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    Russian Economy General News: #6

    sepheronx
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    Post  sepheronx Sun May 08, 2016 6:04 am

    Gas will become very important for Russia and for nearby countries. Coal is being phased out unless you are stupid like Germany, and in total, natural gas is ideal to replace it as it is significantly cheap and clean, with a massive demand climbing for natural gas. So eventually, Natural gas will be a key to replacing the coal plants and China and Russia's demand for it will increase. When Russia's demand for electricity increases, they will turn to Natural gas and Nuclear. They can more than likely turn that $29B from lost sales to EU to $29B increased sales domestically and to other customers who are in a demand for it as well. LNG will be Russia's future, and cheaper transportation costs. All because these oil pipelines require far too much political headaches for Russia and so they will just sell it on the spot market instead via LNG. Much less headaches and higher value as well. They will keep pipeline in lets say Belarus in order to still have political influence.
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    Post  Austin Sun May 08, 2016 6:58 am

    http://tass.ru/ekonomika/3264589

    Macroeconomic outlook: Russian sovereign funds in a conservative scenario, exhausted by the end of 2019

    MOSCOW, May 6. / TASS /. National Welfare Fund (NWF) and the Reserve Fund will be fully exhausted by the end of 2019 the implementation of a conservative forecast. At the same time the Ministry itself deems it necessary to maintain the amount of funds more than 2 trillion rubles by the end of 2019. This was reported in the socio-economic outlook of the Russian Federation

    "In the conservative variant use of the National Welfare Fund to the federal budget balancing will begin in 2017. Development of Russia proceeds from the necessity to maintain the amount of funds more than 2 trillion rubles by the end of 2019. However, according to the conservative variant of budgetary funds of the resources by the end of 2019 the year will be completely exhausted, "- the document says.

    Also it points out that in all cases there is the forecast of the federal budget deficit throughout the forecast period, which will require the mobilization of all available resources of the Russian Federation budget.

    This forecast provides for financing the federal budget deficit by 2019 through the use of Sovereign Wealth Funds.

    The reduction of inefficient budget spending


    Ministry of Economic Development proposes to adhere to the provisions on the reduction of federal spending in real terms by at least 5% per year, not only in 2017 but in 2018-2019 due to the reduction of inefficient spending.

    The document says that the Russian budgetary system in the medium term are financially balanced for all variants of macroeconomic forecast (base, a target, a conservative), the costs in full provided income and sources of financing the deficit.

    All variants of the forecast suggests a significant reduction in federal revenues relative to projections, recorded in the preparation of the law on the federal budget for 2016. "The decision of the current situation will not be passed on to increase the tax burden - accounted for a moratorium on the increase of tax and customs duties in excess of the existing legislation", - stated in the macroeconomic outlook.

    For all variants of the forecast there is the federal budget deficit throughout the forecast period, which will require the mobilization of all available resources budgets of the budgetary system of the Russian Federation, the document says.



    Accounting for the preservation of the anti-Russian sanctions

    Macroeconomic forecast of the Russian government in the years 2017-2019 is based on the preservation of the sanctions against the Russian Federation from the US and the EU. "The forecast is considering the development of the Russian economy in conditions of the continuing geopolitical instability, application to Russia during the forecast period of the sanctions by the EU and the US that supports strict restrictions on access of Russian companies to the international capital market and economic retaliation" - the document says.




    Last edited by Austin on Sun May 08, 2016 9:47 am; edited 1 time in total
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    Post  Austin Sun May 08, 2016 8:48 am

    Since National Welfare fund is Pension Money , How will they pay the pension when both the funds are depleted by 2019 as these conservative estimate predicts ?

    They will have to borrow from market isnt it if they budget is still in negitive
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    Post  GunshipDemocracy Sun May 08, 2016 12:16 pm

    Putin's Crude Dreams: Russia Ready to Start Pricing its Own Oil

    http://sputniknews.com/business/20160507/1039236093/russian-oil-trading.html
    The plan includes the creation of an independent oil trading platform, Russia’s own crude benchmark as well as trading oil in rubles.
    The St. Petersburg International Mercantile Exchange (Spimex), the country’s largest commodity exchange, is courting international oil traders to join its emerging futures market. Spimex’s chairman is Igor Sechin, who is also CEO of the Russian oil giant Rosneft.

