Russia and economic war by the west #2

"Torn to shreds" Russian economy shows impressive progress, by Irina Alksnis, columnist for RIA Novosti, 06.07.2023.

We have a fantastic set of trends: on the one hand, the Russian economy is demonstrating impressive success, on the other hand, a country that is once again involved in an existential conflict with the West is spending amazingly little effort and money on it.

The West as a whole has already realized that it did not work out with the “tearing to shreds” of the Russian economy (we do not take into account individual politicians who continue to carry ideologically verified nonsense to their fellow citizens). However, now he will have to move to a new stage of acceptance - the fact that the unprecedented severity of the sanctions regime not only did not harm, but benefited our country.

Of course, only a few dare to openly pronounce such an outrageous heresy, but the world's business media are increasingly writing about the impressive success of the Russian economy. Moreover, there is really something to write about. Statistics report that industrial production beats all records. The domestic industry successfully overcame both the covid crisis and last year's sanctions storm, and, characteristically, the manufacturing sector shows better results than the raw materials sector.

Reuters recently wrote about impressively optimistic trends in the Russian manufacturing sector : thirteen consecutive months of growth in business activity, a rapid increase in output and new orders, the fastest growth in employment in two decades. By the way, some experts, and not only foreign ones, also see problems in the latter: in April, the country recorded a historical minimum of unemployment - 3.3%, and this, they say, is not very good, since it indicates, among other things, an acute shortage of labor . Positive trends in the economy have a direct impact on society - after a rather long period of decline, real incomes of the population began to grow.

In general, Russia really has much to be proud of, especially given the circumstances in which the country demonstrates these achievements.

But perhaps the most interesting aspect both in the domestic economy and in our confrontation with the West was noted by The Economist, and they obviously did not understand what exactly the fact they published meant. The publication conducted a study, trying to estimate the financial costs of Russia for the NWO - and according to its calculations, we are talking about the amount of 67 billion dollars a year, which is about 3% of the national GDP. Another thing is even more important: The Economist directly wrote that this amount is scanty by historical standards, and gave an impressive example - during the Great Patriotic War, the Soviet Union spent 61% of GDP on military needs (and the United States, by the way, about 50%).

And here the main dog is buried. There is a difference between winning and winning, which many do not realize, but is extremely significant. The USSR became the winner in World War II, but it was not he who received the main prize in it. Moreover, our country paid such a huge price for this victory that some consequences - for example, demographic ones - are still reverberating. There is no need to talk about the economy: while the Soviet Union was restoring the country from the ruins with another mobilization spurt and withstanding the fiercest competitive race in key industries (like space or nuclear technology), our geopolitical opponents, who skimmed the fattest cream from winnings, had the opportunity to develop evenly in all spheres.

The result is known: by the 1980s, the gap in the level and quality of life of people in the USSR and in the West turned out to be simply blatant, which played a role in the fate of the Soviet Union. Of course, the Soviet government also contributed its insufficiently flexible hand to this result, but the main reasons for the abyss in the ways of life on both sides of the Iron Curtain are precisely in the results of the Second World War, which cost our country catastrophically.

But our ancestors had no choice - and here we must pay tribute to the evil genius of the collective West, which then, more than 80 years ago, was able to create conditions and impose on the Soviet Union a war of survival at an prohibitively high price.

And it is precisely in this that the modern West fails miserably before the eyes of the whole world, because in the current confrontation the Russian economy has been, is and will be its main goal. Which is absolutely logical: how to defeat a nuclear power that is capable of inflicting a military strike on you with guaranteed unacceptable damage? Economics is the obvious choice. In the best case, for the West, under sanctions, the Russian economy would simply collapse, burying the state under it. But in principle, he would be satisfied with a less radical option - for example, the transformation of Russia and its economy into a variation of North Korea, as a result of which Moscow's geopolitical influence and its participation in global processes would drastically decrease.

Instead, we have a fantastic set of trends: on the one hand, the Russian economy is demonstrating impressive success, on the other hand, the country is once again involved in an existential conflict with the West, spending some amazingly small forces and means on it, and on the third, an ordinary the life of Russian society has undergone minimal changes (with the exception, of course, of the border territories, which were under the terrorist attacks of Kiev).

