EEC. The EEC was used to foist the EU Orwellian wannabe onto Europe.
Russia and economic war by the west #3
kvs- Posts : 15833
Points : 15968
Join date : 2014-09-11
Location : Turdope's Kanada
- Post n°501
Re: Russia and economic war by the west #3
EEC. The EEC was used to foist the EU Orwellian wannabe onto Europe.
lancelot- Posts : 3123
Points : 3119
Join date : 2020-10-18
- Post n°502
Re: Russia and economic war by the west #3
The funny thing is they sold the federation project by claiming that European countries had to team up to be able to compete against the US and China. And yet the EU turns out to be an appendage of the US.kvs wrote:The EEC was converted into a unitary state construct through bureaucratic and political machinations. The EU has very little to do with the original EEC. The EEC was used to foist the EU Orwellian wannabe onto Europe.
kvs, LMFS, Kiko and Broski like this post
Kiko- Posts : 3832
Points : 3908
Join date : 2020-11-11
Age : 75
Location : Brasilia
- Post n°503
Re: Russia and economic war by the west #3
The country has essentially ceased to rely on oil and gas exports as a source of income, HSE University Rector Nikita Anisimov has said.
Western sanctions imposed on Russia amid the Ukraine conflict have made the country’s economy stronger, Nikita Anisimov, rector of the HSE University in Moscow, has said.
Speaking on behalf of HSE economists at a parliamentary hearing on the draft of the 2025-2027 federal budget on Monday, Anisimov said sanctions have effectively propelled the restructuring of the country’s economy. According to the expert, this has led to Russia “essentially ceasing” its dependence on the export of raw materials such as oil and gas for income – a task the government has been grappling with for years.
“As a result, today, largely due to the situation of external shocks and the rapid restructuring of our economy, we have been able to significantly reduce our dependence on raw materials exports. Thus, we can say that the sanctions have only made our economy stronger and more resilient,” Anisimov stated.
The subject of Russia’s successes in cutting reliance on oil and gas revenues was raised by President Vladimir Putin at the St. Petersburg International Economic Forum (SPIEF) in June. He noted that Russian GDP expanded by 3.6% last year, bouncing back from a 1.2% downturn in 2022, when the country was first targeted by the West’s wide-ranging economic restrictions. Most of that growth stemmed from non-resource-based industries such as manufacturing, construction, and agriculture, as well as trade, hospitality, and financial services, Putin said.
Last month, Finance Minister Anton Siluanov announced that the Russian economy had continued to expand in 2024, with GDP growth in the first half of the year hitting 4.7%. Siluanov said he expected GDP growth at the end of the year to be 3.9%, exceeding the figure for 2023.
Many analysts, both Russian and international, have noted that sanctions have failed to destabilize the country’s economy. Most have attributed this resilience to Russia’s swift pivot to the East for trade, as well as economic policies implemented to offset the effect of the restrictions.
The World Bank and the International Monetary Fund both raised their growth forecasts for the Russian economy earlier this year. The former predicted it to grow by 2.9% in 2024, and in July upgraded Russia to a “high-income country.”
The IMF in April said it expected the country’s GDP to expand by 3.2%, faster than all advanced economies, including the US, the UK, Germany, and France.
https://www.rt.com/business/605405-sanctions-russian-economy-stronger/
GarryB, flamming_python, kvs, Hole and Broski like this post
lancelot- Posts : 3123
Points : 3119
Join date : 2020-10-18
- Post n°504
Re: Russia and economic war by the west #3
Russia has also been driving import substitution programs with support by the Russian Direct Investment Fund for several years.
kvs and Broski like this post
kvs- Posts : 15833
Points : 15968
Join date : 2014-09-11
Location : Turdope's Kanada
- Post n°505
Re: Russia and economic war by the west #3
But to this day we have the "cut off from western markets" dragged out as if it meant anything. China would experience a recession for a few years
but would not melt down over loss of western markets.
