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    Russian Economy General News: #12

    kvs
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    Post  kvs Tue Aug 24, 2021 1:37 am

    By "technology" this journalist means cell phones. By such standards most of the advanced west does not make any such technology
    either. BTW, Apple uses Chinese engineers and not just assembly line workers with all the "intellect" residing in the USA.

    Russians are really under informed and under educated about the reality of the mythical advanced west. They take so much that
    they have for granted and assume it is bottom of the barrel. This is a collective mental disease that was created during the Soviet
    time, but will take generations to undo. Russians are lucky they have Putin and others who are not idiots who measure Russia's
    success by cell phones.

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    Post  Big_Gazza Tue Aug 24, 2021 5:54 am

    Kiko wrote:We switched to our own: why Russian goods are often more expensive than foreign ones, 22/08/2021.


    Too pessimistic. Not a single word regarding the inherent advantages of promoting import substitution - reduction of capital outflows (payments for imports), increased taxation base (local enterprising making more profit), increased employment opportunities, and export of surplus for foreign earnings (and taking business away from the #$@&s who are trying to sabotage Russias economy and undermine her geopolitics).

    These goals take time to mature. Its a (multi) decadal plan, and the piteous crying of mercenary business types who only care to make a fortune from export/re-sale needs to be ignored with heaps of scorn and derision.

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    Post  Scorpius Tue Aug 24, 2021 9:51 am

    such morons, who imagine themselves to be experts, do not understand elementary things. Economics and technology are a pyramid. You can't master the next level without a solid foundation. So, you first organize resource sovereignty, then food sovereignty, then sovereignty in the field of basic energy technologies... fucking nonsense like iPhones is not even in the tenth place on this list. Right now, Russia is busy ensuring sovereignty in the field of microelectronics.

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    Post  ALAMO Thu Sep 02, 2021 9:07 am

    Some nice info for Russian food products export.



    For non-speaking ones, the shortcut :

    Russian-made ice cream created a country-wide hysteria in China after President Xi was treated with them by "his dearest friend Vladimir".
    Its sales have hiked tenfold since then, and a 300% y/o/y increase continues.
    Several Russian brands are already there, and now the Chinese business looks for the opportunity and seeks ice cream suppliers from Russia.
    The same applies to chocolate, it is becoming fancy in both Japan and China. Several Russian sweets brands are sold in two big general stores net in Japan already.

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    Post  par far Fri Sep 03, 2021 10:20 pm

    Why is Russia getting money from IMF?

    https://www.rt.com/business/533858-imf-transfer-russia-reserves-record/

    kvs
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    Post  kvs Fri Sep 03, 2021 10:42 pm

    par far wrote:Why is Russia getting money from IMF?

    https://www.rt.com/business/533858-imf-transfer-russia-reserves-record/


    Russia is part of the IMF and SDRs are not loans. It is similar to US treasury bills but based
    on a basket of currencies. SDRs are a type of asset that can be bought and sold. So
    Russia is doing nothing new since it had US treasury bills in its reserves before.

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    Post  franco Fri Sep 03, 2021 10:46 pm

    kvs wrote:
    par far wrote:Why is Russia getting money from IMF?

    https://www.rt.com/business/533858-imf-transfer-russia-reserves-record/


    Russia is part of the IMF and SDRs are not loans.   It is similar to US treasury bills but based
    on a basket of currencies.    SDRs are a type of asset that can be bought and sold.   So
    Russia is doing nothing new since it had US treasury bills in its reserves before.  


    One of the times that when the rich get richer... it works Laughing

    An interest free credit card... russia
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    Post  par far Sat Sep 04, 2021 4:42 pm

    kvs wrote:
    par far wrote:Why is Russia getting money from IMF?

    https://www.rt.com/business/533858-imf-transfer-russia-reserves-record/


    Russia is part of the IMF and SDRs are not loans.   It is similar to US treasury bills but based
    on a basket of currencies.    SDRs are a type of asset that can be bought and sold.   So
    Russia is doing nothing new since it had US treasury bills in its reserves before.  




