so in some specifications, but he has ignored the here and now as well, which is resulting in what we are seeing, hence he should be fired.

    He talks a lot, but doesn't seem to do anything about it.
    sepheronx
    sepheronx


    Posts : 8530
    Points : 8792
    Join date : 2009-08-06
    Age : 34
    Location : Canada

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  sepheronx Sat Sep 28, 2013 9:37 pm

    So they are not sitting on their tooshy over this:

    State Duma to debate draft law on released premium rates for small business in autumn session - Medvedev

    SOCHI, September 28 (Itar-Tass) - Russia’s parliament will debate draft laws on released premium rates for small-size business during the autumn session, Prime Minister Dmitry Medvedev said.

    Speaking at a round-table meeting within the Investment Forum Sochi 2013, Medvedev said, “From 2005 the government started an active campaign to subsidise development programmes of small- and medium-size business.”

    About 40 billion roubles were provided for this purpose in 2011-2012, the premier said, adding that a total of 60 regions had been involved in these programmes.

    Thus, over 425,000 people have been provided support in the sector of small- and medium-size business where at least 270,000 jobs were created, he said.

    Medvedev said the government did much to get access to financial resources by small companies. At the same time, he urged banks to learn to work with small- and medium-size enterprises.
    As well, this kinda stems to my opinion that Russia has to drive domestic consumption over export:

    Russian economics minister calls to stimulate supply instead of demand

    SOCHI, September 27 (Itar-Tass) - The demand-spurring economic model has exhausted its potentialities and should be replaced by a supply-spurring model, Russian Minister of Economic Development Alexei Ulyukayev said on Friday.

    “There are three driving forces of the economic growth, namely external demand, domestic consumer demand and domestic investment demand,” he said at an international investment forum in Sochi. “Our problem stems from the fact that these factors have exhausted their resources.” He said that there were many risks as concerns external demand. “There are risks of recession in European countries, the situation in Asia might deteriorate, which is fraught with a risk of downward export tendencies, decreasing external demand with all consequences for the budget,” he noted.
    As well, to kinda point out that Inflation is to decrease or hopes are that it will, here:

    Medvedev expects inflation to decrease by 4-5 percent in 2014

    SOCHI, September 28 (Itar-Tass) - Prime Minister Dmitry Medvedev hopes that inflation will reach 4-5 percent in 2014.

    This year inflation is expected to amount to 6 percent, the prime minister told Rossiya 24 Channel on Saturday.

    “We hope that inflation will be lower - within 4-5 percent,” he said, adding that this was related to “freezing” tariffs for infrastructural monopolies such as Gazprom, grid companies and Russian Railways.

    “The figures of inflation will have an impact on a corresponding interest rate of the Central Bank and on a real interest rate under which loans are being provided to commercial organisations and physical persons,” Medvedev said.
    If inflation drops, then that means more roubles out in the market which has more value, thus meaning more money to circulate.  If the aim is for domestic consumption, than this will definately drive the economy further and reduce Russia's reliance on selling abroad.

    My prediction on things are that Russia is going to have to have a healthy balance between export and domestic consumption, especially in specifics.  Domestic consumption will have to rely on end products being sold, more middle men to accumulate wealth (Middle men are always making the most profits) And manufactureres are going to have to be competitive.  If in case they cannot be, then they will have to make it easier for foreign companies to operate in Russia, so that the competitive goods will be manufactured in Russia and sold domestically, and in CIS Countries (to offshoot the fact that the companies are are going to make massive profit, so a lot of that money will end up leaving the country back to home country of where the headquarters of said company are).  Other thing too is banking sector needs to be better regulated and same with housing.  More infrastructure development means more investments, means more people could invest in it through mutual funds, etc.  More money circulating, eventually, means more money over all (Simplification of course).

    Future I see is that Russia will be more or less exporting the main things they are now, like Oil/Gas/Timber/Metals, and exporting mass amounts in terms of agriculture (meat, grains, etc) while the manufacturers are going to be on the smaller end of the spectrum of exports, like Cars, Trucks, Heavy industrial equipment, Energy Equipment, CNC equipment (mostly to CIS countries), Military and Farming equipments.  Maybe even smaller end will be other end products like refrigeration units and super computers (HPC's)(If Elbrus-4C becomes public, which will be the case since it is being funded by Ministry of Industry and Trade).  Although, electronics and end products like household materials are usually flooded market by China, S.Korea, Taiwan, etc.  So the Elbrus 4C HPC's may very well end up being for specialized industries like Nuclear power plants, Military industrial complexes, Ministries, etc.