    The goal is to increase revenues from Urals crude by disconnecting the pricing mechanism from the Brent benchmark. Another goal is to stop quoting petroleum in US dollars.

    "The goal is to create a system where Russian oil is priced and traded in a fair and straightforward way," Spimex president Alexei Rybnikov said in an interview with Bloomberg.

    Better late then never now gs in ruble splease Smile





    Chinese company is going to acquire 100 robots form Russian manufacturer

    http://tass.ru/ekonomika/2730093

    Triffle but nice Smile








    sepheronx wrote:Interesting news:
    Haute Couture: Russian Kalashnikov Concern to Produce Clothing, Accessories

    This is how Harley Davidson gained a massive boost in profits.  Actually, its branding alone is the main staple of the companies finances are from over its sale of motor bikes.  So in this case, Kalashnikov brand is so well known and popular, it could gain massive international success with a clothing line and other accessories.


    I love to wear it with clear name on it in front of Polish presidential palace Very Happy


    Last edited by GunshipDemocracy on Sun May 08, 2016 12:54 pm; edited 4 times in total
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    Russian Economy General News: #6 - Page 26 Empty Re: Russian Economy General News: #6

    Post  GunshipDemocracy Sun May 08, 2016 12:25 pm

    Austin wrote:Since National Welfare fund is Pension Money , How will they pay the pension when both the funds are depleted by 2019 as these conservative estimate predicts ?

    They will have to borrow from market isnt it if they budget is still in negitive

    Alarming indeed but because the way it is presented is pure libearsts´ way: first drow economy into stagflation (interest rate) and forcing higher retirement age (like in all non communist countries slavery is back).

    Those dudes very deeply hide their knowledge about economy or have none. What is current budget deficit? 8% GDP? what is % of Yuan denominated t-bonds? or evn euro ones (if euro still exist till that time)

    Every drop in %rate by CBR pumps billions or tryllions Rubles into economy...many investments were made you need to wait 5-10 years till this starts to profit.

    Firs and most important let economy grow but i guess this is after next presidential election if Putin is strong enough to suppress V column in govt. We havee to watch and see

    I presume
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    Post  sepheronx Sun May 08, 2016 2:08 pm

    No more than 3 years ago all economists and specialists were predicting massive growth everywhere. As I said before, wait till the date comes near before counting your eggs. Cause nothing is constant. By 2018, defense spending will drastically drop due to near completion of SAP2020 and next SAP (2028 is predicted) will be much less.

    Defense companies will be also adding in civil goods production line.

    http://vpk.name/news/154833_pod_ugrozoi_skovorodki.html
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    Post  kvs Sun May 08, 2016 4:40 pm

    Austin wrote:http://tass.ru/ekonomika/3264589

    Macroeconomic outlook: Russian sovereign funds in a conservative scenario, exhausted by the end of 2019

    MOSCOW, May 6. / TASS /. National Welfare Fund (NWF) and the Reserve Fund will be fully exhausted by the end of 2019 the implementation of a conservative forecast. At the same time the Ministry itself deems it necessary to maintain the amount of funds more than 2 trillion rubles by the end of 2019. This was reported in the socio-economic outlook of the Russian Federation

    "In the conservative variant use of the National Welfare Fund to the federal budget balancing will begin in 2017. Development of Russia proceeds from the necessity to maintain the amount of funds more than 2 trillion rubles by the end of 2019. However, according to the conservative variant of budgetary funds of the resources by the end of 2019 the year will be completely exhausted, "- the document says.

    Also it points out that in all cases there is the forecast of the federal budget deficit throughout the forecast period, which will require the mobilization of all available resources of the Russian Federation budget.

    This forecast provides for financing the federal budget deficit by 2019 through the use of Sovereign Wealth Funds.

    The reduction of inefficient budget spending


    Ministry of Economic Development proposes to adhere to the provisions on the reduction of federal spending in real terms by at least 5% per year, not only in 2017 but in 2018-2019 due to the reduction of inefficient spending.

    The document says that the Russian budgetary system in the medium term are financially balanced for all variants of macroeconomic forecast (base, a target, a conservative), the costs in full provided income and sources of financing the deficit.