    So Russia is buying these and they can sold at a higher price?
    kvs
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    Post  kvs Sat Sep 04, 2021 4:45 pm

    par far wrote:
    kvs wrote:
    par far wrote:Why is Russia getting money from IMF?

    https://www.rt.com/business/533858-imf-transfer-russia-reserves-record/


    Russia is part of the IMF and SDRs are not loans.   It is similar to US treasury bills but based
    on a basket of currencies.    SDRs are a type of asset that can be bought and sold.   So
    Russia is doing nothing new since it had US treasury bills in its reserves before.  




    So Russia is buying these and they can sold at a higher price?

    Same as US, EU or other treasury bills. Nothing to see here, really.

    franco
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    Post  franco Sat Sep 04, 2021 4:47 pm

    par far wrote:
    kvs wrote:
    par far wrote:Why is Russia getting money from IMF?

    https://www.rt.com/business/533858-imf-transfer-russia-reserves-record/


    Russia is part of the IMF and SDRs are not loans.   It is similar to US treasury bills but based
    on a basket of currencies.    SDRs are a type of asset that can be bought and sold.   So
    Russia is doing nothing new since it had US treasury bills in its reserves before.  




    So Russia is buying these and they can sold at a higher price?

    Not buying any thing. Basically a line of credit that is interest free.
    kvs
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    Post  kvs Sat Sep 04, 2021 5:33 pm

    SDRs can be traded and are not loans.

    https://www.imf.org/en/About/FAQ/special-drawing-right

    The Fund facilitates transactions between members seeking to sell or buy SDRs
    and these counterparties to the voluntary arrangements that effectively make a market
    in SDRs. Under the guidance of the Fund, participants in the SDR department can also
    enter into bilateral transactions amongst themselves or with prescribed holders.

    The Special Drawing Right (SDR) allocation is not a loan from the IMF. When the
    IMF allocates SDRs, participants in the SDR Department receive unconditional liquidity
    represented by an interest-bearing reserve asset (SDR holding) and a corresponding
    long-term liability to the SDR Department (SDR allocation).


    It does not take much to find this information.
    Hole
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    Post  Hole Sat Sep 04, 2021 8:47 pm

    The IWF had to give them to Russia and other states because the westeners need the billions to keep their heads over water.

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    Post  GarryB Sun Sep 05, 2021 11:32 am

    So it is more like dividends because others are borrowing more money to pay for Covid effects on their economies but Russia did not.

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    Post  franco Tue Sep 14, 2021 8:48 pm

    The ruble has become one of the 20 most popular currencies in the world

    At the end of July, for the first time since 2016, the Russian ruble entered the top 20 popular world currencies with a 0.18% share in international settlements. This was reported on September 14 by "RIA Novosti" with reference to the data of the global system of interbank transfers SWIFT.

    The ruble is in 20th place, as in December 2016. The share of transfers in rubles was 0.26%.

    The first place is occupied by the US dollar (39.38%), the second is the euro (38.43%). The third line of the rating with 5.99% went to the British pound sterling. The five leaders are the Japanese yen (2.74%) and the Chinese yuan (2.19%).

    On June 4, the Russian Ministry of Finance announced the decision to zero the share of the US dollar in the structure of the NWF. The head of the department, Anton Siluanov, said that the initiative was justified, since now there is increase in sanctions threats against Russia from the United States.

    On the same day, Russian President Vladimir Putin announced that Moscow did not want to get rid of the dollar as a reserve currency or a universal means of payment. At the same time, he noted that Washington's actions are detrimental dollar as the world's reserve currency.

    According to the head of the Accounts Chamber Alexei Kudrin, the rejection of the dollar in the structure of the National Welfare Fund will not affect the dollar turnover in Russia. .

