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


+39
Viktor
Austin
sepheronx
RTN
Flyingdutchman
As Sa'iqa
par far
arpakola
higurashihougi
NationalRus
NickM
Mindstorm
Mike E
Vann7
George1
MotherlandCalls
Regular
KomissarBojanchev
syxthtysyxthsyx
fragmachine
zino
medo
TheArmenian
collegeboy16
mutantsushi
Firebird
navyfield
dino00
TR1
Asf
AlfaT8
Morpheus Eberhardt
Cyberspec
zg18
GarryB
Zivo
Werewolf
macedonian
magnumcromagnon
43 posters

    Russian Economy General News: #2

    avatar
    Asf


    Posts : 472
    Points : 491
    Join date : 2014-03-27

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  Asf Mon Oct 13, 2014 2:09 pm

    Beriev-200 going to be built in USA

    Where are the sanctions, then they are needed the most? Let them buy russian-build ones
    Mike E
    Mike E


    Posts : 2640
    Points : 2676
    Join date : 2014-06-19
    Location : Bay Area, CA

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  Mike E Mon Oct 13, 2014 2:22 pm

    Asf wrote:
    Beriev-200 going to be built in USA

    Where are the sanctions, then they are needed the most? Let them buy russian-build ones
    I wish they'd build them in RU, but that isn't going to happen... Ironic that even through all the sanctions, the US needs Russian equipment one way or another!
    avatar
    Asf


    Posts : 472
    Points : 491
    Join date : 2014-03-27

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  Asf Mon Oct 13, 2014 2:33 pm

    I wish they'd build them in RU, but that isn't going to happen... Ironic that even through all the sanctions, the US needs Russian equipment one way or another!

    So why not to let them go f**k themselves instead of Be-200 or rocket engines until they stop sanctions? In the other way it's nice to have money for the planes, helicopters for Aughanistan, ect, but I'm really pissed of with such hypocrisy of one-way sanctions
    avatar
    par far


    Posts : 2764
    Points : 3009
    Join date : 2014-06-27

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  par far Tue Oct 14, 2014 6:30 am

    What does this mean?

    http://www.businessinsider.com/russia-saudi-arabia-and-oil-prices-2014-10


    What can Russia do here?

    kvs
    kvs


    Posts : 11737
    Points : 11888
    Join date : 2014-09-11
    Location : Canuckistan

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  kvs Tue Oct 14, 2014 7:24 am

    par far wrote:What does this mean?

    http://www.businessinsider.com/russia-saudi-arabia-and-oil-prices-2014-10


    What can Russia do here?



    There is no comparison with the situation during the 1980s when Saudi Arabia cranked up production and drove world prices
    for oil down for a sustained period of years. Today Saudi Arabia does not have anywhere near the spare capacity it had
    in the 1980s. All their new field development has produced heavy sour crude. Anyway, the Kingdom of Saudi Arabia can't
    even crank up its production by 1 million barrels per day.

    Since the 1980s, world demand for oil has gone up significantly but the supply has barely kept up. We have been on a
    plateau in production of crude and condensate globally since 2006. There has been a surge in US production from non-conventional
    sources in the last few years, but that is not enough to service the world. So crashing oil prices indicate economic recession
    and oil futures shenanigans.

    If the world oil price crashes too much then all of the non-conventional US production will become non-viable economically.
    So do not expect the oil price to crash and stay depressed for years. We are going to see a crash in production if the price
    gets too low.

    Russia has nothing to fear. The oil price will not fall to $50 per barrel. It might bounce into the $70 range for short periods
    of time, but then it will spike back to over $110. It's a supply constrained market. Global demand is not dominated by
    discretionary consumption and most of the demand growth has been from China, India and other developing nations. They
    are not going stop consuming especially if the price drops.
    kvs
    kvs


    Posts : 11737
    Points : 11888
    Join date : 2014-09-11
    Location : Canuckistan

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  kvs Tue Oct 14, 2014 8:18 am

    I forgot to add a vital detail. The ruble exchange rate is falling faster than the oil price so Russia is actually getting more
    national currency for its oil. Russia does not operate on dollars but on rubles. Dollars are for investment and the bottom
    line is not affected.