    All variants of the forecast suggests a significant reduction in federal revenues relative to projections, recorded in the preparation of the law on the federal budget for 2016. "The decision of the current situation will not be passed on to increase the tax burden - accounted for a moratorium on the increase of tax and customs duties in excess of the existing legislation", - stated in the macroeconomic outlook.

    For all variants of the forecast there is the federal budget deficit throughout the forecast period, which will require the mobilization of all available resources budgets of the budgetary system of the Russian Federation, the document says.



    Accounting for the preservation of the anti-Russian sanctions

    Macroeconomic forecast of the Russian government in the years 2017-2019 is based on the preservation of the sanctions against the Russian Federation from the US and the EU. "The forecast is considering the development of the Russian economy in conditions of the continuing geopolitical instability, application to Russia during the forecast period of the sanctions by the EU and the US that supports strict restrictions on access of Russian companies to the international capital market and economic retaliation" - the document says.



    Oh here we go again with this BS. The Reserve Fund is not the sole source of government financing in Russia. People need to
    understand that the government has tax, customs, rent, and other revenues vastly larger than any amount it taps from the
    Fund under the current conditions. As I posted before, Canada, USA, most of the EU do not have reserve funds but they do
    have massive debts and annual deficits. Russia is using its Reserve Fund for the purpose it was intended and reducing
    the deficit. If it depletes it then so be it.

    The implicit assumption in the above piece is that the Russian budget will be in deficit from now until forever. Whoever writes this
    sh*t can go eat sh*t.
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    Post  Austin Mon May 09, 2016 10:57 am

    kvs wrote:Oh here we go again with this BS.  The Reserve Fund is not the sole source of government financing in Russia.   People need to
    understand that the government has tax, customs, rent, and other revenues vastly larger than any amount it taps from the
    Fund under the current conditions.   As I posted before, Canada, USA, most of the EU do not have reserve funds but they do
    have massive debts and annual deficits.   Russia is using its Reserve Fund for the purpose it was intended and reducing
    the deficit.   If it depletes it then so be it.  

    The implicit assumption in the above piece is that the Russian budget will be in deficit from now until forever.   Whoever writes this
    sh*t can go eat sh*t.  

    The piece of Shit is written by Russian Economic Development Ministry , So its Official Shit of how they see it Laughing

    Now they believe that if the current spending of 2 Trillion Rouble from Reserve/NWF continues then money from both fund will get exhaused by end of 2019 , thats like $8 trillion rouble for next 4 year.

    That is also assuming that fact that things are as bad when it comes to budget deficit as it is today and Oil price will be around $40 till 2019 and budget spending remains the same or say 5 % reduction as proposed for current year.

    Now as you say there are many ways to skin the cat , raise tax increase revenue , cut budget spending so that you dont have to borrow that much from reserve fund and economic situation remains gloomy when it comes to Oil price and Sanction remains as it it today.

    Having said that any thing of this can change and the projection will not be the same.

    They dont want to burrow from market and raise Public debt above 18 % that remains their ceiling , today its around 13 % so they do plan to burrow but not much.


    I dont think Russian Finance Ministry will look to Credit expansion as means to cover their budget which is to increase Public Debt , it did not helped in US or EU beyond bloating the stock market with bubbles or just create artificial demand.

    Likely they would cut spending by 10 % , Tax raising is out of question before 2019 as Medvedev said it and its election era , So they will just boworrow a bit from market keeping debt below 18 % and can hope and pray Oil price keeps around $60 so they can replinsh their Reserve/NWF

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    Post  Austin Mon May 09, 2016 10:59 am

    Before today and 2019 , I think and I firmly believe we will experience a crisis many time worse than 2008

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    Post  GunshipDemocracy Mon May 09, 2016 11:48 am

    Austin wrote:The piece of Shit is written by Russian Economic Development Ministry , So its Official Shit of how they see it Laughing


    same guys who were changing their expert  outlook on oil  pricing like 8 times last year? same guys who cannot run economy on development path? but instead want to sell Rostec, Rosneft and Sberbank to foreign "infestors"?