    Domestic will more likely be end products that are manufactured in Russia either by Domestic company itself, Joint Ventures with other more well known companies, or outright foreign company manufacturing in Russia. So this will be on a large portion be Cars/Trucks, Logistical equipment, Agriculture equipment, End product foods like fast food, soda's, etc. Other products like refrigeration units, some household appliances and computers (if heavily regulated) will end up being main as well for domestic.

    We will see though. A lot of in terms of the future are in the hands of companies like MCST with Elbrus 4C as it will give competition to some already major companies, give Russia a huge leap in quality and capabilities in performance, and could be a deciding factor if many or all products made in Russia would use it, as the world moves to automation and digitization.
    flamming_python
    flamming_python


    Posts : 8988
    Points : 9050
    Join date : 2012-01-30

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  flamming_python Sun Sep 29, 2013 1:03 am

    sepheronx wrote:Inflation is down currently, but we will see if the end of tarrifs for monopolies will end up lowering inflation or not.

    Sad that GDP growth is low and economy is stagnating, but this is what will be the indicator for industries as a whole to modernize their facilities and production lines, as well as have the federal government look at other means of increasing GDP growth, or they could end up being defeated by another political party, which is not what they want.

    This are going to get interesting.  We may see, sooner than later, how new infrastructure development, and the investments in high tech industries like CNC machinery and Heavy Duty equipment like milling equipment, mining equipment, agriculture equipment, etc will drive the main economy.  As well, for both interest of the nation as a whole, the plan of investing heavily in social development, will be the big part of GDP growth in the future, as when more people in the nation has more money, higher standards of living, etc, they will be the big broad aspect of growth for Russia; a domestic consumption based.

    Exports will only take you so far, especially since that the economy is stagnating now, it is a sign that other countries are faultering and looking for alternatives, cheaper, for products and resources.

    As I said before, this economic development minister should be fired.  He isn't doing his job properly it seems, as the economy is stagnating, and it is his duty to oversee the investment climates as well as to move specific investments or development over to the areas that will benefit Russian economy.  He has done so in some specifications, but he has ignored the here and now as well, which is resulting in what we are seeing, hence he should be fired.

    He talks a lot, but doesn't seem to do anything about it.
    The one who irritated me the most on Friday was Medvedev with his stupid speech

    http://online.wsj.com/article/SB10001424052702303342104579100990073877478.html

    Yeah so Russian economy will be in trouble without reform?
    Thanks for that Mr. Medvedev
    But wait - ain't that your job?

    What the fuck is this guy doing repeating the same stuff in speeches all the time year after year; as if these very reforms are the responsibility of someone else other than him?
    Like, helloooo?
    He's got the 2nd most powerful position in the country, and has got it exactly because he has liberal and reformist credentials. So why exactly haven't these reforms been undertaken yet, why are there still stupid speeches being made around the country yet nothing is being actually done to correct the situation?
    sepheronx
    sepheronx


    Posts : 8530
    Points : 8792
    Join date : 2009-08-06
    Age : 34
    Location : Canada

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  sepheronx Sun Sep 29, 2013 2:09 am

    No different than Obama and crew talking of reforms, all at the same time, increasing debt ceiling.

    Lots of things are happening, like development of new industries and infrastructure, as well as reforms. But for some reason, talk of "More reforms" from Medvedev is kinda like repeating himself over and over, expecting changes here and now, when we wont hear/see changes for years to come.