    It looks like these sanctions and oil price games are going to be an epic fail.
    GarryB
    GarryB


    Posts : 32144
    Points : 32672
    Join date : 2010-03-30
    Location : New Zealand

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  GarryB Tue Oct 14, 2014 9:42 am

    Seems to me that these sanctions are forcing Russia to invest in a range of technologies it has imported up until now... many areas that in fact would leave Russia vulnerable like in electronics and other important areas.

    With domestic substitution of key technologies other areas are funded and with the domestic demand these areas should expand and perhaps might reach a level where they are internationally competitive with their western alternatives.'

    Lets be realistic, that means nothing in the domestic market as few western companies would likely buy such components from Russia but the west constitutes only a small portion of the worlds population and people in the rest of the world might decide that with a devalued Rouble that Russian components will start looking much cheaper than western equivalents and there would be no chance of back doors imposed on the makers by the NSA or CIA or any other evil three letter US acronym organisation, which would be an added attraction.
    avatar
    Austin


    Posts : 7618
    Points : 8015
    Join date : 2010-05-08
    Location : India

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  Austin Tue Oct 14, 2014 12:43 pm

    The article has good read on what low oil price means

    As the price of oil drops, so do hopes for Russia's economic future


    Siluanov predicted that Russia’s budget would lack 500 billon rubles (nearly $12.5 billion) if oil prices drop to $87 per barrel and the dollar-ruble exchange rate trades as high as 40 in 2015. In such a scenario, Russia would have to use money from its Reserve Fund, which comprises about $90 billion, he announced at the Oct. 13 session of the State Duma, the lower chamber of the Russian parliament.

    Today Ural Blend trade at $87 and Rouble is at 40.32
    sepheronx
    sepheronx


    Posts : 7085
    Points : 7351
    Join date : 2009-08-06
    Age : 32
    Location : Canada

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  sepheronx Tue Oct 14, 2014 1:15 pm

    If Russia comes out with a GDP growth (even if very small like 0.1%) I am going to laugh.

    That said, the article isn't bad, title is just outright stupid.  All this will do is force Russia to change economic policies and look at other methods to the economy rather than just oil and gas.  They may look more at their own population to prop themselves up by offering cheaper gas on domestic market. What is funny, the doom and gloom seems to be always pointed at Russia. But even with Sanctions up the ying yang, Iran survived. They have their issues, but a lot of it is due to poor management and lack of freedom in economy. Outside of that, they are still producing.

    The question is, how will this effect countries like US and Canada?  Canada's main export is pretty much oil and gas, besides US made automobiles.  US Fracking will be in trouble and Saudi Arabia relies on oil and gas sales, especially in keeping their people together.

    Russia on the other hand, has their industrial strength to fall back on.  Maybe not the biggest money maker, but at least they do produce cars, tools, heavy industrial equipment, agriculture etc etc etc.  They will just have to find a market for it and I guess they knew something like this would eventually end up happening, since they are looking towards latin america, Africa and Caucuses to sell their products to.

    As for having to use reserve funds, they can effectively use their foreign reserve as well, which still stands at over $450B even though CB used a lot of it in order to pay off debt.
    avatar
    Austin


    Posts : 7618
    Points : 8015
    Join date : 2010-05-08
    Location : India

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  Austin Tue Oct 14, 2014 2:54 pm

    sepheronx wrote:If Russia comes out with a GDP growth (even if very small like 0.1%) I am going to laugh.

    That said, the article isn't bad, title is just outright stupid.  All this will do is force Russia to change economic policies and look at other methods to the economy rather than just oil and gas.  They may look more at their own population to prop themselves up by offering cheaper gas on domestic market.  What is funny, the doom and gloom seems to be always pointed at Russia.  But even with Sanctions up the ying yang, Iran survived.  They have their issues, but a lot of it is due to poor management and lack of freedom in economy.  Outside of that, they are still producing.

    The question is, how will this effect countries like US and Canada?  Canada's main export is pretty much oil and gas, besides US made automobiles.  US Fracking will be in trouble and Saudi Arabia relies on oil and gas sales, especially in keeping their people together.

    Russia on the other hand, has their industrial strength to fall back on.  Maybe not the biggest money maker, but at least they do produce cars, tools, heavy industrial equipment, agriculture etc etc etc.  They will just have to find a market for it and I guess they knew something like this would eventually end up happening, since they are looking towards latin america, Africa and Caucuses to sell their products to.