    I hope Putin last move after election will be kick out those either morons or worse saboteurs. Once his man runs army/politics/Rosguard time to clear economist Vcolumn
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    Post  sepheronx Mon May 09, 2016 3:01 pm

    They never said Rostec, but indeed rosneft. You are correct though, the idiot economic ministers in Russia changed the outlooks in 1 year more than they changed their underwear. It was constant guessing games. Remember when they said the reserve funds would be depleted this year? Yeah.
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    Post  higurashihougi Tue May 10, 2016 3:50 am

    May be it's me, but it seems like Russian finance officers and ministry have a habit of saying "we are running out of money" and "cut spending, cut more spending".
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    Post  kvs Tue May 10, 2016 5:18 am

    higurashihougi wrote:May be it's me, but it seems like Russian finance officers and ministry have a habit of saying "we are running out of money" and "cut spending, cut more spending".

    You are totally correct. There is a monetarist infestation in the Russian finance system. Monetarists are always
    clamoring for spending cuts for the social good and de facto of transfer of public wealth into corporate pockets.
    There needs to be a massive purge of this 5th column.
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    Post  sepheronx Tue May 10, 2016 5:38 am

    The higher school of economics is the only school churning out these economists in Russia, and it is a liberal school opened in the 90's under Gaider and Yeltsin. It isn't that these people may be fifth columnists, but it means that the policy of the people who come out of these schools are liberal economic mindset folk. So in other words, they believe in these concepts of "tightening the belt" or the correct term "Austerity" when Austerity doesn't necessarily translate to growth and wealth. In some instances, it translate to a circular pattern of continuous falling. But the Russian government also has other schools of thought and it also produced others who gave way to ideas like the near freedom for small businesses to operate in Russia and other good economic processes like low taxation and taxing the resources more so than the industries as a whole. In turn, this created huge reserves of wealth and kept a lot of businesses operating and expanding in Russia.

    But once someone threw a wrench into this (US and EU with sanctions especially on low credit availability), the same old school economists didn't really know what to do. I imagine there was great panic. In this case, floating the Ruble and having high interest rates at first was a good idea. Floating Ruble made it more honest of a currency and it also cushioned the fall of the oil and gas revenue drop, while the interest rates being high forced businesses to give up debt (debt repayment) and start using their own savings for expansion of production. Issue with that it is only the major companies in Russia that are capable of using (and currently are) their finances for expansion while most other businesses cannot due to lack of saved revenue from high debt repayments in the past, even more so now. Technically, if they did drop interest rates to be around 4% now, there would be a massive growth in production, procurement and also spending, but that may not end up being a good thing as it will severely increase debt as a whole and that never works out in the end for anyone. Inflation may also go up as well (the CBR reasoning is incorrect for that they think it is to fight inflation, which Inflation does hurt growth big time, but the other side of it they are not mentioning makes more sense).

    We are coming to a time now, where as much as it is hard to get loans and spend, and due to this, creates a massive drop in economic activity as such, is also a time were we are seeing in what I believe to be a more honest economic system. Russia under this doctrine will never be "rich" but it will never be "poor" either internally. It may even strengthen Russia internally as once debt is repaid to outsiders, they cannot use the monitory system against them anymore, as the companies can simply use generated revenue/profit and even if high, internal loans to expand itself. Some businesses in russia are operating at 20% interest rate loans (I got this from some venture capital guy in Russia who claimed this, but no real facts) but they are able to operate and expand even if the rates were high. They just had to do it in increments and mot on extreme amounts (so small growth).

    As for things like the whole saving funds, the purpose behind them is exactly what KVS stated - they are meant to be used during tough times. Even the fifth columnist scumbag Kudrin mentioned that years ago during its creation - a mattress of funds as some called it back then. But they are forgetting that the times are now, but the spending may be in the wrong place to warrant the use of this. I essentially think that it should entirely be used as liquidity for banks and businesses to be able to acquire in forms of venture funds to just overall investments (like Rostec) in key areas of the economy that they know they will see major growth. And if bloomberg article was right (one posted here multiple of times), then that is what they are using it for.
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    Post  GunshipDemocracy Tue May 10, 2016 11:07 am

    sepheronx wrote:They never said Rostec, but indeed rosneft. You are correct though, the idiot economic ministers in Russia changed the outlooks in 1 year more than they changed their underwear. It was constant guessing games. Remember when they said the reserve funds would be depleted this year? Yeah.