And this, of course, is a huge failure of the West, threatening to become fatal for it. The fact that the Russians know how to fight is known and remembered by everyone who is supposed to. But historically, we often lost in the economy and simply in the sense of a prosperous routine, the quality of people's daily lives. So it is not surprising that the West again made a bet on this, which seemed like a win-win (stunt).

However, it turned out that Russia had learned to play this game too.

https://vz.ru/opinions/2023/6/7/1215161.html

flamming_python wrote:It's the carbs that those fries are made up of themselves that will kill you, not the fat

Russia is waiting for a new wave of privatization, by Olga Samofalova for VZGLYAD. 06.16.2023.

New privatization is demanded “not to squander state property for next to nothing”.

Russia is ripe for a new large-scale privatization of state assets. This opinion was supported by both the financial authorities and the main banks of the country. However, the strictest conditions are imposed on privatization so as not to repeat the situation with the loans-for-shares auctions of 1994. Why is it necessary to sell state property and what can go under the hammer?

The topic of state property privatization sparked a discussion at SPIEF. However, there was no heated argument: many officials support this idea.

Back in April, it was first put forward by the head of VTB Andrey Kostin. According to him, privatization and an increase in public debt can become sources of money that are needed to build a new model of the Russian economy. He believes that Russian business has already accumulated investment potential, there is money in the country to buy assets.

In May, the idea was supported by Deputy Finance Minister Alexei Moiseev. According to him, large-scale privatization in Russia should take place, but for this it is necessary to create a market. “There was a program article by Andrey Kostin, President and Chairman of the Board of VTB, where he proposed to return to this issue. In fact, no one is against it. The problem is that we first need to fulfill a number of instructions from the president on the formation of an internal investor,” Moiseev said.

On Thursday at SPIEF, the idea of ​​privatization was supported by the head of the Central Bank, Elvira Nabiullina. According to her, there are assets in the country that can be privatized without prejudice to strategic interests. In turn, presidential aide Maxim Oreshkin agreed that what is needed is not a large-scale privatization, but an exit from "inefficiently used assets by the state for the benefit and benefit of the state."

Press Secretary of the President of the Russian Federation Dmitry Peskov was also not against the launch of a new wave of large-scale privatization, but put forward a number of conditions. According to him, the privatization mechanism works well in most industries, but the main thing in this case is “not to squander state property for next to nothing.”

Secondly, privatization should increase the efficiency and profitability of enterprises, create new jobs and benefit the state, Peskov said.

Thirdly, "you need to understand who to sell to." “If you sell now, it will be like the story of 1994. These are loans-for-shares auctions, I think that's what they called it. But no one wants this, of course,” said Moiseev.
With the help of loans-for-shares auctions in the 1990s, 12 state-owned enterprises were sold for bank loans at low prices. It was then that the state shares of Yukos were sold to private hands. At that time, they managed to get quite a bit for state property - $ 900 million. For a deficit budget and an economy torn apart by inflation, this was not enough, and oil prices were then miserable. Therefore, in 1996, Russia was forced to get into serious debt bondage to the IMF. We were given a record amount of $10.1 billion in loans for those times. Fortunately, Russia was saved by its natural wealth, rising oil prices and export earnings, thanks to which it managed to pay off its debts and get rid of dependence on the West in record time.

Now the situation is seriously different from that era, so experts doubt that we should be afraid of repeating history with the privatization of the 1990s. Moreover, the authorities themselves warn about this.

“The negative experience of the state in the use of vouchers and loans-for-shares auctions will not allow repeating past mistakes in the application of dumping tools and bankruptcy procedures. It is these characteristics of the past privatization that have formed a clear negative attitude towards it, for which, of course, there is every reason,” says Marina Anokhina, Associate Professor of the Department of Corporate Governance and Innovation at the Russian University of Economics. Plekhanov.

“In order to prevent a repeat of 1994, the privatization procedure itself is extremely important: I think it is necessary to develop a reliable and transparent mechanism for its implementation,” says Artem Deev, head of the analytical department at AMarkets.