GarryB likes this post
Arrow- Posts : 3415
Points : 3405
Join date : 2012-02-12
- Post n°506
Re: Russia and economic war by the west #3
GarryB and dino00 like this post
flamming_python- Posts : 9516
Points : 9574
Join date : 2012-01-30
- Post n°507
Re: Russia and economic war by the west #3
Maybe to the EU
GarryB, kvs and LMFS like this post
Kiko- Posts : 3832
Points : 3908
Join date : 2020-11-11
Age : 75
Location : Brasilia
- Post n°508
Re: Russia and economic war by the west #3
Russia is facing a unique situation where its economy is growing at a rate that many countries in the world can't even dream of. It would seem that growth is always a good thing, unlike the stagnation in the eurozone. But for Russia, rapid GDP growth this year has become a problem. How is this possible?
For years now, Western funds, analysts and the media have been amazed at how the Russian economy miraculously does not fall apart under the weight of sanctions, but, on the contrary, flourishes and finds support within its own industries. Construction takes off thanks to preferential mortgage programs from the state and pulls the economy up. Agriculture suddenly begins to bring in ever higher incomes - and even more than arms sales. The manufacturing industry, which includes the entire military-industrial complex, shows miracles of growth.
This year, our economy has been even more impressive. In the first half of the year, it grew by as much as 4.7%. Yes, that's almost the level of China , whose goal for this year is to grow by five percent.
Many countries may be truly envious of such growth. The same European Union can expect a maximum of one percent growth this year, while Germany and France , as the mouthpieces of the Eurozone, cannot even dream of such a thing. The expected growth of the German economy by 0.1% would be more honestly called a crisis, while the growth of the French economy by 0.7% would be stagnation. The most optimistic forecasts for the United States promise GDP growth of 2.6%. But all of them fall short of the pace of the global economy, which will grow faster: according to the IMF , up to 3.2%. Western countries are dragging the economy of the planet down, and only thanks to developing countries is it able to float. In addition to Russia, of course, China is saving us, trying to grow by five percent a year, and India with its seven percent growth.
It would seem that if our economy is growing at a rate higher than the global average, then we can only rejoice. It means that things are going well in the country. However, in real life it turned out that high growth can be a problem. And the name of this problem is inflation. In July, the Bank of Russia was forced to admit that the plans for inflation of 4.3-4.8% had gone to waste, and raised the forecast to 6.5-7%. This is the largest revision of the inflation forecast ever. No one expected such a turn of events.
Having the experience of the 90s, it seems more common that accelerating inflation usually accompanies a collapsing rather than growing economy. A collapse of GDP means bankruptcy of industrial and agricultural companies, high unemployment, shortages of goods and food products, empty shelves in stores - and from here inflation naturally begins to gallop.
But this is definitely not the reality of 2024. Industry is growing, we feed not only ourselves, but also the entire friendly world with food. The nature of the current inflation is completely different, and it is amazing. It is provoked not by negative trends, but by socially significant and good events. Thus, Russians' real disposable income is growing (by almost ten percent in the second quarter), they began to spend more in stores, buy apartments at super-low interest rates before the closure of some state programs, etc. It could not do without social injections from the state. Incomes are increasing due to the growth of the minimum wage, benefits, payments to large families, participants in the SVO, medical personnel, teachers, pensioners, etc. Salaries are increasing even in private companies, because there are simply not enough hands.
The country has a uniquely low unemployment rate, something that has never happened before. A real physical shortage of workers. At this rate, the word "unemployment" will soon disappear from the lexicon of our country. But this positive trend has become the second serious problem, which is not so easy to solve: even if an unexpected baby boom happens now, we will have to wait two decades for new hands to appear. The fastest way is to admit that our economy cannot cope without employees from neighboring countries. Migrants can help cool down the overheated economy and extinguish the inflationary expectations of the population and business, which significantly exceed inflation itself.
It turns out to be a vicious circle: Russians' incomes are growing, they are ready to spend more, production and sellers are trying to adapt and expand their supply, but there is no one to put to work "over the norm". Prices are growing in the end not because of a collapse in production and physical shortage, but because business does not have time to create more and more to satisfy demands, and an artificial shortage arises. Of course, a shortage from excess is much more pleasant, but no one has cancelled the negative effect.