    Start privatizing and or making many industries publicly owned I say, so that it would be in the companies interest to stay alive and do something about changes to make money, rather than expect bail out.
    flamming_python
    flamming_python


    Posts : 8988
    Points : 9050
    Join date : 2012-01-30

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  flamming_python Sun Sep 29, 2013 10:15 am

    sepheronx wrote:But for some reason, talk of "More reforms" from Medvedev is kinda like repeating himself over and over, expecting changes here and now, when we wont hear/see changes for years to come.
    That's exactly what I mean

    Putin and his team are frequently accused of talking but not doing anything. But I mean, even if doesn't live up to its promise - something is done. Putin, Rogozin, Serdyukov and others were talking about the need to re-equip 70% of the Russian military by 2020 with new or modernised systems; and we can see now that the process has started and there is considerable progress in this regard already.

    The same with all the talk of upgrading Russian transport infastructure; particularly the highways in Siberia and the Far East; with Putin memorably taking a drive along them to drum up attention and support.
    Well indeed that road has been pretty much renovated by now and similar infastructure is also being rebuilt or renovated.
    So we can chalk that up as a success too.

    But with Medvedev and his 'reforms', which he has been talking about ever since he first became president - well talk is all that we've seen. Medvedev has held the highest posts in the country including President, now Prime Minister - well OK he renamed the Militsiya to the Police, and probably a few other superficial changes. The man has had years, and years and I don't see what he has achieved.
    TR1
    TR1


    Posts : 5435
    Points : 5433
    Join date : 2011-12-06

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  TR1 Sun Sep 29, 2013 10:46 am

    It's not like Putin or Serdykov deserve any specific credit for any of that.

    Countries economy improved, MIC got funds, it produced things. None of that depended on their visionary or whatever leadership.

    I just can't separate Medvedev from the rest of the "gang" and the party.
    medo
    medo


    Posts : 4342
    Points : 4422
    Join date : 2010-10-24
    Location : Slovenia

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  medo Sun Sep 29, 2013 11:26 am

    Considering what Russia was in the nineties in Eltsin's era, we could say, Putin and his team achieve incredible results in those 13 years. Rome was not build in one day and Russia is very large country, so it take time to develop and modernize all parts. Building thousands of kilometers of roads and railroads take time. Building factories and agronomy capabilities also take time. What is most important is, that strategically important branches stay in state property.

    Russian economy have great potential for the future, because they have all resources at home, so no need to import and Russia have very low debt and high reserves.
    avatar
    Austin


    Posts : 7617
    Points : 8014
    Join date : 2010-05-08
    Location : India

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  Austin Sun Sep 29, 2013 12:22 pm

    TR1 wrote:It's not like Putin or Serdykov deserve any specific credit for any of that.

    If Putin does not deserve credit for making the economy then Yelstin should not be discredited for ruining it , guess it just happened ..... they did not mismanaged it much like Putin did not managed it well.
    avatar
    Firebird


    Posts : 1722
    Points : 1752
    Join date : 2011-10-14

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  Firebird Sun Sep 29, 2013 1:39 pm

    Its an interesting topic. Not least because I am involved in economics. Here are some of my opinions:-

    1)Inflation has been q high, but GDP growth has been sluggish. The big question however, is how that translated in the "real economy".
    Headline GDP values don't mean THAT much on their own. Because GDP can be an indicator of "internal transaction costs" more than real growth in prosperity. For instance, if we all start billing each other millions, rather than 1000s, GDP increases. However, real wealth does not. (Long time, this false growth may be identified in purchaing power comparisons, but even they have their flaws).

    2)I think Russia really needs to develop key industry sectors. IT (esp processors), maybe mobile telecoms etc, automotive, banking and finance, major "brands", and civil aviation. Ofcourse raw materials, petrochem etc are not enough. Nanotech and biotech would also be excellent areas.

    3)We have to be realistic and understand that it will take time to develop some areas. But some areas have been too slow. Not helped by corrupt morons like Yeltsin.

    4)Russia also has to answer questions about its place in the World. Will the Customs Union be a giant bloc? Should a partitioned Ukraine be part of it in the future? Should places like India, Vietnam, Venezuela be part of it? How close can Russia draw to China, the ASEAN bloc? Or should it be the EU?(which is struggling and has weaker growth prospects than Asia).

    5)The loss of oligarchical (and other high net worth) Russian capital is an issue. Does this reflect badly on Russia? Is it harming Russian growth? Abramovich alone has exported maybe 20bn USD of his own capital. Why didn't he use that money to develop places like Sochi, Vladivostok, Leningrand, Kaliningrad, Volgograd and places like that? Instead of sinking so much into London, the S of France etc.