    As for having to use reserve funds, they can effectively use their foreign reserve as well, which still stands at over $450B even though CB used a lot of it in order to pay off debt.


    You know I have heard the bolded part before from Russian Government in the many years I have been following them.

    When Oil Prices Fall they say we need to get from Oil Dependencies blah blah blah ........When Oil Prices Rise its all gone and forgotten.

    The more they change the more things remain the same Mad

    I would only believe if they do something concrete else its all BS Talk for Talk Stuff
    avatar
    Asf


    Posts : 472
    Points : 491
    Join date : 2014-03-27

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  Asf Tue Oct 14, 2014 3:46 pm

    I would only believe if they do something concrete

    What should they do?
    avatar
    Austin


    Posts : 7618
    Points : 8015
    Join date : 2010-05-08
    Location : India

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  Austin Tue Oct 14, 2014 3:52 pm

    Asf wrote:
    I would only believe if they do something concrete

    What should they do?

    Reduce Budget Revenue from Minerals/Oil etc YOY.

    Do structural reforms in their economy

    http://www.cnbc.com/id/102052304#.


    Siluanov said: "There is no need to re-invent the wheel, other countries have tried spending and loose monetary policy and it only offered short term respite.




    "We need structural reforms, those who have implemented structural reforms have been the winners."
    GarryB
    GarryB


    Posts : 32144
    Points : 32672
    Join date : 2010-03-30
    Location : New Zealand

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  GarryB Tue Oct 14, 2014 5:05 pm

    If you have something that sells well on the international market you would be a fool to stop selling just because you don't have an endless supply.

    There is a saying... make hay while the sun shines...

    When bad things happen then you might need to change, but until then make what you can when you can.
    sepheronx
    sepheronx


    Posts : 7085
    Points : 7351
    Join date : 2009-08-06
    Age : 32
    Location : Canada

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  sepheronx Tue Oct 14, 2014 8:18 pm

    Austin wrote:
    sepheronx wrote:If Russia comes out with a GDP growth (even if very small like 0.1%) I am going to laugh.

    That said, the article isn't bad, title is just outright stupid.  All this will do is force Russia to change economic policies and look at other methods to the economy rather than just oil and gas.  They may look more at their own population to prop themselves up by offering cheaper gas on domestic market.  What is funny, the doom and gloom seems to be always pointed at Russia.  But even with Sanctions up the ying yang, Iran survived.  They have their issues, but a lot of it is due to poor management and lack of freedom in economy.  Outside of that, they are still producing.

    The question is, how will this effect countries like US and Canada?  Canada's main export is pretty much oil and gas, besides US made automobiles.  US Fracking will be in trouble and Saudi Arabia relies on oil and gas sales, especially in keeping their people together.

    Russia on the other hand, has their industrial strength to fall back on.  Maybe not the biggest money maker, but at least they do produce cars, tools, heavy industrial equipment, agriculture etc etc etc.  They will just have to find a market for it and I guess they knew something like this would eventually end up happening, since they are looking towards latin america, Africa and Caucuses to sell their products to.

    As for having to use reserve funds, they can effectively use their foreign reserve as well, which still stands at over $450B even though CB used a lot of it in order to pay off debt.


    You know I have heard the bolded part before from Russian Government in the many years I have been following them.

    When Oil Prices Fall they say we need to get from Oil Dependencies blah blah blah ........When Oil Prices Rise its all gone and forgotten.

    The more they change the more things remain the same Mad

    I would only believe if they do something concrete else its all BS Talk for Talk Stuff

    I too have been following it and I have seen changes. Tooling industry, automotive, construction, agriculture, etc.  Better to spend excess money while they had it. But the thing is, they have the industries already making end goods. If you dont believe me, you should should check out the thread that I have noy updated in quite some time and sdelanounas.  These industries are not pushing hard for foreign sales of their products but that may change.

    Reason why you say you have not saw any changes is because you refuse to acknowledge the changes that were made.

    Back in soviet era, Canada was a major exporter of agriculture and construction equipment to USSR. Now they are major producers of said tech today and we barely export any of that equipment to them anymore (if at all). This is just one example.