    As Gazeta.ru adds , the ruble's entry into the top 20 currencies was facilitated by its active promotion by Russia as a means of international settlements with trading partners. This opinion was expressed by Dmitry Babin, a specialist at BCS World of Investments.

    https://iz-ru.translate.goog/1221524/2021-09-14/rubl-stal-odnoi-iz-20-samykh-populiarnykh-valiut-v-mire?_x_tr_sl=ru&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=ajax,elem

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    Post  Hole Tue Sep 14, 2021 9:56 pm

    In 5 years he will be in the top 10.

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    Post  flamming_python Sun Sep 19, 2021 11:07 am

    https://www.forbes.com/sites/kenrapoza/2021/09/12/quietly-russia-beating-the-market-now-wall-street-eyes-new-ipos/?sh=25cdd0a777ea

    Quietly, Russia Beating The Market. Now Wall Street Eyes New IPOs
    Kenneth Rapoza

    You wouldn’t know this unless you’re invested. And I, for one, am not. But the Russian Amazon AMZN -0.2%, creatively called Ozon, is beating its American originator year-to-date. It did an initial public offering last year. It’s been a good return on investment for investors. Compare that to Chinese IPOs like Didi; a total money loser.

    Six Russian companies have successfully gone public in the past 12 months and at least 10 more are rumored to go public in the coming months.

    Home builder and property-tech company Samolet, value retailer Fix Price, paper and pulp giant Segezha and healthcare services and oncology treatment provider EMC were the big Russian IPOs so far. Ozon and Samolet more than doubled their market caps since listing. Ozon’s market cap is now around $10.5 billion and is open to U.S. retail investors. Samolet is only listed in Moscow, and not a buy for the Robinhood crowd.

    Those new listings represent a nice little headwind for Russian capital markets, in general.

    The shiny, modern, international finance center of Moscow was always designed with the hopes that it would one day be the Russian Frankfurt. Then again, the Frankfurt Exchange was created over 400 years ago. The Russian one: 28.

    When it comes to the stock market, Russia was always the last placed finisher of the big four emerging markets, always overshadowed by China, India, Brazil and South Africa in terms of trading volume and market capitalization of the exchange.

    Ozon listed on the Nasdaq in November 2020. Russia is increasing its own capital markets and new companies are opting to list at home to help it grow, sometimes doing dual listings, as Ozon did.

    “We understand there are more than 10 Russian companies planning to IPO in the next six to 9 months,” Dmitry Panchenko, head of Tinkoff Investments told me. “None of these companies in the pipeline are from the oil and gas sector, which should be encouraging to investors. The companies that are looking to go public have all disrupted their sectors — in retail, pharma, car sharing — or are doing business in interesting new ways,” he says.

    Here are some companies in the Moscow rumor mill:

    Delimobil

    “You’ll own nothing and be happy.” Delimobil is playing to the World Economic Forum’s Agenda 2030 of a renter, non-owner society. Delimobil, though...they’ll be the owners in this one. They are one of the leaders in the booming car-sharing market with a fleet of more than 16,000 vehicles. Russians are switching to so-called shared mobility services because cars are costly and incomes are flat. Moscow and other cities see car-sharing as part of the solution to fight traffic in a sustainable manner, though it is unclear how less car ownership, more car rentals, would reduce traffic. Regardless, Delimobil is a play on the “Own Nothing” agenda of Davos. If you buy into that, especially for cars, then Delimobil is worth a look.

    Reuters reported that they are planning an IPO this fall with a dual listing in Russia and the U.S. and may raise over $350 million.

    Softline

    Softline is an IT-services provider working with vendors like Microsoft MSFT +0.9%, Oracle, and IBM IBM -1.4%. The company has a track record of outperforming in the IT market and a strong history of M&A growth. They’re headquartered in London, have around 5,000 employees and reported a turnover in 2020 of $1.8 billion. It will likely draw investor interest as yet another portfolio piece for the theme of global digital transformation. Softline’s revenues were $900 million in 2016 and hit $1.8 billion last year.