It is not yet clear what is planned to be privatized, so it is difficult to say how much will be received and what effect the economy will have. However, Natalya Milchakova, a leading analyst at Freedom Finance Global, names several companies whose privatization is likely to be expected by investors.

“The Russian stock market has been waiting for a long time for a minority stake in Russian Railways to enter the stock market. Also, investors would be warmly welcomed by the listing of shares of Rosspirtprom and Almazyuvelirexport. And the real "icing on the cake" could be the appearance on the stock exchange of ordinary shares of Transneft, since this company, which so far has only preferred shares on the stock market, has established itself as a state-owned company open to investors, capable and willing to pay high dividends,” says Milchakova.

According to her, the number of individual investors is rapidly growing on the Moscow Exchange, and it has already reached 26 million people, which is 16% of the Russian population. “Prospective and highly reliable investment ideas are very important for private investors. Therefore, the privatization of large enterprises with state capital, while maintaining, of course, state control over them, would be in great demand by investors,” Milchakova said.

Why would Russia need to sell state assets at all? First, the state does have a lot of assets. Secondly, not all of them are profitable. “Some state-owned companies operate at a loss or make almost no profit. If private capital is let in there and given to commercial structures for management, it will breathe new opportunities into such companies. Definitely, this will accelerate the inflow of investments,” says Deev.

Thirdly, privatization can become a good additional source of budget revenues, which is experiencing difficulties due to sanctions.

Russia's oil and gas revenues logically declined. However, “nothing critical” is happening to budget revenues, Finance Minister Anton Siluanov said. The department, he said, expects to enter the federal budget revenue plan this year. It is planned to do this at the expense of additional taxes for business, in particular, the mineral extraction tax on oil. “In terms of taxing economic rent, this year we agreed with business that business will help in terms of its contribution to the overall situation, and adopted a tax on excess profits in the government,” says Siluanov.

So there is no need to rush headlong with privatization and carry it out right now. “So far, all statements are formulated rather vaguely, from which it can be assumed that the topic is only at the beginning of discussion, and privatization is still being considered in a targeted, rather than broad, mode,” says Olga Belenkaya, head of the macroeconomic analysis department at FG Finam.

According to her, privatization can not only replenish the budget, but also increase the share of private business in the economy and increase competition.

Another thing is that the state is unlikely to part with control over strategic assets, given the shift in focus to security, believes Belenkaya. The same head of the ICR, Bastrykin, spoke out, on the contrary, for the nationalization of the main sectors of the economy for the sake of economic security in a war.

https://vz.ru/economy/2023/6/16/1216787.html

privatization can not only replenish the budget

increase competition

Russia's Mir payment system 'already working' in Venezuela — President of Central Bank
Calixto Jose Ortega Sanchez also stressed that for his country it "doesn't matter" what the US and EU countries think about the financial cooperation between the Central Bank of Venezuela and the Bank of Russia and the Russian financial system

ST. PETERSBURG, June 15. /TASS/. Venezuela has already launched Russia’s Mir payment system, President of the country's Central Bank, Calixto Jose Ortega Sanchez, said on the sidelines of the St. Petersburg International Economic Forum (SPIEF).

"It is already working," he said, answering a question from a TASS correspondent.

He also stressed that for his country it "doesn't matter" what the US and EU countries think about the financial cooperation between the Central Bank of Venezuela and the Bank of Russia and the Russian financial system.

In September 2022, the US Department of the Treasury warned that the National System of Payment Cards [NSPC, the Mir payment system operator - TASS] and the Mir national payment system could be used to process transactions related to individuals or activities subject to sanctions. Non-U.S. financial institutions entering into new or expanded agreements with the NSPC risk supporting Russia's efforts to circumvent U.S. sanctions by expanding use of the Mir national payment system outside of Russia, the statement said.

About Mir payment system

The first countries whose banks began to accept Mir cards were Belarus and Kazakhstan in 2018. At the moment, the Mir payment system operates in about 10 countries, and more than 15 states have expressed their readiness to introduce it.

Venezuela was not the first Latin American country to introduce the Russian Mir payment system. In March of this year, the Cuban Ministry of Tourism announced that Mir cards can already be used in Cuba to withdraw cash by converting rubles into Cuban pesos.