    Structual reforms only work if there are any reforms to be made or there is something less vague. Saying structual reforms is same this as "developing industry" and "diversify industry", all vague terms. Problem is, Russia manufactures goods from basic household to heavy industrial equipment. But you dont see many of these products outside the country. Why? Lack of prospect for exports. They already have a diversified economy. Just it doesnt make them the money oil and gas did.
    Viktor
    Viktor


    Posts : 5814
    Points : 6449
    Join date : 2009-08-26
    Age : 41
    Location : Croatia

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  Viktor Wed Oct 15, 2014 12:35 am

    Nice thumbsup

    Russia to build data centers for China, investment will be about $ 5 billion
    magnumcromagnon
    magnumcromagnon


    Posts : 7336
    Points : 7485
    Join date : 2013-12-05
    Location : Pindos ave., Pindosville, Pindosylvania, Pindostan

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  magnumcromagnon Wed Oct 15, 2014 1:13 am

    Defying the dollar Russia & China agree currency swap worth over $20bn

    Russian Economy General News: #2 - Page 30 Russia-china-currency-swap-.si

    The central banks of China and Russia have signed a 3-year ruble-yuan currency swap deal up to $25 billion, in order to boost trade using national currencies and lessen dependence on the dollar and euro.

    On Monday, China’s Central Bank announced the 150 billion yuan (815 billion ruble) currency swap between the Russian ruble and Chinese yuan. In terms of the Chinese currency that is $24.5 billion, and in Russian rubles, $20.1 billion.

    "We need to expand the practice of using national currencies in trade. Currently they only account for 7 percent of turnover,” Prime Minister Dmitry Medvedev said at the 18th annual Russian-Chinese Commission, also attended by Chinese Premier Li Keqiang.

    The deal is valid for 3 years, and can be extended if both Russia and China agree. The draft currency swap was settled in August, but details on the size of the deal were sketchy.

    Using more local currencies will speed up trade between the two countries who are aiming to reach $100 billion by 2015. Trade between Russia and China is already nearly $90 billion and is scheduled to hit $200 billion in the next six years.

    Cooperation between Russian and Chinese banks is also on the rise, and China’s Import Export Bank, which is 100% state owned, has pledged to help Russian banks now cut off from Western capital markets, due to the latest round of sanctions.

    The Export-Import Bank (Exim) has agreed to establish a credit line equivalent to $2 billion for Russian state bank VTB, and has also signed agreements with VEB (Vnesheconombank), and the Russian Agricultural Bank.

    The credit lines can be used to finance imports from China, from agriculture to high tech equipment.

    Medvedev and Li signed over 40 other agreements at the meeting, including outlining plans to add another pipeline from Russia to China. Li is in Moscow for a three-day visit.

    Defying the dollar Russia & China agree currency swap worth over $20bn
    magnumcromagnon
    magnumcromagnon


    Posts : 7336
    Points : 7485
    Join date : 2013-12-05
    Location : Pindos ave., Pindosville, Pindosylvania, Pindostan

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  magnumcromagnon Wed Oct 15, 2014 1:31 am

    Rosteh signed an agreement with the China Aerospace Corporation
    The document is aimed at the development of joint ventures and developments in the field of electronics

    Russian Economy General News: #2 - Page 30 Shutterstock_6932581_588

    Rosteh, China Corporation Aerospace Science and Technology (CASC) signed a strategic cooperation agreement to promote trade, investment and cooperation in the field of high technologies.


    The parties will be engaged in joint development and production of electronic components, will cooperate in the field of information technology, communications systems and automation, new materials.

    The agreement was signed by CEO Rosteha Chemezov and Chairman of the Board of Directors of CASC Lei Fanpey. The signing ceremony took place during a meeting of heads of governments of Russia and China - Dmitry Medvedev and Li Keqiang.

    The agreement allows you to start the preparation and implementation of joint projects in Russia, China and third countries. Rosteha cooperation with CASC will focus on the civilian side.

    "Joining forces, competences, scientific potential and production potential of the Russian and Chinese companies provides quality advantages that allow you to implement a successful global joint projects, - said director general Rosteha Chemezov . - Production of competitive high-tech products with Chinese partners will allow enterprises to increase Rosteha its share of the world market, where they are already present, and come out on the other. Agreement with CASC opens new areas of economic cooperation and allows it in new forms. "

    Among the possible areas of cooperation - joint development and production of electronic components, information technology, communications and automation (with "Roselektronika" and the Russian Corporation of communication - RTEC), new materials (with the participation of the holding company "PT Himkompozit" ).