It would be extremely dangerous to let this situation slide. Because it is possible to slide from a fast-growing economy into a crisis very quickly. As soon as inflation reaches double digits, it becomes difficult and costly for national reserves to stop and reduce it. That is why we have seen such a strong rise in the cost of money in Russia. The economic world has not come up with another way to cool the hot ardor of consumers, including in consumer and mortgage lending (along with the cancellation of some preferential mortgage programs). This is a problem for which an alternative solution would probably win a Nobel Prize.
This is how good deeds can lead to unexpected problems. A striking example is with preferential mortgage programs. Almost a million families were able to improve their housing conditions by taking out a mortgage at really low interest rates over the four years of the programs. At some point, Russia turned into one continuous construction site, and it was construction (along with agriculture) that greatly supported the Russian economy in the very first difficult year - 2022. But the other side of the coin - housing construction also contributed to the acceleration of inflation. It was very difficult for the Central Bank to stop the mortgage lending behind this, which showed record after record.
It is not surprising that the key rate has already become 19%, which means that loans are even more expensive. It seems that neither Russians nor the economy noticed lower rates. And the tightening of the screws will most likely continue. This month, there is a high chance that the Central Bank will raise the rate to 20% - as in the crisis February 2022. The Russian economy is resisting too zealously, and the price of a mistake in this matter is high.
Paradox: the whole world is trying to do everything to speed up its economy, so that it would add at least one hundredth of a percent, and Russia, in fact, is artificially holding back the growth of its economy for its own good. A loss in economic growth by the end of the year is the best option for Russia.
A slight slowdown is already being noted: GDP growth was 4.4% in seven months, 4.2% in nine months (not 4.7% as in six months). Vladimir Putin is confident that the growth rate of our economy will still be comparable or higher than last year, when there was already an excellent result of 3.6%.
https://ria.ru/20241013/ekonomika-1977766481.html
GarryB likes this post
Arrow- Posts : 3415
Points : 3405
Join date : 2012-02-12
- Post n°509
Re: Russia and economic war by the west #3
Poland has higher exports than Russia? Maybe to the EU wrote:
Of course, this is not some super source. It is only necessary to add that Russia produces a lot for its large, developing domestic market.
https://en.wikipedia.org/wiki/List_of_countries_by_exports
GarryB likes this post
Arrow- Posts : 3415
Points : 3405
Join date : 2012-02-12
- Post n°510
Re: Russia and economic war by the west #3
From the text that Kiko posted, it appears that the Russian economy is overheating?
GarryB and owais.usmani like this post
GarryB- Posts : 40448
Points : 40948
Join date : 2010-03-30
Location : New Zealand
- Post n°511
Re: Russia and economic war by the west #3
There will always be problems, but the problems Russia has at the moment are the stuff western politicians can only dream of...
Hole and Kiko like this post
lyle6- Posts : 2550
Points : 2544
Join date : 2020-09-14
Location : Philippines
- Post n°512
Re: Russia and economic war by the west #3
They stopped feeding the West. That's it.Arrow wrote:The question is what caused such a large economic boom in Russia? Sanctions, surprisingly, and investments in domestic capital? Or something else. It is amazing how the most sanctioned country in the world fighting one of the largest wars since the end of World War II has almost 5% GDP growth.
From the text that Kiko posted, it appears that the Russian economy is overheating?
kvs, LMFS and Broski like this post
lancelot- Posts : 3123
Points : 3119
Join date : 2020-10-18
- Post n°513
Re: Russia and economic war by the west #3
No it is not. The same thing happened to Germany and the US during WW2.Arrow wrote:The question is what caused such a large economic boom in Russia? Sanctions, surprisingly, and investments in domestic capital? Or something else. It is amazing how the most sanctioned country in the world fighting one of the largest wars since the end of World War II has almost 5% GDP growth.
Between people getting extra income from fighting in the war, and their families spending it in the economy, to the Western sanctions leaving the market open for Russian companies to produce everything from perfume, to furniture, paper, etc, it is not surprising at all.