    Renaissance Insurance Group

    This is Forbes listed billionaire Boris Jordan’s (CuraLeaf founder) insurance-tech company with leading positions in all key insurance segments. Renaissance is building a bigger insurance market in Russia, a country where insurance products are rarely sold en masse. This trend should change, to mimic the rest of Europe. There is some opportunity there if Jordan gets it right. Renaissance wants to follow in the footsteps of Tinkoff, a Russian fintech/bank now valued at around $20 billion.

    SPB Exchange

    This is a play on the retail investor boom. Purchases of securities by retail investors in Russia reached $6.6 billion in the first quarter, more than double the volume of net purchases for 2020, according to Central Bank of Russia data. The SPB Exchange is the only exchange in Russia which allows retail investors in Russia to trade Apple AAPL -1%, Tesla TSLA +0.2% and thousands more popular stocks legally, with good liquidity and during local working hours. The Moscow Exchange is only now getting in on this act, but it will be hard for them to catch up to SPB Exchange any time soon. Some 12 million retail investors already registered on that exchange via 46 brokerages and the business is growing fast. Could easily be an M&A candidate at this rate.

    Mercury Group

    Mercury Retail is one of Russia's largest ultra-convenience retailer, operating a vast network of approximately 13,500 neighborhood stores nationwide. The company has two highly recognizable brands – Red & White and Bristol – both of which are focused on urban, nearby, easy access shopping. Think 7-Eleven, or better yet, a Duane Reede in New York City.

    The company has reported six straight quarters of double digit (like-for-like) revenue growth and generated approximately $8 billion in revenue last year. It's profitable. It has the highest EBITDA margins in the Russian retail sector thanks to a lean and efficient business model.

    VkusVill

    A leading foodtech player and health-food brand that also operates a chain of retail shops. Think of it as Russia’s Trader’s Joe or Whole Foods WFM 0.0%, but with one of the most recognized and sought-after brands in the country and a popular app. Here is a deep dive into company’s business model, as the word “foodtech” escapes me. Knock yourselves out.

    Familia

    Some call this the Russian TJ Maxx. It’s a pioneer and leading player in the off-price, “outlet” category. They have no real competition. Its business model is similar to that of TJ Maxx as Familia provides a ‘treasure hunting’ experience to customers, allowing them to bargain hunt for name banded items at highly discounted prices. In contrast to the off-price retailers in the U.S., Familia operates in a market which is highly fragmented and has a much bigger potential for growth. Goldman Sachs GS -1.4% and Baring Vostok bought 49% in the company in 2016, while TJX bought 25% in 2019 for $225 million. Looks like they see something special there.
    Steel rods in a factory shine under the lights overhead.

    Metalloinvest

    These guys are the world's largest producer and supplier of something called hot briquetted iron (HBI), an environmentally friendly raw material for the “green steel industry.”

    Ah, so it’s going into the Russian ESG funds. Got it!

    Bloomberg said they are hearing about an IPO in 2022, expecting a capitalization of about $20 billion. The steel industry is one of the dirtiest industries in terms of air emissions: according to World Steel, it accounts for about 7-9% of global greenhouse gas emissions. Companies in the sector are accelerating the transition to green metallurgy under pressure from investors. Russia wants to move in this direction because it is the best way to capture the climate capitalists at the sovereign wealth funds in Europe, especially those in the Nordic countries that have an affinity for Russian investment.

    Otkritie

    This bank’s logo can be seen shining in blue neon not far from the Moscow city center, across from the White House. It was once private. Got crushed. And then got taken over by the Central Bank. Now it is one of the largest state-owned financial groups in the country and will be privatized in an IPO in 2022. This is a well known financial brand in Russia and if they get their act together, could take some share away from Sberbank.

    Otkritie doesn’t want to be a full blown financial ecosystem like Sberbank. Instead, it sees itself as a financial partner business-to-business segment, plus a traditional bank with a strong focus on retail clients. In the first half of this year, the bank’s profit increased 2.6 times year over year to $282 million, while revenue for first half grew 23% $1.37 billion.