    "Rosteh has long established itself as a reliable partner of Chinese companies - emphasizes chairman Lei Fanpey CASC. - We are interested in developing cooperation with the Russian corporation in a number of areas. This is beneficial to both parties, since the competence and technology of Russian and Chinese companies can profitably complement each other. The potential for cooperation between Russia and China in the field of industry is huge, this potential can give an additional impetus to a number of areas, including the production of modern electronics . "

    CASC Corporation specializes in designing and manufacturing different kinds of spacecraft, launch vehicles (including manned), strategic and tactical missiles of various types of ground-based equipment monitoring and control, and telecommunications equipment for military and civil purposes. In addition, the Corporation is authorized state authority on international space cooperation. The Corporation is also the largest shareholder on behalf of the state in the capital of China's telecommunications sector leader - Corporation ZTE (or " Chung Hsing " ).

    Specialized foreign trade company CASC serves Chinese Industrial Corporation "Great Wall» (China Great Wall Industry Corporation (CGWIC)), which is the only specialized organization for the provision of services and supply of commercial launches of satellites in orbit, as well as relevant technical services.

    Rosteh signed an agreement with the China Aerospace Corporation

    avatar
    Austin


    Posts : 7618
    Points : 8015
    Join date : 2010-05-08
    Location : India

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  Austin Wed Oct 15, 2014 2:22 am

    Ulyukayev: from international rating agencies there is no reason to lower the sovereign rating of the Russian Federation


    http://itar-tass.com/ekonomika/1507338




    MOSCOW, October 14. / TASS /. Economic Development Minister Alexei Ulyukayev believes that the international rating agencies, there is no reason to lower the sovereign rating of Russia, though "talk and rumors" about this walk.


    "Now really have expectations, there is talk, there are rumors that the possible actions of international rating agencies to lower the sovereign rating of the Russian Federation", - said the minister told reporters.


    Gref said in the case of such acts they would "indicate either incompetence or an engagement." The Minister added that there are no objective reasons for the downgrade is not.


    "What is rating the rating agencies? Rating long-term solvency, credit worthiness. This, simply put, is the belief that we will be able to repay our foreign debt," - said Ulyukayev, adding that today's foreign debt amounts to less than 3% GDP, and the entire national debt - 11% of GDP. "That is, if you want such a debt can be repaid in one year," - said the Minister. According to him, the risks of non-repayment of debt are not available. "From whatever side you look, macroeconomic and financial structure is very stable and the risk that this meager foreign debt somehow miraculously not be extinguished, no," - said the head of the Ministry of Economic Development.


    Ulyukayev also expressed the opinion that in the case of reducing Russia's sovereign rating will create a tense situation with the debt of the corporate sector. "In normal cases, it is primarily reflected in the cost of sovereign debt, borrowing. But this is not the case, because there is practically no foreign debt. But the problem is that almost automatic in these cases vary corporate ratings. They are more or some extent tied to the sovereign "- continued the Minister. 


    At the same time, at a mass revision of corporate ratings, according to the head of the Ministry of Economic, worsen conditions of refinancing companies will also be difficult to access to the global capital markets, and in some cases will work covenants that are built into the agreement on borrowing.
    sepheronx
    sepheronx


    Posts : 7085
    Points : 7351
    Join date : 2009-08-06
    Age : 32
    Location : Canada

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  sepheronx Wed Oct 15, 2014 2:52 am

    As stocks have dripped in Canada (crashing by 10%), brent crashed to $81. Guess the test begins now! They say that Fracking in US is unatainable (well unprofitable) at anything less than $85. So I suppose we are into a possible world shock.
    kvs
    kvs


    Posts : 11737
    Points : 11888
    Join date : 2014-09-11
    Location : Canuckistan

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  kvs Wed Oct 15, 2014 8:11 am

    sepheronx wrote:
    I too have been following it and I have seen changes. Tooling industry, automotive, construction, agriculture, etc.  Better to spend excess money while they had it. But the thing is, they have the industries already making end goods. If you dont believe me, you should should check out the thread that I have noy updated in quite some time and sdelanounas.  These industries are not pushing hard for foreign sales of their products but that may change.