    Maybe Medvedev's idea of Russian "offshore zones" should be explored? One for Asia and a warm climate one for Europe?

    6)Its good to see some Russians (who did NOT earn their wealth from corrupt means) doing well. But I know some people in Russia are talented and skilled, yet their income is significantly below contemporaries in Western countries. (Ofcourse the West has major problems of its own - esp among the young and over 50s).

    I think there is another concern in that Russia might develop more "class structure" - the plague that envelopes countries like Britain.
    Make no mistake, the original oligarchal class are nothing but a disease, multiplying and having chidlren that continue the abuse of the country, spreading the diseases that started under Yeltsin.
    Its this privilged, privately educated, multigenerational croney capitalism that harms economies as much as anything. The worst part is that its often hard to get people seeing and accepting the problem.


    7)WTO entry will be a pivotal issue. Perhaps there will be some efficiencies derived from the import of cheap, well produced goods.  There may also be benefits where Russia can export now, as the best producer. However, we should rememember there is rarely such a thing as a free lunch. Cheap imports can mean job losses and ultimately a weakening of a financial situation.

    8)The problem for the developed world in recent times has been not just loss of jobs to the 3rd World/Asia but also loss of PROSPERITY. Its hidden by the media often. Because the media is often nothing but the lackey of the cabal of globalists who manipulate global affairs as if the whole World is nothing but a game of Monopoly. (Because to them, IT IS!)

    I think we're certainly likely to see a "pullback" in the Russian economy. There's lots to be optimistic about. But WTO entry has to be very closely monitored. Many questions are yet to be answered...


    Last edited by Firebird on Sun Sep 29, 2013 3:52 pm; edited 1 time in total
    flamming_python
    flamming_python


    Posts : 8988
    Points : 9050
    Join date : 2012-01-30

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  flamming_python Sun Sep 29, 2013 2:41 pm

    TR1 wrote:It's not like Putin or Serdykov deserve any specific credit for any of that.

    Countries economy improved, MIC got funds, it produced things. None of that depended on their visionary or whatever leadership.

    I just can't separate Medvedev from the rest of the "gang" and the party.
    Yes but the thing is, is that what they said & promised is what happened.

    Obviously Putin is just one man; his actual responsibilities don't extend to supervising the MIC and so on. He's got a team under him and specific ministers for that.
    But he still has the responsibility overall; especially if these things are what he promised to the country as a politician.
    If the person in charge of defense procurements isn't doing his job, it's the defense minister's task to replace him, and if the defense minister can't cope with that - then it's Putin task to shake him down or get another person for the job.

    One way or the other - things got done and Putin wasn't made to look like a fool with empty, unfulfilled promises.

    So Putin's done his bit. He did what was neccessery one way or the other in order to match action to his words.

    Medvedev on the other hand is the person who is chiefly responsible, and expected due to his credentials to oversee the processes and people in charge of privatisation of the economy, legislative reforms, strengthening of the Duma/system of political parties, attracting more international investment, etc... it's all he ever talks about - yet where are the results?
    I see very little. I don't buy that Putin is shackling him down - this man holds the 2nd most powerful position in the country and should have free reign to do a huge number of changes. I see Shoigu has been keeping himself busy; less talk and more action. Medvedev however is just a waffler.
    avatar
    Firebird


    Posts : 1722
    Points : 1752
    Join date : 2011-10-14

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  Firebird Sun Sep 29, 2013 3:59 pm

    Anyone wonder if Medvedev is the descendant of Nicholas Romanov? When I heard it, I thought "what a load of utter conspiracy bullshit, its ridiculous". But, when you check out some of the photo comparisons, there's an eerie resemblence. And its not like Medvedev or Romanov could be considered "typical looking Russians".

    Its scary how powerful groups seem to reappear when you think they've been finished off. Post Communism, the man who would be king og Bulgaria was actually the prime minister. It sounds ridiculous, but it was reported in the mainstream press.