    That’s the leaderboard, dami i gospoda.

    Alina Sycheva, head of Capital Markets Origination at Sova Capital in London warns that the Russian companies hopping on the bull market bandwagon “will be heading into busy and crowded market.”

    The Russian pipeline of IPOs has been growing steadily. Note that all but one of the candidates to go public are in the old school space of fossil fuels and metalwork.

    “Russian businesses have matured,” says Sycheva. “They’ve weathered the pandemic by adjusting their business model. There are a number of companies in advanced preparatory stages to go public.”

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    Post  kvs Sun Sep 19, 2021 2:55 pm

    The capitalization metric is useless for Russia because it did not get the flood of investments that China and others did. This has
    more to do with politics and prejudice than objective economic reality. In spite of being starved of foreign investment, Russia has
    managed to get out of the 1990s implosion crater and advance at a good pace.

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    Post  ALAMO Sun Sep 19, 2021 3:24 pm

    kvs wrote:and advance at a good pace.


    This is a really solid understatement.
    Russia is the sole economy in Europe, that actually achieved real growth for the last two decades.
    As a real growth, I mean growth adjusted by the debt model.
    All other economies in Europe stimulated economic growth with massive debt increases.
    Not to mention the US, where the economic growth is actually smaller than the growth of debt.
    We should increase sanctions on them immediately, it is outrageous how stubborn they are denying to pay interest to the real masters of the puppets!

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    Post  flamming_python Sun Sep 19, 2021 3:55 pm

    kvs wrote:The capitalization metric is useless for Russia because it did not get the flood of investments that China and others did.   This has
    more to do with politics and prejudice than objective economic reality.   In spite of being starved of foreign investment, Russia has
    managed to get out of the 1990s implosion crater and advance at a good pace.


    I don't disagree, but good capitalization is great as well cheers
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    Post  GarryB Mon Sep 20, 2021 5:15 am

    The problem with foreign investment is that they expect to make good income from the situation, so in reality it is boosting development and industry, but also draining the economy of profits.

    There was an article posted a few years ago by an American guy who basically outlined that lots of generous foreign investment and international companies moving production into your country is an excellent way to grow a stagnant or backwards economy but ultimately if you don't do the right thing with this investment eventually workers rights and wage increases will lead to the investment moving to the next sweat shop country so you are going to have to deal with that foreign investment disappearing eventually anyway and if your local rich and powerful keep all their money in offshore accounts hidden and not paying taxes then you get a nice taste of the good life and then it is taken away from you.

    He suggested that Russians should be encouraged to invest in their local businesses... especially at the moment while bank interest rates for savings is pathetic, though it does introduce risk if you spread your money around you make less but you also don't risk losing it all in one scheme that goes bust.

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    Post  flamming_python Mon Sep 20, 2021 4:26 pm

    GarryB wrote:The problem with foreign investment is that they expect to make good income from the situation, so in reality it is boosting development and industry, but also draining the economy of profits.

    But no-one will make a profit if due to lack of investment the project stays on paper

    Regardless of where the profit goes, the country will still benefit, via the creation of jobs (which put pressure to drive up wages), and tax collection from the profitable enterprise

    There was an article posted a few years ago by an American guy who basically outlined that lots of generous foreign investment and international companies moving production into your country is an excellent way to grow a stagnant or backwards economy but ultimately if you don't do the right thing with this investment eventually workers rights and wage increases will lead to the investment moving to the next sweat shop country so you are going to have to deal with that foreign investment disappearing eventually anyway and if your local rich and powerful keep all their money in offshore accounts hidden and not paying taxes then you get a nice taste of the good life and then it is taken away from you.

