Russian Economy General News: #1

Opinion: Next world economic recession to happen in 2018-2019

Russia's Deputy Economic Development Minister Andrei Klepach believes that the world's next economic recession might happen in 2018-2019.

“We should not forget that economic development is wave-like. It has to be taken into account, so the next major cyclic slump should be expected in 2018-2019 and around 2028, with a high degree of probability,” Klepach said at a session of the presidium of the Russian Academy of Sciences on Tuesday. “We have to be ready for it and keep it in mind that such a crisis always shows what the economy is worth.”

In his opinion, Russia should not hope for high economic growth rates in 2014 and 2015.

“Our objective is to expedite economic growth rates. As the situation develops, Russia will not have high economic growth in 2014-2015,” Klepach said. “The years 2016-2020 are actually the time when it will be possible to achieve considerable economic upturn, otherwise we'll be unable to resolve the task of restructuring our transport, health care and education.”

MEP: Russia can take first place in the world in oil reserves

Russia can come out on top in the world in oil reserves in case of confirmation of the state balance of unconventional oil (Bazhenov Formation), told reporters, Minister of Natural Resources and Environment Sergey Donskoy.


Even on the basis only of stocks Bazhen 30-40 billion tons we can become leaders in the reserves," - he said.
Taking into account other unconventional oil reserves of their size can be even greater, added Don.


Don also said that in 2013, oil reserves in Russia by Category ABC1 increased by 688.34 million tons, gas - 1 trillion cubic meters.

As reported by ITAR-TASS, in 2013 in Russia was opened 23 oil, 2 oil and gas and one oil and gas field. On the continental shelf exploration work carried out on 22 sites, 7 sites work completed. It has been revealed 99 prospective sites.


According to CDU TEK, in 2013, oil production in Russia amounted to 523.275 million tons, gas - 668 billion cubic meters.


As reported by ITAR-TASS, 2015 Rosnedra begin work on the calculation of reserves of unconventional hydrocarbons. According to Natural Resources Minister Sergei Donskoi, stock assessment work will take a long time, considering geography studies, but this year will be prepared by the method of assessment of the resource base of unconventional sources.
The minister added that the inclusion of stocks must go through a public-private partnership, and without state aid this task can hardly be realized.


According to preliminary data, the cost of inventory valuation may be several billion rubles annually. In the current year for this purpose may be sent up to 1.5 billion rubles.


Don also said that in his opinion, and the opinion of the scientific community, it is advisable to create a center for the study of unconventional hydrocarbon based Rosgeologiya.


Besides, the minister said that Russia definitely needs the experience of foreign companies developing innovative technologies for hydrocarbon resources, but it must be adapted to the Russian geology, as these stocks in different regions of the world are located in different geological formations and structures.

So the official estimate just for Bazhen ( Shale Oil ) is 30-40 billion ton , which is equivalent  210-280 bboe  

Compares well with the Entire Saudi Reserves of 268 billion barrel


Just a single site having Oil as much as Saudi as an entire state has and we know that Saudi reserves are highly exaggerated


If Russia never had nuclear weapons it would have been invaded by NATO/US by now just for its resources  

Some notes on Saudi Oil , supports Wikileaks figures

Dealing with the Saudis is still challenging

Now Russia just needs to keep on finding customers for the oil, give decent discounts to make others happy, and seek foreign investors in the oil fields so that everyone is happy and Russia is rolling in cash. They should ad least subsidize the citizens with oil money as well like they do in Norway. So that Russian citizens will use the money to buy other goods and invest as well.

For better or worse Russia can't really increase the earnings from hydrocarbons substantially. The continuous economic slowdown and the return of Iran along with the sail gas and the environmental regulations in Europe and elsewhere and soon even in China against hydrocarbons don't let a lot of space.
Demand  the next decade will rise especially because of new demand from India and China but taking into account higher extraction costs, and the stronger competition which will stabilize the price, don't expect any miracles. The maximum level of economic development due to hydrocarbons is not yet reached by Russia but we are certainly heading there.