    Bulgaria's ex-King swears oath to republic
    By BBC Central Europe correspondent Nick Thorpe


    So... I wonder if the Medvedev rumour has some substance. He certainly says some pretty western leaning comments sometimes... cloaked up in western style pr speak.
    sepheronx
    sepheronx


    Posts : 8530
    Points : 8792
    Join date : 2009-08-06
    Age : 34
    Location : Canada

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  sepheronx Sun Sep 29, 2013 10:16 pm

    Firebird wrote:Its an interesting topic. Not least because I am involved in economics. Here are some of my opinions:-

    1)Inflation has been q high, but GDP growth has been sluggish. The big question however, is how that translated in the "real economy".
    Headline GDP values don't mean THAT much on their own. Because GDP can be an indicator of "internal transaction costs" more than real growth in prosperity. For instance, if we all start billing each other millions, rather than 1000s, GDP increases. However, real wealth does not. (Long time, this false growth may be identified in purchaing power comparisons, but even they have their flaws).

    2)I think Russia really needs to develop key industry sectors. IT (esp processors), maybe mobile telecoms etc, automotive, banking and finance, major "brands", and civil aviation. Ofcourse raw materials, petrochem etc are not enough. Nanotech and biotech would also be excellent areas.

    3)We have to be realistic and understand that it will take time to develop some areas. But some areas have been too slow. Not helped by corrupt morons like Yeltsin.

    4)Russia also has to answer questions about its place in the World. Will the Customs Union be a giant bloc? Should a partitioned Ukraine be part of it in the future? Should places like India, Vietnam, Venezuela be part of it? How close can Russia draw to China, the ASEAN bloc? Or should it be the EU?(which is struggling and has weaker growth prospects than Asia).

    5)The loss of oligarchical (and other high net worth) Russian capital is an issue. Does this reflect badly on Russia? Is it harming Russian growth? Abramovich alone has exported maybe 20bn USD of his own capital. Why didn't he use that money to develop places like Sochi, Vladivostok, Leningrand, Kaliningrad, Volgograd and places like that? Instead of sinking so much into London, the S of France etc.

    Maybe Medvedev's idea of Russian "offshore zones" should be explored? One for Asia and a warm climate one for Europe?

    6)Its good to see some Russians (who did NOT earn their wealth from corrupt means) doing well. But I know some people in Russia are talented and skilled, yet their income is significantly below contemporaries in Western countries. (Ofcourse the West has major problems of its own - esp among the young and over 50s).

    I think there is another concern in that Russia might develop more "class structure" - the plague that envelopes countries like Britain.
    Make no mistake, the original oligarchal class are nothing but a disease, multiplying and having chidlren that continue the abuse of the country, spreading the diseases that started under Yeltsin.
    Its this privilged, privately educated, multigenerational croney capitalism that harms economies as much as anything. The worst part is that its often hard to get people seeing and accepting the problem.


    7)WTO entry will be a pivotal issue. Perhaps there will be some efficiencies derived from the import of cheap, well produced goods.  There may also be benefits where Russia can export now, as the best producer. However, we should rememember there is rarely such a thing as a free lunch. Cheap imports can mean job losses and ultimately a weakening of a financial situation.

    8)The problem for the developed world in recent times has been not just loss of jobs to the 3rd World/Asia but also loss of PROSPERITY. Its hidden by the media often. Because the media is often nothing but the lackey of the cabal of globalists who manipulate global affairs as if the whole World is nothing but a game of Monopoly. (Because to them, IT IS!)

    I think we're certainly likely to see a "pullback" in the Russian economy. There's lots to be optimistic about. But WTO entry has to be very closely monitored. Many questions are yet to be answered...
    Good post mate!