    Investment is not always into production. It can be into a retail or high-street company that sells to the local population (thus not making any sense to move it, but only to expand to other countries), it can be a logistics company (which are decided more by geography & infrastructure than low-wages), it can be an IT-startup (where the wage costs between countries are again not the deciding factor rather the record of the team in question, albeit their operations can be outsourced), it can even be into an infrastructural project such as a toll road or a power station (which again you won't move), it can be into tourism, agriculture, mining, a new golf-course.. all sorts of stuff that are specific to the location.

    Production also comes in different flavours. Some of it only makes sense close to its base of raw materials, or next to secondary industries. You won't be moving a lot of chemical industries out of Russia to Vietnam as not only are their raw material suppliers already next door, but so are their customers - metallurgical, pharmaceutical, etc... industries.

    Another thing that investor assumes is a world-wide free market. In practice you don't have one, most countries have protectionist policies, tariffs for imports and sometimes even duties on exports. In this case for profitability, you'll not only have to factor in which country has lower wages, but which one has the larger domestic market and thus internal demand for the product that it will produce, as well as what free-trade agreements and economic unions it has with which other markets and what their size is.

    He suggested that Russians should be encouraged to invest in their local businesses... especially at the moment while bank interest rates for savings is pathetic, though it does introduce risk if you spread your money around you make less but you also don't risk losing it all in one scheme that goes bust.

    That's definately a good idea. The problem is people's financial and economic illiteracy.
    Apparently Russia has one of the highest levels of economic literacy among its young population though, there was an article I posted earlier maybe even in this thread. So definitely something to encourage.
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    Post  GarryB Tue Sep 21, 2021 4:08 am

    But no-one will make a profit if due to lack of investment the project stays on paper

    But not all projects succeed and make money, so paper projects means no profit but also no risk and the ones with too much risk remain paper projects.

    Regardless of where the profit goes, the country will still benefit, via the creation of jobs (which put pressure to drive up wages), and tax collection from the profitable enterprise

    That is what I am saying, but in this day an age with interests from banks being at an all time low investment makes more sense than hiding your money in a bank... why not make that money work for you by investing it in your own country... in your own region.

    Spread it around so there is less chance of losing it all, but if things go well more often than not and the things you are investing in have other benefits and allow progress and development then the dividends are the icing on the cake.

    In a small town if the people want something they could crowd fund it and pay for it themselves instead of expecting central government to pay for it...

    It also means you can design it to make a profit and get a good return on the money spent in the long run.

    Here in Dunedin we had a Rugby/Cricket stadium but they decided they wanted a new stadium that was covered and also closer to our University.... lots of debate and honestly I didn't think it was worth the 200 million it was going to cost, but they decided to do it anyway so now it is built and it is an excellent venue.

    Bands used to ignore Dunedin when they toured New Zealand because Dunedin is not as big as Christchurch so they would have their only concert in the south island in Christchurch. But now we have a covered stadium we don't have to worry about cancellations due to rain so they come here instead of Christchurch.

    As I said I was not super keen on the idea to begin with, but now we have it we should spend more money to make it successful. There is a rail line going right past the stadium... put a train stop there with air stairs into the stadium so if it is a rugby game or concert you could buy tickets anywhere in the south island and jump on a train and be taken directly to the stadium without worrying about parking or accommodation, and when the concert or game is over just jump back on the train and go home. It would not be expensive and would reduce traffic congestion around the stadium before and after concerts and games. They could have special tickets so you go to the concert by train and then get a van to a nearby hotel or motel and stay for the weekend and then get back on another train to go home from where you came from the next day or a couple of days later so local hotels and motels don't miss out on trade... most of the time they are fully booked very quickly when we have a concert anyway.

    These sorts of things shouldn't rely on central government to pay for... we should be able to sort this sort of thing out ourselves...

    Production also comes in different flavours. Some of it only makes sense close to its base of raw materials, or next to secondary industries. You won't be moving a lot of chemical industries out of Russia to Vietnam as not only are their raw material suppliers already next door, but so are their customers - metallurgical, pharmaceutical, etc... industries.