The problem is, Russia is simply too big and too large to prosper relying on hydrocarbons the same way like Greece is too big and too large to prosper relying into tourism.

But it isnt relying on it. Its simply a lot easier to get most out of it economically than nearly anything else. Im just saying seek more foreign imvestors in that field because they would be more inclined to invest if they are invovled. And it would no more be a strategic asset compares to other areas of oil extractio.

They could also become kings of composite material development.

Next stop, their IT sector. More video game producers from Russia please. Im serious too. Since they are third in terms of software development, and the fact some fun games have come from their, I am surprised more are not joining in. Microsoft already has development in Russia. Why not make games for PC and Xbox? With so many good books and storiea, they could do well.

Future is in green technology, that you will not depend on oil and gas and Russia have great options here.

Interesting Interview on where we are headed , Hannibal and others your views ?


Is the Fed a Perpetual Bubble-Maker? David Stockman discusses

http://rt.com/shows/boom-bust/financial-system-bubble-maker-676/

medo wrote:Future is in green technology, that you will not depend on oil and gas and Russia have great options here.

Yeah, Russia has lots of huge rivers just waiting to be damed. Also I read about escaping methane from the ground in Siberia, tapping into large pockets of those would imperative since it is literally money escaping into the atmosphere. Also geothermals in the far east. Wind power could come from the arctic coasts.
Apart from making itself the energy supplier of asia- russia should strive to become its main transport hub with the rest of the world too.

Austin wrote:Interesting Interview on where we are headed , Hannibal and others your views ?


Is the Fed a Perpetual Bubble-Maker? David Stockman discusses

http://rt.com/shows/boom-bust/financial-system-bubble-maker-676/

Yeah Austin.
The problem the US government has is that due to economic slowdown and persistent huge deficits has limited resources.
The Fed has two targets
a) to hide this fact
b) to find a way to distribute this limited sources the best possible way to minimize the effects of the problem
The way to minimize (b) is by giving priority to the big boys. To the strategic sectors etc and in the same time lowering the standards of the low end.
Don't let them unemployed cause this is dangerous for your social stability (like what is happening now in Greece or in Ukraine) but lower their true income.
Long story short:
1) Fed does create bubbles. Big ones actually. Don't know if this gonna burst, when and how nasty this can turn.
2) Fed, according to the plan, does increase the inequalities further (in contrary to the solution selected in Japan) but to this point doesn't seem to lead to any kind of turmoil. They seem to maintain enough social cohesion and just enough money to control the real dangerous consequences of unemployment, bankruptcies etc (with food stamps, federal incentives for employment, benefits, student loans etc)
Problems are:
-I don't see a way out of this death spiral
-The most secured way to fail in life is by standing still while others improving. For the big boss of the West, Americans, having a couple of lost decades is not an option, unlike Japan.
-You can't keep running deficits forever but if you start austerity you will have further slowdown, if you have slowdown you lose status if you lose status you lose credibility if you lose credibility you lose your ability to print money without consequences, if you have consequences you can't run deficits anymore. This is the extremely serious loop they are into. I wouldn't like to have to manage this shit, that's for sure.

Thanks Hannibal , Most people agree that US will never be able to pay its debt and it keeps spiraling .....no one knows how this will play out .....its goes against the fundamental of economics we know off so far.

Every one says this bubble wont last but no one knows when ......the Russian Minister yesterday said another recession is expected in 2018    probably we means every 10 years we go through this cycle.

US wont go into austerity as this is against their model something Europe has adopted ...... Russia AFAIK and something Putin mentioned go the middle way neither austerity neither QE  

Bad news for Russian Economy though

Sliding ruble to drag Russian economy into recession

Surplus of Russia’s foreign trade downs 7% in 2013 to $179 billion

Economy
February 20, 19:26 UTC+4
MOSCOW, February 20. /ITAR-TASS/. Surplus of Russia’s balance of trade amounted to $179 billion in 2013, which was $13.3 billion (6.9%) smaller than in 2012, the Russian State Statistics Service said on Thursday.