    I just want to give my viewpoints:

    Problem with jumping to competition is that even if lets say Russia ended up being competitive and ends up being able to start their own line of end hardware like: Blenders, Microwaves, Fridges, Kitchen ware, Televisions, Microprocessors for all end users, etc; is that there is already a massive base existent. Either Samsung, Sony, Intel/AMD, Kitchenaid, LG, Toshiba, Texas Instruments, RCA, etc have much more money, much more pull in advertisements and alike, as well are willing to take "hits" (as per say) in order to get their processors into the market and en mass. Russian companies starting out, are starting out FAR too late, and it is pretty much more likely that they will not become massive in export, probably never. Only real chance for Russian end products to be big in the market, are markets that are small and specialized. MCST has a chance in microprocessors more specifically for HPC's, Work Stations and standard servers. Other electronic developers like Micron as an example will only be able to continue to build RISC processors based upon specialized base (Satellites, military computers, etc) so it will not end up as some sort of export master in microprocessor technologies, but in other functions like microcontrollers and as well, in smart card technology (which is becoming standard now). The sectors where Russia could very prosper well in the international market would be end products in agriculture like Harvesters as an example or food products (Coca Cola base companies). Heavy Machinery from Power Machines, and or construction equipment, transport vehicles like trains, airplanes, automobiles, etc.

    Lets be realistic, even if Russia started a bunch of companies, private, publicly owned or state owned, it wouldn't be competitive no matter how many decades. The problem is, the market is heavily flooded with products all made in China, by various companies, with some others in USA, Germany etc. Problem with Russia being in WTO, is that they will not allow further competition so Russian companies would either be bought out and destroyed pretty much whatever foundation of the company is (that is how they get rid of competition) or absorbed and no longer be Russian. Example is Avtovaz. It really isn't Russian anymore, but owned by a conglomerate between Nissan and Renault. In the end, as much as the company is now productive and competitive, it isn't Russian anymore, just in name. Good thing though, is that the company still manufactures in Russia, produces spare parts for it in Russia, and uses many of the raw materials needed to make it, in Russia. And, unfortunately for many here who believes that Russian companies could become something, it is the sad future of any nation trying to be competitive: They must rely on other companies to either open up production/manufacturing in Russia (or joint Venture organizations like Sollerrs and TagAZ as an examples).

    So even in the near future, majority of exports are going to be Oil/Gas/Timber/Natural resources, Food products, and to the lesser extent some heavy machinery (Automobiles, etc). I know, I am repeating myself, but this is the sad reality. Due to too much competition, we will not see average product with "Made in Russia" in near future. What we may very well see, is various countries that are in need of proper agriculture equipment, construction equipment, transport equipment, energy equipment (Turbines, generators, electrical grids, etc) with a made in Russia. We also will probably see in the next 10 - 20 years CNC equipment with tags made in Russia in various CIS countries and possibly Latin American countries too. The biggest of all of them may be pharmaceuticals, as they are always in demand and they are really pushing development in that sector. In IT sector, we will probably see more software development, including open source software, being made in Russia, since there is a huge push in Linux development in North America, and linux is a very popular OS in Russia, especially in development.

    The realistic options for Russia and surrounding countries is the concept of the Customs Union and pushing something like a Autopact of somesort in those countries. If they can increase the average Russian's standard of living, while increasing wages, means more buyers. Companies will be forced to be more competitive as when wages are up, and companies are not changing their capabilities, they will end up going broke. So they will seek advanced equipment, which could be bought from Russian companies. For export wise, with being in Customs Union, many countries who are in it, would be more than happy to purchase Russian made goods, especially heavy equipment, as those are usually tagged with high transportation costs and tariffs, so it would be cheaper to purchase directly from Russia.

    I know, I am repeating myself, but this is ultimately my viewpoint as this is the way that here in Canada we want to move. Unfortunately for us, our competition is just south of us and they will not purchase our goods. So instead, Canadian government relies on domestic consumption, and believe it or not, this is what helped us through economic troubles as Canadians found it was ultimately cheaper to purchase from Canadian companies and quality was pretty decent (some good some not so good) and due to government subsidies in some aspects, many companies were able to achieve quite a bit here in Canada from pure Canadian sales (Chapmans Ice Cream is a good example of a massive corporation in Canada), with subsidies, they were still able to pay workers pretty decently and come up with profits. Subsidies should not be too much as it could hurt the economy, but some works. When I mentioned Autopact, what that is, is an agreement that USA and Canada have, with other countries too. That a certain amount of cars sold in Canada or USA, if it reaches that certain amount per year, those cars have to be built in Canada using Canadian components or US components. That is also an agreement between us and USA, in which we sell certain model of cars to USA and they sell certain models to us, all from the same companies (Chevy, Ford, etc).