    Reason why you say you have not saw any changes is because you refuse to acknowledge the changes that were made.

    Back in soviet era, Canada was a major exporter of agriculture and construction equipment to USSR. Now they are major producers of said tech today and we barely export any of that equipment to them anymore (if at all). This is just one example.

    Structual reforms only work if there are any reforms to be made or there is something less vague. Saying structual reforms is same this as "developing industry" and "diversify industry", all vague terms. Problem is, Russia manufactures goods from basic household to heavy industrial equipment. But you dont see many of these products outside the country. Why? Lack of prospect for exports. They already have a diversified economy. Just it doesnt make them the money oil and gas did.

    People should stop parroting the drivel that Russia needs to stop selling oil and gas and "diversify" its economy. This is
    a trope created by western media propaganda. There is something called comparative advantage and it is a recognized
    aspect of trade from the beginning of the study of economics. Russia has a huge comparative advantage in oil and gas
    and exports them to maximize its export revenue. Forgoing this money for the sake propaganda straw man "purity"
    is just insane. The west will never ban Russian oil and gas exports and the current price drop is obviously a
    transient. Yet we have articles already spewing about how Russia's "oil dependent future" is doomed. What drivel.

    Russia is actually a very diversified economy. Compare it to Canada and Australia, two 1st world resource exporters.
    I don't hear anyone trying to stop Canada from exporting oil and timber. Or Australia from exporting coal and Uranium.
    The problem in Russia is the legacy of communism and the transition to a gangster economy during the 1990s. Ukraine
    never got out of that hole and is now basically a failed state. Russia managed to get out of the hole but that cultural
    damage is long-lasting. It is hard for small businesses to form and thrive in Russia. Small business is a major employer
    in Canada. All the talk about structural reform makes it sound like the problems facing Russia can somehow be removed
    with some laissez-faire neo-liberal monetarist voodoo economics. The clowns who spout this propaganda also systematically
    ignore real reforms over the last 15 years.

    http://online.wsj.com/articles/SB1027626299707451040

    http://rbth.com/business/2013/10/24/russia_will_not_abandon_market_reforms_31127.html

    http://russiaprofile.org/business/a1272390310.html
    kvs
    kvs


    Posts : 11737
    Points : 11888
    Join date : 2014-09-11
    Location : Canuckistan

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  kvs Wed Oct 15, 2014 9:24 am

    http://www.bne.eu/content/story/fears-russian-credit-crunch-greatly-exaggerated-say-analysts

    On paper, Russian companies have huge foreign debts, and no way of refinancing them because sanctions effectively close Western capital markets to Russian borrowers. But with much of Russian corporate foreign debt in fact hidden equity investments from offshore zones, the figures seem much worse than they are.

    International headlines are predicting a looming liquidity meltdown in Russia. Russian companies must pay down $134bn in external debt through the end of 2015, with a major spike of $32bn coming up in December 2014 alone, according to Russia’s central bank.

    But an accounting trick widely used in Russia may be misleading pundits on corporate liquidity in Russia, say experts: for many larger Russian firms, foreign debt is nothing other than equity injections from shareholders incorporated in offshore zones such as Cyprus or the British Virgin Islands, with interest paid on the debt a tax-minimising strategy to take profits.

    Real foreign debt may be almost half of the figure on paper. “The figure [$166 billion foreign corporate debt through 2015] is quite overestimated as it includes inter-company transactions. I think the realistic estimate amounts to not less than $90bn, which are to be raised from domestic sources," Russia's economy minister Aleksei Ulyukaev said in a boisterous speech to the Duma on October 8.

    According to Russia's central bank, of $220bn in foreign loans taken out by Russian companies in Russia in 2013, close to half were raised in offshore jurisdictions, such as Cyprus, Ireland, Luxembourg and the British Virgin Islands, rather than from international banking centres. Counting through all the eurobonds, syndicated loans and bilateral loan agreements, gives a figure of $70bn-90bn in debt to be paid down through 2015, similar to the figure quoted by Ulyukaev, say experts.

    ...