    True, but if Nike builds a factory that makes shoes including special fabrics and materials (foams and rubbers and gels) that it needs to make its shoes it is not just going to walk away and abandon all that stuff... most of it will be packed up and shipped to the country they are moving production to so they don't need to buy new machines and so the locals can't just set up competitive production.

    [quote]Another thing that investor assumes is a world-wide free market. In practice you don't have one, most countries have protectionist policies, tariffs for imports and sometimes even duties on exports. In this case for profitability, you'll not only have to factor in which country has lower wages, but which one has the larger domestic market and thus internal demand for the product that it will produce, as well as what free-trade agreements and economic unions it has with which other markets and what their size is./quote]

    Not really... the things made in China would not be sold world wide and skipping borders and tarriffs so easily if they were Chinese companies... they are western companies so they have world wide agreements that allow them into markets that China or say Russia are blocked from.

    Also to bypass Russian import restrictions a lot of western companies produce their products inside Russia so there is no import at all... and like Thales they probably find that products they make in Russia are good quality well made and much cheaper than they can make in other countries so they start producing for other markets... they own the factories so they make the profits... they make bigger profits because the products can be made cheaper.

    The problem is people's financial and economic illiteracy.

    Very true... some silver tongued shark gets a whole lot of people to "invest" their money and then disappears is not good for any economy.

    It is not like savings so there is room for mistakes and losses, but if you are sensible and as they say in the west... don't put all of your eggs in one basket...

    Risk management and all that...
    flamming_python
    flamming_python


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    Russian Economy General News: #12 - Page 16 Empty Re: Russian Economy General News: #12

    Post  flamming_python Tue Sep 21, 2021 7:24 am

    GarryB wrote:But not all projects succeed and make money, so paper projects means no profit but also no risk and the ones with too much risk remain paper projects.

    And you'll never succeed if you don't take the risk.

    So either way investments are good

    That is what I am saying, but in this day an age with interests from banks being at an all time low investment makes more sense than hiding your money in a bank... why not make that money work for you by investing it in your own country... in your own region.

    If you have the money, and you have the time and expertise (or a trusted party to do so)

    These sorts of things shouldn't rely on central government to pay for... we should be able to sort this sort of thing out ourselves...

    But you pay taxes to the central government. That's a cut from your paycheck already, that's exactly meant to cover such things, such as local sports infrastructure and whatever. Communal things and communal property, that the community as a whole benefits from collectively.

    That the government might not be spending things efficiently is a different problem. The solution to which is not paying more out your own pocket, but demanding local control over government and municipal spending.

    True, but if Nike builds a factory that makes shoes including special fabrics and materials (foams and rubbers and gels) that it needs to make its shoes it is not just going to walk away and abandon all that stuff... most of it will be packed up and shipped to the country they are moving production to so they don't need to buy new machines and so the locals can't just set up competitive production.

    I think that's actually a more specific case, than a general one.

    In general terms, I think more often than not a new factory will come with a lot of calculations about the local area and local market, it will necessitate a lot more secondary investment to train people and maybe run transport lines to the factory and whatever else. You don't really want to pack everything up and start again in a different country unless you are making a loss. While if you want to expand production and take advantage of lower wages, well then just open a new factory.

    Making Nike footwear is a low-skilled job, with low-requirements, and low levels of technical expertise needed. The harder a type of production is to master however, the less feasible it is to pack it up and move it.
    What really happened in the West is not so much that all the multinationals moved their factories. It's that they started investing into new factories in Asia, the Asian countries themselves started to create their own factories and companies, and ended up out-competing the existing factories, shipyards, metallurgical plants, etc.. in America, Britain and so on.
    At that point, the European and American factories didn't so much move, as simply close down due to losses.
    And they weren't necessarily beaten on wages; South Korean wages aren't particularly lower than Britain's yet their shipbuilding industry is the largest in the world, while Britain's once world-dominating ones barely even exist anymore.