    As for guessing I need to stop bitching about them but we need to start to charge for our predictions instead. Hit rati is maybe even better for ours  Twisted Evil  Twisted Evil  Twisted Evil

    True, my bad not Rostec but Helicopters of Russia, I cannot get this polity of selling at all price telling me that there is a  hand of free market and investors (Westerner will bring development not Russia down? It must be some behind scene game but beyond my knowledge and understanding...info war to confuse west? before it is not too late that Russia is too powerful to bring he r down  w/o WW3?

    Ulyukayev: the state is looking for a strategic investor for the privatization of "Helicopters of Russia"

    http://tass.ru/ekonomika/3210104

    PARIS, April 15. / TASS /. The state may sell a controlling stake in the "Helicopters of Russia" in the privatization, asset interested in French companies, including European aviakontserna the Airbus, but the question of the acquisition of the entire company was not a controlling interest. He told reporters after a meeting with representatives of French business circles Economic Development Minister Alexei Ulyukayev.

    "Our French colleagues are interested in the privatization of" Helicopters of Russia "-.. Russian holding Specifically, the Airbus company, he will also be privatized, but for a different scheme -. Through a strategic investor referrals and probably in the interest of the company and not the interests of the budget", - he said, .

    The Minister noted that the sale will deal with the Ministry of Industry of the Russian Federation. "As a rule, this kind of companies are selling to strategic investors", - said Ulyukayev.

    According to him, the Airbus company has expressed an interest, but specifics on this issue no.
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    Post  GunshipDemocracy Tue May 10, 2016 11:14 am

    higurashihougi wrote:May be it's me, but it seems like Russian finance officers and ministry have a habit of saying "we are running out of money" and "cut spending, cut more spending".

    Cutting unnecessary spending (every governor of shthole does not need abrand new Mercedes S klasse s, Lada is not bad either right?), optimizing procurement mechanisms likr ensuring no western software is bought by state administration/companies and productivity growth is key here.

    But cuts on pensions/high tarriss cut on schools is liberast way to undermine society and public order for sake of couple of thieves and speculators.



    sepheronx wrote:The higher school of economics is the only school churning out these economists in Russia, and it is a liberal school opened in the 90's under Gaider and Yeltsin.  It isn't that these people may be fifth columnists, but it means that the policy of the people who come out of these schools are liberal economic mindset folk.  So in other words, they believe in these concepts of "tightening the belt" or the correct term "Austerity" when Austerity doesn't necessarily translate to growth and wealth.  In some instances, it translate to a circular pattern of continuous falling.  But the Russian government also has other schools of thought and it also produced others who gave way to ideas like the near freedom for small businesses to operate in Russia and other good economic processes like low taxation and taxing the resources more so than the industries as a whole.  In turn, this created huge reserves of wealth and kept a lot of businesses operating and expanding in Russia.

    But once someone threw a wrench into this (US and EU with sanctions especially on low credit availability), the same old school economists didn't really know what to do.  I imagine there was great panic.  In this case, floating the Ruble and having high interest rates at first was a good idea.  Floating Ruble made it more honest of a currency and it also cushioned the fall of the oil and gas revenue drop, while the interest rates being high forced businesses to give up debt (debt repayment) and start using their own savings for expansion of production.  Issue with that it is only the major companies in Russia that are capable of using (and currently are) their finances for expansion while most other businesses cannot due to lack of saved revenue from high debt repayments in the past, even more so now.  Technically, if they did drop interest rates to be around 4% now, there would be a massive growth in production, procurement and also spending, but that may not end up being a good thing as it will severely increase debt as a whole and that never works out in the end for anyone.  Inflation may also go up as well (the CBR reasoning is incorrect for that they think it is to fight inflation, which Inflation does hurt growth big time, but the other side of it they are not mentioning makes more sense).