GunshipDemocracy and Hole like this post
kvs- Posts : 15833
Points : 15968
Join date : 2014-09-11
Location : Turdope's Kanada
- Post n°514
Re: Russia and economic war by the west #3
through its monetarist voodoo that is now resulting in growth-induced inflation. If money was economically priced in Russia, i.e. lending rates reflecting
real inflation in most of the period between 2010 and now, then the system would have developed where demand for money would not always be
a shock crisis. Growth always results in demand for money and consumers are not able to supply this money fast enough to enable proper business
operation and capital investment. The idea that companies get all their money needs met by their customers is moronic. Investments to provide
supply in the future cannot, by definition, be covered by customer purchases in the present. Saving up consumer money is like waiting to buy a
house for cash down. By the time you have accumulated the money for the original target price, the price has jumped by typically several times.
You are chasing a phantom that you will never catch.
GunshipDemocracy and Broski like this post
Arrow- Posts : 3415
Points : 3405
Join date : 2012-02-12
- Post n°515
Re: Russia and economic war by the west #3
No it is not. The same thing happened to Germany and the US during WW2. wrote:
I don't think that Russia's military production and war boosted the Russian economy that much. The case of the USA during World War II is completely different. They devoted about 30% of GDP to war production, which they additionally sold in a Lend-Lease package. Industrial production increased enormously.
Kiko- Posts : 3832
Points : 3908
Join date : 2020-11-11
Age : 75
Location : Brasilia
- Post n°516
Re: Russia and economic war by the west #3
We don't often pay attention to the work of the Russian government, its programs, successes and, what is also important, failures. In vain, because, according to the constitution, it is the government that is obliged to work tirelessly to improve life within the country and the state of the economy. Yesterday, Mikhail Mishustin visited the sites and spoke at the plenary session of the annual export forum "Made in Russia".
Of course, the situation in the export sector became the main topic of the Russian Prime Minister's speech. Dynamics, trends, figures, main groups of goods, and again difficulties and bottlenecks.
It is quite difficult to talk about the export of Russian goods and services, because, despite all efforts, citizens crowd under any publication on this topic, in a discordant chorus whipping up panic and despondency. Some are against selling anything abroad in principle: they say we are selling off the wealth of our children and grandchildren. Others only disdainfully mutter something about ancient industry, the production of galoshes and "being a hundred years behind developed countries." In fact, work in this direction is being carried out without breaks for sleep and lunch - and Russia has something to be proud of, both as it is and where to grow further.
Many simply do not understand how important export is for the economy, and our country is no exception. Firstly, foreign contracts not only load our domestic production, but also, in the new economic conditions, allow us to accumulate foreign currency, which, in turn, goes in the opposite direction to purchase foreign goods and services. Secondly, export is often the sale of goods of a fairly high value added stage, not low-grade raw materials, but secondary products with high added value, that is, with increased marginality. Thirdly, export contracts in most cases require significantly longer chains of cooperation, including with foreign counterparties, simultaneously loading related areas and industries. To export a conditional million tons of wheat, complex work is required from fertilizer producers, farmers, automobile and rail carriers, seaport workers, pilots, ship crews and many others. And so on in any direction.
To be specific, despite the massive hurray propaganda and triumphant reports, the loss of European markets was not painless for our economy. The figures voiced by Mikhail Mishustin speak for themselves. According to the results of last year, exports in the structure of the Russian economy accounted for only 23.3 percent, although just two years earlier this figure was almost 28 percent. This is the worst figure since 1997. In addition to the logical decrease in trade with EU countries , similar trends were noted in trade with Japan , Iran , and Kyrgyzstan . An increase was recorded only in trade with Azerbaijan and Myanmar.
Last year, Russian manufacturers sold $465 billion worth of products abroad, $424 billion of which were goods and the rest were services. Compared to the previous year, which was also not the most favorable, this figure fell by 27 percent.
The economy, like nature, abhors a vacuum, and foreign-made goods poured into the resulting gap. The net export figure (the difference between export and import volumes) in the GDP structure was only 4.3 percent. In pre-war 2021, it was three times higher. That is, the Russian economy is increasingly buying abroad and selling less and less there. Rosstat noted a concomitant increase in expenses: each Russian household spent an average of six percent more on meeting its needs last year.
But there is good news too.