    In the end though the Western multinationals didn't mind that much. They profited from lower-cost production in Asia, often got buy into or own the means of production in those countries, while the countries who prospered were Western allies anyway such as South Korea, or Japan, or Taiwan.
    Even China in the 80s was supported by the West against the Soviets.
    However as China came into its own this model started to become self-defeating for the West. China has now copied or mastered their technologies, it has grown rich off the investments the West made into it, and it has ambitions of its own. So now suddenly protectionism has come into vogue again in America.

    Not really... the things made in China would not be sold world wide and skipping borders and tarriffs so easily if they were Chinese companies... they are western companies so they have world wide agreements that allow them into markets that China or say Russia are blocked from.

    They are Chinese companies. There isn't a single factory in China that isn't at least 51% owned by the state or a state-owned company. Now those factories can certainly produce components and end products for Western multinationals by license agreements, and do so. However there are plenty of Chinese factories that sell directly to wholesalers, industries, high street stores around the world too.

    Also to bypass Russian import restrictions a lot of western companies produce their products inside Russia so there is no import at all... and like Thales they probably find that products they make in Russia are good quality well made and much cheaper than they can make in other countries so they start producing for other markets... they own the factories so they make the profits... they make bigger profits because the products can be made cheaper.

    That's exactly what I'm talking about, bypassing the protectionism and gaining access to a given market is often more of a consideration that just the wages. In Russia's case it has a large internal market, and a free trade zone with no customs with a range of other ex-Soviet countries as well. Producing in Russia is good business for these Western companies.
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    Firebird


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    Russian Economy General News: #12 - Page 16 Empty Re: Russian Economy General News: #12

    Post  Firebird Wed Sep 22, 2021 10:44 am

    flamming_python wrote:

    Here are some companies in the Moscow rumor mill:

    Delimobil

    “You’ll own nothing and be happy.” Delimobil is playing to the World Economic Forum’s Agenda 2030 of a renter, non-owner society. Delimobil, though...they’ll be the owners in this one. They are one of the leaders in the booming car-sharing market with a fleet of more than 16,000 vehicles. Russians are switching to so-called shared mobility services because cars are costly and incomes are flat. Moscow and other cities see car-sharing as part of the solution to fight traffic in a sustainable manner, though it is unclear how less car ownership, more car rentals, would reduce traffic. Regardless, Delimobil is a play on the “Own Nothing” agenda of Davos. If you buy into that, especially for cars, then Delimobil is worth a look.



    And some people think "you will own nothing" is a "conspiracy theory".

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    franco
    franco


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    Russian Economy General News: #12 - Page 16 Empty Re: Russian Economy General News: #12

    Post  franco Fri Sep 24, 2021 1:17 pm

    Fitch upgrades Russia’s economic outlook, citing impressive cash cushion from oil revenues

    International ratings agency Fitch has improved its forecast for Russia’s economic growth this year to 4.3% from the previously expected 3.7%, said Douglas Winslow, Director at Fitch Ratings.

    According to the agency, the higher GDP growth is expected as a result of legislative reforms aimed at removing structural restrictions on growth while maintaining macroeconomic stability. Fitch analysts also pointed to a significant strengthening of the budget and external accumulative buffers due to consistently high oil prices and other revenues.

    Fitch has maintained its forecast for Russia’s GDP growth of 2.7% in 2022 and 2% in 2023.

    Inflation in the country is expected to hit 6% this year, 4.2% in 2022 and 4% in 2023, Fitch said. The key central bank interest rate will grow from the current 6.75% to 7% this year, according to the forecast. The agency’s analysts expect the rate to be reduced to 6% in 2022, and to 5.5% in 2023.

    Among the negative factors affecting the growth of the Russian economy, the agency named the introduction of additional Western sanctions, which undermine macroeconomic and financial stability. Fitch also noted the increasing impact of oil price volatility on the Russian economy and the deterioration of the sovereign balance of payments, including liabilities growth in the large public sector.

    https://www.rt.com/business/535638-russia-economy-fitch-outlook/

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