    We are coming to a time now, where as much as it is hard to get loans and spend, and due to this, creates a massive drop in economic activity as such, is also a time were we are seeing in what I believe to be a more honest economic system.  Russia under this doctrine will never be "rich" but it will never be "poor" either internally.  It may even strengthen Russia internally as once debt is repaid to outsiders, they cannot use the monitory system against them anymore, as the companies can simply use generated revenue/profit and even if high, internal loans to expand itself.  Some businesses in russia are operating at 20% interest rate loans (I got this from some venture capital guy in Russia who claimed this, but no real facts) but they are able to operate and expand even if the rates were high.  They just had to do it in increments and mot on extreme amounts (so small growth).

    As for things like the whole saving funds, the purpose behind them is exactly what KVS stated - they are meant to be used during tough times.  Even the fifth columnist scumbag Kudrin mentioned that years ago during its creation - a mattress of funds as some called it back then.  But they are forgetting that the times are now, but the spending may be in the wrong place to warrant the use of this.  I essentially think that it should entirely be used as liquidity for banks and businesses to be able to acquire in forms of venture funds to just overall investments (like Rostec) in key areas of the economy that they know they will see major growth.  And if bloomberg article was right (one posted here multiple of times), then that is what they are using it for.


    My educated guess is  Uncle Vova prepares for worst case scenarios military/terrorizm (MIA, Rosgvardia) preparing for elections...after elections both in Russia and US we might see change in economic vector. For some reason glazyev is also kept as his adviser...
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    Post  sepheronx Tue May 10, 2016 2:12 pm

    They talk on privatization, but it won't go the way they or west thinks. Putin has final say and it was already mentioned that Russian businesses, banks and oligarchs have first dibs, and second is strategic partners. As well, it isn't for controlling share either. A company cannot be controlled by two separate entities half/half. Rosneft for instance is 69.5% controlled by a state company. They plan to sell 19.5% shares. So all in all, Rus gov keeps 50%+1 share, meaning they keep control. Biggest buyers of helicopters was Gazprom and rosneft, so share sales of roshelicopters may well be gazpromobank and others (not all shares for sale means a single entity will purchase all).
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    Post  sepheronx Wed May 11, 2016 6:32 am

    Production of gold and silver in the Russian Federation for the 1st quarter 2016
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    Post  Austin Wed May 11, 2016 7:46 pm

    Russia Convenes Presidential Council to Boost Economy

    http://www.themoscowtimes.com/business/article/russia-convenes-presidential-council-to-boost-economy/569151.html

    Stuck in a second year of recession and facing a long period of economic stagnation, Russian officials are searching hard for ways to stimulate growth.

    On May 25, a presidential economic council will convene for the first time in three years. According to presidential aide Andrei Belousov, it aims to achieve stable 4 percent annual growth before the end of the decade.


    If that target is missed, Belousov warned, Russia's tax base will stagnate and its infrastructure will degrade. Moreover, he told the Vedomosti newspaper, "without new investment, social infrastructure will degenerate and social dissatisfaction will grow."


    Russia's economy has suffered from the collapse of oil prices in 2014. Analysts say the country needs deep structural reform to avoid a lengthy period of stagnation. The council meeting will discuss a cocktail of measures to locate new sources of growth. Putin will listen to Economic Development Minister Alexei Ulyukayev and hear a report by the Center for Strategic Research, a think tank recently headed by respected former finance minister Alexei Kudrin.

    "All participants agree that the growth target can be hit after 2018, and some even say sooner," Belousov told Vedomosti.

    One proposal to be heard at the council a tax break on capital investment, which was proposed by Putin last year. Increased state funding for infrastructure projects and exports is also on the list of options, as well as programs to subsidized lending to business.

    Another measure is wage restraint. A new economic outlook written by the Economic Development Ministry and obtained by Kommersant, a newspaper, proposes to hold down salaries for the next two years to stimulate growth. Any government move to limit public sector pay would be echoed by private employers, said Valery Mironov, an economist at Moscow's Higher School of Economics.

    This would potentially increase company profits, improve the competitiveness of Russian exports and allow the government to save money. But would come at a price. Real incomes have been shrinking more than a year. The ministry said its move would see wages fall a further 2.8 percent this year and 0.3 percent in 2017 in real terms. It said the value of pensions would decrease by 4.8 percent this year and by 2 percent in 2017.

    That would raise poverty levels, already their highest in nearly a decade. It may also worsen a slump in consumer spending that could nullify any positive effect on growth. "Such measures are not humane and even harmful to the economy," Sergei Afontsev, economist at the Moscow State Institute of International Relations.