Russia is part of a small club of countries with a predominance of exports, our trade balance is positive. The volume of imports over the past year, although it grew by 30 billion dollars, is still 180 billion less than exports. The Prime Minister particularly emphasized the growth of trade turnover between Russia and the BRICS countries : over the past three years, it has grown two and a half times and today amounts to 294 billion dollars. As part of the turn to the East, our country redirected 70 percent of all export flows to Asia , which allowed us to earn 306 billion. Sales to Asia-Pacific countries increased by five percent, but in fairness it must be said that the counterflow of Asian goods grew by 29 percent (to 187 billion dollars).
At the same time, there is a positive trend in trade with Africa : in just one year, exports to the countries of the Black Continent have almost doubled and exceeded 21 billion. But trade with the American states has collapsed.
One undoubtedly positive aspect to note is the fact that domestic consumption in Russia has skyrocketed (from three to 69 percent), meaning that ordinary Russians and companies are increasingly buying products produced within our geographic and economic boundaries.
Among the difficulties that our economy will have to overcome, first of all, it is necessary to note the need to move away from the export of hydrocarbon fuel and the sale of basic raw materials. Literally a couple of days before the start of the forum , Vladimir Putin scolded timber industry workers for exporting ordinary timber, and buying back finished products at two to three times the price, that is, thereby not bringing profit to our state and saturating the economies of countries that are not always friendly to us.
The main groups of export goods are gradually changing, and the share of the fuel and energy complex in the structure is decreasing.
Most of all, mineral products were sold, including gasoline and diesel. The direction brought 260 billion dollars to the treasury, and this is despite the fact that the volume of gas sales decreased by a quarter, and the average cost decreased by a third. In the overall balance, the products of our fuel and energy complex occupied 61 percent, which is a third less than a year earlier.
Further on, in dotted lines: export of metals and semi-finished products – 70 billion, 16 percent of exports (minus 15 percent); food and agricultural products – 43 billion, ten percent of exports (plus four percent); chemical industry – 27 billion, six percent (minus 35); mechanical engineering, electrical equipment and transport – 23 billion, five percent (minus 25); timber and pulp and paper products – ten billion, two percent (minus 30). And so on.
Actually, all the numbers are on the board. Mikhail Mishustin especially emphasized that exports will grow only if Russian goods and services are competitive, which requires deep scientific and technological involvement. For this purpose, the state is already allocating and is ready to allocate budget financing in the future and expand the system of benefits.
In conclusion, we will say that limping exports are a blow to the economy in the form of colossal lost profits. It is gratifying to see that the sanction meanness was able to make a breach, but could not sink the aircraft carrier called "Russia", which continues to stubbornly follow its historical route in spite of all the nastiness.
https://ria.ru/20241015/rossiya-1978025929.html
flamming_python likes this post
Arrow- Posts : 3415
Points : 3405
Join date : 2012-02-12
- Post n°517
Re: Russia and economic war by the west #3
owais.usmani likes this post
caveat emptor- Posts : 1997
Points : 1999
Join date : 2022-02-02
Location : Murrica
- Post n°518
Re: Russia and economic war by the west #3
Compared with some other developing economies such as Mexico (2006-$270.93B --> 2023-$647.64B) , Brazil (2006-$159.21B -->2023-$393.66B),
Turkey (2006-$124.76B -->2023-$357.55B), Thailand (2006-$152.29B --> 2023-$337.01B) Romania (2006-$30.23B --> 2023-$137.34B) or
Poland (2006-$130.34B --> 2023 $469.01B) whose exports had doubled, tripled or quadrupled during same period of time, Russian exports stagnated, especially when we consider dollar inflation during last 15+ years.
Hopefully, this war and sanctions will, finally, make them do something about it. Considering their economic potential, there's no objective reason exports shouldn't be in the range of 8-900 billion USD.
Russia:
2023 $466.60B; 2022 $635.07B; 2021 $548.80B; 2020 $381.07B; 2019 $481.41B; 2018 $510.35B; 2017 $410.72B; 2016 $330.11B; 2015 $391.37B; 2014 $558.28B;
2013 $592.50B; 2012 $594.19B; 2011 $573.99B; 2010 $445.51B; 2009 $341.58B; 2008 $520.00B; 2007 $392.04B; 2006 $333.91B
flamming_python and GunshipDemocracy like this post
lancelot- Posts : 3123
Points : 3119
Join date : 2020-10-18
- Post n°519
Re: Russia and economic war by the west #3
In a lot of cases (Mexico, Poland, Romania) those countries are importing components, to do final assembly, for exporting elsewhere.