    Moreover, much of Russian companies' genuine foreign debt - some analysts says around half - can be attributed to Russia's state-owned energy giants Rosneft and Gazprom. Rosneft alone owes around $32bn to be paid by the end of 2014, debts incurred to pay for the acquisition of oil company TNK-BP in March 2013. But both Rosneft and Gazprom are receiving huge advance payments from China for contracted oil and gas supplies.

    Russia's GDP growth over the last 15 years has been real and not driven by borrowing like in most of the OECD.
    Russia's total debt load (not just state debt) is amongst the smallest the in the world and all attempts to try to
    fluff it up to be some epic problem are pathetic propaganda.

    Talking about borrowing, why is borrowing from abroad not a negative in GDP accounting? In the current definition
    of the GDP it is treated as a capital inflow and thus a positive. This is clearly nonsense since it needs to be repaid
    and with non-negligible interest.
    Hannibal Barca
    Hannibal Barca


    Posts : 1379
    Points : 1389
    Join date : 2013-12-13

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  Hannibal Barca Wed Oct 15, 2014 3:10 pm

    2 years ago nobody here had an idea about economy. Now most posts are very educated so you see the progress is very real.
    sepheronx
    sepheronx


    Posts : 7085
    Points : 7351
    Join date : 2009-08-06
    Age : 32
    Location : Canada

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  sepheronx Wed Oct 15, 2014 8:12 pm

    Hannibal Barca wrote:2 years ago nobody here had an idea about economy. Now most posts are very educated so you see the progress is very real.

    I would say the compliment goes to you, KVS, ZG and the sites sdelanounas.ru and marchmontnews. If it wasnt for those, I would be believing whatever the former economic minister would be saying. Even though he was let go for a reason.
    avatar
    Austin


    Posts : 7618
    Points : 8015
    Join date : 2010-05-08
    Location : India

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  Austin Wed Oct 15, 2014 8:24 pm

    It appears for every $1 drop in Oil Prices Russian budget losses $2 Billion , The inverse is also true then

    http://rt.com/business/196092-oil-glut-5-year-low/


    For every dollar oil prices fall, the Russian budget loses an equivalent of $2 billion, Maksim Oreshkin, the head of the
    Russian Finance Ministry's strategic planning department, told Bloomberg.


    Russian budget base Oil price is $96 for Ural , If Ural reaches says $80 and stays there ( it as nearly $83 now for ural ) then Russian budget would need $32 billion from Reserve fund ( Reserve Fund is today at $90 Billion )

    I suspect beyond the Saudi-Kuwait rivalary as we are told in media there is some secret understand by US-Saudi to reduce Oil Price to hurt Russian Economy

    One bad things about falling Oil Price beyond budget is Rouble keeps falling which means CB has to step in to sell $$$ to support falling Rouble.

    Hopefully end of this year or beginning of next Ural reaches $100
    sepheronx
    sepheronx


    Posts : 7085
    Points : 7351
    Join date : 2009-08-06
    Age : 32
    Location : Canada

    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  sepheronx Wed Oct 15, 2014 8:48 pm

    CB has stopped putting money into Ruble. Now its free floating (well, almost). They recently dumpped a lot but it proved pointless. Lower Ruble really doesnt do much unless you can think of a reason. Cause if they are mostly selling oil and gas as you say Austin, then technically, it adjusts the price of the goods and they are going to get the same amount in the end anyway. Fall in Ruble has allowed various companies to profit greatly.

    http://m.rbth.com/business/2014/10/08/russia_comes_to_terms_with_sanctions_40451.html

    I wouldnt put too much faith into RT and its articles but if true, then good. But according to this:

    http://en.itar-tass.com/economy/754499

    Then it doesnt seem so bad.

    But lets put something into perspective - falling oil prices means that in order to gain same amount of $$$, then Russia needs to export more. Contracts already signed means that even though it is for lets say over $270B like Rosneft contract with China, it means that they have to export more. So the calculation for what they claim is being lost is money not generated in the first place, or also known as calculated loss. A potential loss. This is the reason why Russia is pushing these contracts as it guarentees them a base amount even if they have to increase supply.

    If they account these prices before sale as their loss/gain in finances, then they are doing it wrong.

    Sponsored content


    Russian Economy General News: #2 - Page 30 Empty Re: Russian Economy General News: #2

    Post  Sponsored content


      Current date/time is Mon Jan 17, 2022 1:54 pm