    Meanwhile, small business, which are the engine of many Western economies, are having a tough time. Last year saw criminal investigations into businesses rise to their highest level in half a decade, according to a report prepared by Russia's business ombudsmen, Boris Titov and seen by the RBC news agency.

    Such investigations are often a sham used to dismantle and redistribute businesses. The report said the number of tax probes increased 62 percent least year, while the conviction rate fell 15 percent.

    Sergei Afontsev, an economist at the Moscow State Institute of International Relations, says the flurry of ideas around the presidential council meeting has much to do with conjuring faster growth in time for presidential elections in 2018, when Putin could seek a fourth term.

    Four percent growth should be possible, he says, but "the methods offered so far don't offer any cause for enthusiasm."
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    Post  GunshipDemocracy Wed May 11, 2016 8:14 pm

    sepheronx wrote:They talk on privatization, but it won't go the way they or west thinks. Putin has final say and it was already mentioned that Russian businesses, banks and oligarchs have first dibs, and second is strategic partners. As well, it isn't for controlling share either. A company cannot be controlled by two separate entities half/half. Rosneft for instance is 69.5% controlled by a state company. They plan to sell 19.5% shares. So all in all, Rus gov keeps 50%+1 share, meaning they keep control. Biggest buyers of helicopters was Gazprom and rosneft, so share sales of roshelicopters may well be gazpromobank and others (not all shares for sale means a single entity will purchase all).

    True, Putin seems to fight with this but a) he looks like lone rider to fight against libarstici b) seems to listen very often to them

    BTW With Helis of Russia Ulukayev openly said controlling share...
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    Post  sepheronx Wed May 11, 2016 8:15 pm

    Some of the ideas are good, but the terrible one is about wage freezes. Russia is over 70% reliant on their own people in consumption to GDP, that it will cause a gdp decrease. Export shares less than consumer spending in shares of gdp. Whoever came up with that idea should be fired instantly. Venezuela style economics....

    Why should the state be sole provider to infrastructure? Why isn't the private companies getting involved?

    There is a major fundamental flaw in Russia - everyone wants everything, but not want to pay for it. They want public medical care, but spend lowest taxes in europe.

    Maybe it's is time that Russia starts getting the private sector to start pulling it's weight.

    Also, I agree, these inspector groups are causing problems for small companies. Disbanding these groups and get an NGO (Russian, not foreign) involved in inspections.
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    Post  GunshipDemocracy Wed May 11, 2016 8:23 pm

    sepheronx wrote:Some of the ideas are good, but the terrible one is about wage freezes. Russia is over 70% reliant on their own people in consumption to GDP, that it will cause a gdp decrease. Export shares less than consumer spending in shares of gdp. Whoever came up with that idea should be fired instantly. Venezuela style economics....

    Why should the state be sole provider to infrastructure? Why isn't the private companies getting involved?

    There is a major fundamental flaw in Russia - everyone wants everything, but not want to pay for it. They want public medical care, but spend lowest taxes in europe.

    Maybe it's is time that Russia starts getting the private sector to start pulling it's weight.

    Also, I agree, these inspector groups are causing problems for small companies. Disbanding these groups and get an NGO (Russian, not foreign) involved in inspections.


    Or executed as whole of HSE. State is funding If works means subcontracting private companies as well or am I wrong? Lowest taxes is good for rich not poor. Poor need socialism and reasonable balance between spending on social and level of taxation.

    But first of all CBR is somehow out of pic here? why?

    IMHO SME first let to grow -hope and opportunity for millions to make more money and live better. Sure they will be cheating on taxes but if this will make economy grow let it be Smile. Maybe chek India for example about SME sector experiences?

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    Post  sepheronx Wed May 11, 2016 8:24 pm

    GunshipDemocracy wrote:
    sepheronx wrote:They talk on privatization, but it won't go the way they or west thinks. Putin has final say and it was already mentioned that Russian businesses, banks and oligarchs have first dibs, and second is strategic partners. As well, it isn't for controlling share either. A company cannot be controlled by two separate entities half/half. Rosneft for instance is 69.5% controlled by a state company. They plan to sell 19.5% shares. So all in all, Rus gov keeps 50%+1 share, meaning they keep control. Biggest buyers of helicopters was Gazprom and rosneft, so share sales of roshelicopters may well be gazpromobank and others (not all shares for sale means a single entity will purchase all).