Their work has low value added, which is why they have a negative balance of trade.
LMFS and Broski like this post
caveat emptor- Posts : 1997
Points : 1999
Join date : 2022-02-02
Location : Murrica
- Post n°520
Re: Russia and economic war by the west #3
Russia, with all its natural riches and intellectual potential should have much higher and more complex exports.
In the last 20 years, with normalization of oil and gas production and export they were affected with Dutch disease and not much progress was made in reindustrialization of the country. Oligarchs exported profits gained by commodity exports, government kept huge, unnecessarily large, foreign reserves and overall investments were very low. It seems like elites were satisfied with a role of a country as a provider of raw materials to the rest of the world.
Now, with sanctions and their ass against the wall, i hope that finally they will start to develop in the right direction and toward industrialization. There's no valid reason why their exports shouldn't double from here.
As for your comment about trade deficit, it is well researched that without widening of trade balance as a per cent of GDP, higher amounts of trade are very beneficial to economy of any country, since higher goods and services exchange brings higher employment amd more money to the government via taxation. But, as i said, this is not what my initial comment was about.
GunshipDemocracy and Broski like this post
lancelot- Posts : 3123
Points : 3119
Join date : 2020-10-18
- Post n°521
Re: Russia and economic war by the west #3
sepheronx likes this post
caveat emptor- Posts : 1997
Points : 1999
Join date : 2022-02-02
Location : Murrica
- Post n°522
Re: Russia and economic war by the west #3
as % of GDP
2023 $49.41B 6.09%
2022 $12.24B 1.78%
2021 $22.60B 3.32%
2020 $33.91B 5.66%
2019 $22.07B 3.70%
2018 $12.04B 2.05%
2017 $14.85B 2.83%
2016 $14.09B 3.00%
2015 $9.93B 2.08%
2014 $2.20B 0.41%
2013 $6.10B 1.18%
2012 $-3.52B -0.71%
Russian exports are still overwhelmingly made of raw materials and commodities. They did boost up agricultural exports in the last 10 years, but these still count toward commodity exports. Certainly, it is a positive thing.
Again, considering their potential and with proper investment policies, they should be able to double their exports (especially service component is weak).
Accounting for USD inflation their exports still run well below beginning of 2010's (peak of commodity supercycle and their oil production).
In plain terms, oligarchs were taking money out and gov wasn't interested in serious investment in industry and economy overall. That started to change post 2014, but on a limited scale. Looks like they finally started seriously in the last few years. Results will be only seen in next several years.
Reserves are fine, but they overdid it and now half are frozen, ie. they can't be used, and they are still doing ok. They could still have sizable reserves with much higher investment in economy before the sanctions. This is mentioned many times in this place, so there's no reason to go back to it.
GunshipDemocracy likes this post
lancelot- Posts : 3123
Points : 3119
Join date : 2020-10-18
- Post n°523
Re: Russia and economic war by the west #3
They can just arrest Western assets in Russia which are worth more than those reserves.caveat emptor wrote:Reserves are fine, but they overdid it and now half are frozen, ie. they can't be used, and they are still doing ok. They could still have sizable reserves with much higher investment in economy before the sanctions. This is mentioned many times in this place, so there's no reason to go back to it.
sepheronx and flamming_python like this post
lyle6- Posts : 2550
Points : 2544
Join date : 2020-09-14
Location : Philippines
- Post n°524
Re: Russia and economic war by the west #3
Russia's finest brains go to work on designing state of the art weapons suites, both physical, and financial.
Poland's finest brains go to work producing vidya.
flamming_python- Posts : 9516
Points : 9574
Join date : 2012-01-30
- Post n°525
Re: Russia and economic war by the west #3
lyle6 wrote:Germany's doohickey supplier is not a model economy by any means.
Russia's finest brains go to work on designing state of the art weapons suites, both physical, and financial.
Poland's finest brains go to work producing vidya.
Na, the finest brains of both countries still go abroad
But in Russia's case, it has the chance to change that, if it plays the next 5-10 years right and keeps investing into its own capacities and industries.
par far and GunshipDemocracy like this post