In 2013, Russia’s export went down by 0.9% to $523.3 billion, while the import grew by 2.6%, as compared to the preceding year, and reached $344.3 billion.

According to the Statistics Service, Russia’s foreign trade volume increased by 0.5% as against 2012 and stood at $867.6 billion.

We are in the middle of the fiercest economic war in history. All in all Russia's performance is acceptable. Let me rate:   

USA       7/10
China     9
Japan     6
India      7
Germany    8
Brazil       6
France     5
UK           5
Russia       7

The primary problem is that the whole concept of the stock market is flawed and results in repeatedly inflated prices for things not worth the money they get sold for till reality steps in and the price snaps back to what it should be.

It is a bubble machine...

Hannibal Barca wrote:We are in the middle of the fiercest economic war in history. All in all Russia's performance is acceptable. Let me rate:   

USA       7/10
China     9
Japan     6
India      7
Germany    8
Brazil       6
France     5
UK           5
Russia       7

I dont follow economies of other countries so I wont comment but on Russia and India

I would rate Russia 4/10 and India 4/10

Because the main reason of the crisis these countries are in is due to bad economic policies and lack of structural reforms.

I don't understand why you would rank countries with such high debts in your ranking so high.
The US and western world live in denial first stage of grief of their own collapse.

Why ranking them so high when it is evident that this amount of debts is bankrupting the entire nation, they can never be pay it back, only in case when they reduce military spending by 80% and we all know that will never happen, empires live from military occupation and constant conflicts and show offs.

Just rating a bad buisnessman above healthier and more flowering investment partnerships just because he makes 1000$ compared to his colleagues (400$) while he is spending 10.000$ each month doesn't make him anywhere a good investment or a good "economy".

This entire GDP per Capita nonsense is just a baseless figure, you can not pay your debts back that makes the entire  GDP worthless, regardless of how high or low it is, the only factor that plays a role for FED which owns USA is how much of this debt they gonna get back, but still are so greedy to sustain their status quo as the head of the US and its policy still pumping money out of nowhere into the systeme. He costs you more than he ever can make money eve a child can understand that he is a liability to you.

Countries like USA,Germany can never payback their debts even though there are larger illegal points in case of Germany such as pumping the cow because off WW2 while not a single generation is still alive who has ever suffered from it, but lets milk the cow untill several centuries pass.

It's like ranking people while others have only something like the cold and are getting better day by day, but you rate them because of their healthiness 4/10 and than you rate 7-8/10 people who are diagnost with cancer,untreated, in end stadium but you rate them higher because of a healthier look.

Austin wrote:

Hannibal Barca wrote:We are in the middle of the fiercest economic war in history. All in all Russia's performance is acceptable. Let me rate:   

USA       7/10
China     9
Japan     6
India      7
Germany    8
Brazil       6
France     5
UK           5
Russia       7

I dont follow economies of other countries so I wont comment but on Russia and India

I would rate Russia 4/10 and India 4/10

Because the main reason of the crisis these countries are in is due to bad economic policies and lack of structural reforms.

Such as? Russia had no choice but to clean up their banking system which will hurt them for quite some time, till other banks whom are keeping their licenses, start to help rather than not. As well, Russia state run corporations are still undergoing privatization with more to be privatized in the next couple of months, as well as many already have undergone modernization. Private enterprises are something else and technically, state cant just jump in and force change them. Some issues that were outlayed was that Russia did lose income from things like drop in energy export. Industrial made goods increased in export, but the money makers like energy had loss. What I dont get from many of you here, is none of you actually gave any ideas as to what they need to do. I cant think of much other than privatize more companies, try to create a better enviornment to start up companies in all sectors, and protect domestic manufacturing. The rest falls onto the common man. If they are not willing to support their country by purchasing goods, vacationing at home, and not using domestic banks, then no matter what the gov does, it wont save their economy and then people will cry later.