    True, Putin seems to fight with this but a) he looks like lone rider to fight against libarstici b) seems to listen very often to them

    BTW With  Helis of Russia Ulukayev openly said controlling share...

    Re-read your link again. They stated 49% but that wasn't guaranteed. Oboronprom owns 100% of it, so 51% will be theirs. But as mentioned in your link, it will be sold between 25 - 49% and to strategic partner. Not a single company can be guaranteed all those shares. Oboronprom is various companies in 1 stock company to own majority of others. So that company will still have majority share.

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    Post  GunshipDemocracy Thu May 12, 2016 12:16 am

    HMS group has produced a compressor unit for the joint Institute for nuclear research

    http://www.sdelanounas.ru/blogs/77496/



    sepheronx wrote:
    GunshipDemocracy wrote:
    sepheronx wrote:They talk on privatization, but it won't go the way they or west thinks. Putin has final say and it was already mentioned that Russian businesses, banks and oligarchs have first dibs, and second is strategic partners. As well, it isn't for controlling share either. A company cannot be controlled by two separate entities half/half. Rosneft for instance is 69.5% controlled by a state company. They plan to sell 19.5% shares. So all in all, Rus gov keeps 50%+1 share, meaning they keep control. Biggest buyers of helicopters was Gazprom and rosneft, so share sales of roshelicopters may well be gazpromobank and others (not all shares for sale means a single entity will purchase all).

    True, Putin seems to fight with this but a) he looks like lone rider to fight against libarstici b) seems to listen very often to them

    BTW With  Helis of Russia Ulukayev openly said controlling share...

    Re-read your link again. They stated 49% but that wasn't guaranteed. Oboronprom owns 100% of it, so 51% will be theirs. But as mentioned in your link, it will be sold between 25 - 49% and to strategic partner. Not a single company can be guaranteed all those shares. Oboronprom is various companies in 1 stock company to own majority of others. So that company will still have majority share.


    Your right, my bad. Of course it is better but actually still cannot see and advantage to sell 49% of shares to hostile country. I am not sure if this would be enough to keep France on side of Russia (like Mistral deal pressure of US is just to high)
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    Post  sepheronx Thu May 12, 2016 3:58 am

    The government got flack (I actually do not know the source behind it) as I have read an article where Putin was defending himself regarding the privatization. Flack which was claimed in the article (this must have been a few months ago) stated that some in the west whom are already investors were perplexed to the idea that these privatization projects were nothing but ways to either make his friends richer or that there wont be a real competition to purchase those stocks cause he will sell them to his friends. But Putin did state time and time again that it isn't so much about the money they will be looking at, but at how "strategic" this partner will be. I am not saying it isn't about the money, cause it is, that is the reason why they are looking at selling stocks of companies, but it has more to do with who they will sell them to and speculations are everywhere. The whole concept of stating "Airbus and France are interested" is a way of trying to show how open this is. But even in the same article they state they will sell it to a strategic investor:
    "Our French colleagues are interested in the privatization of" Helicopters of Russia "-.. Russian holding Specifically, the Airbus company, he will also be privatized, but for a different scheme -. Through a strategic investor referrals and probably in the interest of the company and not the interests of the budget", - he said, .

    They wont mention who is a strategic investor, but there is a whole range of them. My first guess would be Gazpromobank since Gazprom and other oil companies are massive consumers for such hardware and were mentioned as such in an article published on VPK.name that mentioned they moved to a 4 day work week rather than 5 due to massive reduced orders and issues thanks to global economy. Next would probably a foreign enterprise that is in need of helicopters (I wouldn't trust Airbus at all, as they are the type not to be interested in purchasing such equipment from Russia) and would be willing to make orders from the company in exchange they get some of that wealth back (I would seriously pitch to India, China and Vietnam as potential buyers cause they purchased a lot of these type of aircrafts. Maybe even Egypt). So I imagine there is a whole bunch of groups interested. But it is rather a way of saying "Look, this whole privatization program is open for everyone" as that is also good for business.

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