    This is the route Russia needs to take. Problem, a lot of people don't actually realize, is that export market is totally reliant on how well other countries do, how much they are willing to buy. If going gets tough, they will lower production and seek to move it to host country. Domestic consumption is the one that needs to seek most attention, as that will be the main drive to Russia's economic development, prosperity as well as a way to prevent major issues economically if in case the world economy collapses. Always keep trade up, as export is a good way to earn money fast, as well as help keep technologies up, especially if you cannot produce it yourself. So a healthy dose of export but with concentration on domestic development, is where it is at. India and China are growing real fast, because they rely on sales to other countries, but that makes them far too tied to the other countries, so if something happens, they are in some trouble. But due to high population, even with lower wages, they can still grow real fast with domestic consumption, which is what is happening more or less in China now then ever.

    tl;dr: Russia will have to rely on resources and small amounts of end products for export in future due to too much competition, and needs to build up domestic consumption to make country healthy, strong from outside influence (economically) and semi-independent.
    TR1
    TR1


    Posts : 5435
    Points : 5433
    Join date : 2011-12-06

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  TR1 Sun Sep 29, 2013 10:20 pm

    Austin wrote:
    TR1 wrote:It's not like Putin or Serdykov deserve any specific credit for any of that.

    If Putin does not deserve credit for making the economy then Yelstin should not be discredited for ruining it , guess it just happened ..... they did not mismanaged it much like Putin did not managed it well.
    Putin sure managed millions into his and his friends bank accounts Wink
    sepheronx
    sepheronx


    Posts : 8530
    Points : 8792
    Join date : 2009-08-06
    Age : 34
    Location : Canada

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  sepheronx Sun Sep 29, 2013 10:27 pm

    TR1 wrote:
    Austin wrote:
    TR1 wrote:It's not like Putin or Serdykov deserve any specific credit for any of that.

    If Putin does not deserve credit for making the economy then Yelstin should not be discredited for ruining it , guess it just happened ..... they did not mismanaged it much like Putin did not managed it well.
    Putin sure managed millions into his and his friends bank accounts Wink
    Putin owns stocks or is CEO (or whatever) in Gazprom. That wealth is his, not stolen. Although, I do not believe that a politician should be owning a business or is CEO of one or whatnot, when in power, due to conflicts of interest.

    At least the money he owns stays in Russia. Same cannot be said about the countless of other Oligarches, especially in 90's.
    flamming_python
    flamming_python


    Posts : 8988
    Points : 9050
    Join date : 2012-01-30

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  flamming_python Mon Sep 30, 2013 12:19 am

    Honestly it doesn't matter whether the money stays in Russia or not; if its in the pocket of some corrupt oligarch anyway.

    Putin's money has gone into some palace on the Black Sea coast or wherever it is. Real investment into Russia that is...

    Anyway; I don't even care - most important thing is that he's doing his job. If Putin can't guarantee results anymore, and if he can't guarantee the 6% economic growth that he promised as part of his 2012 election campaign; than he should move aside for someone that can.
    Russian Patriot
    Russian Patriot


    Posts : 1155
    Points : 2039
    Join date : 2009-07-21
    Age : 33
    Location : USA- although I am Russian

    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  Russian Patriot Mon Sep 30, 2013 1:21 am

    flamming_python wrote:Honestly it doesn't matter whether the money stays in Russia or not; if its in the pocket of some corrupt oligarch anyway.

    Putin's money has gone into some palace on the Black Sea coast or wherever it is. Real investment into Russia that is...

    Anyway; I don't even care - most important thing is that he's doing his job. If Putin can't guarantee results anymore, and if he can't guarantee the 6% economic growth that he promised as part of his 2012 election campaign; than he should move aside for someone that can.

    question is who ? I hope you don't say Navalny who is as corrupt as they come.


    Ivanox- Deputy Prime Minster - maybe but doubtful

    Rogozin- has chances , but honestly doubt they will pick him.


    Come to think of it I think Zybukov - has most chances.

    Sponsored content


    Russian Economy General News: #1 - Page 16 Empty Re: Russian Economy General News: #1

    Post  Sponsored content


      Current date/time is Wed Apr 24, 2024 11:19 pm