This whole economic system is more and more looking like a game that is now rigged. How can a country running a continuous deficite and printing more money than ever, not end up like Rhodesia and still have what they considsr a growth rate? May sound tinfoil hat crazy, but I truly think its some game. But it taught me something - dont rely on exporting. Rely on domestic consumption and protect your economy that way. May not make as much money, but will help keep the country strong and safe from outside fluctuations.

1 problem for Russia : Corruption.
A government that does what it wants with no judicial balance whatsoever.
Not even gonna talk about teh Duma lol.

TR1 wrote:1 problem for Russia : Corruption.
A government that does what it wants with no judicial balance whatsoever.
Not even gonna talk about teh Duma lol.

The one good thing about media is that it exposes a lot of the issues and is forcing the gov to make changes. If we didnt hear about $90B being lost due to black economy, I doubt they would be changing the banking system. But I dont get the sensation on blaming them that they are doing nothing though. I mean, technoparks, industrial parks and inograds do not build and fund themselves at first. But one thing that struck me odd was the push for 6T roubles for moscow expansion for the nxt 30 years. Why not the other areas whom need it much more. Moscow can easily fund itself. Same thing cannot be said about Vladovstok as example. The only city Kazan seems to be doing everything right. Their model is far better to emulate for rest of Russia.

The one good thing about media is that it exposes a lot of the issues and is forcing the gov to make changes. wrote:

If you are talking about 90% of medias you are dead wrong, they are all on governments payrolls and will not cover stories which a is not in the interest of a government or not in the interest of big companies who also own lot of news networks. The only rather reliable sources are independant news run by people who just want to inform people rather than carrying someones elses agenda just because he is the one who pays your salary.

Yeah Russian media sucks big time.

TR1 wrote:Yeah Russian media sucks big time.

How so? Interfax does not seem bad at all. Itar Tass seems good too. Whats bad about them?

Dollarization of the Russian economy falls, said Siluanov

Significantly weakened the ruble began in late 2013 - early 2014, which led to panic among the population, which actively began buying currency. Meanwhile, Russian officials and experts have repeatedly emphasized that the store and save money's worth in the currency in which to earn and spend, and games with the exchange rate, citizens can lose more savings than earn.


"We have reduced the level of dollarization of the economy. More and more domestic ruble is the currency and savings, and calculations. Share of foreign currency debt is very low," - said in a meeting with Siluanov investors.

Klepatch IEG has not yet yielded assess the contribution of OI 2014 GDP growth in Russia

The Bank of Russia in his report on monetary policy praised the contribution to GDP growth Olympiad 0.3 percent points.
"No, we did not do" - said Klepatch, adding that making such estimates, one must always take into account what would happen if these investments were directed to other purposes.


The total cost of preparing for the Olympics considering investments in the development of southern Russia is difficult to measure - they are around 1.3-1.5 trillion rubles, the deputy minister said. While it is not known how to use all the created infrastructure and consequently what effect it will give to the growth of GDP.


"But there is always an alternative - what would have happened if the money had been spent on agriculture, the development of high-tech industries and more. Usually this kind of assessment on the world Olympiads and the FIFA World Cup gives a negative net contribution" - said Klepatch.

Ulyukayev: in the Russian economy is no stagnation, according to the results in 2014 are expected to grow by 2.5%   

The minister believes that by European standards, this growth would have been very good, not less than the average

The Russian economy is no stagnation, according to the results in 2014 are expected to grow by 2.5%. At a press conference, said Economic Development Minister Alexei Ulyukayev.

You can not get out of that which is not, - said Ulyukayev, answering the question, the Russian economy will come out of stagnation. - There is slow growth." The minister believes that the European measures growth would be very nice, not below average.


"This year we expect a GDP growth of about 2.5%," - said Ulyukayev. Nevertheless, he admitted that at the moment we can not say that formed the growth trajectory.

Make a great listening for every one ...longish but worth it

David Stockman: The Great Deformation - May 29, 2013

Befenits of weaker rubble

Weak Ruble Could Push Russian Budget Into Surplus – Report