Russian Economy General News: #5

User78 on sdelanounas has a great post with links, graphs and data: http://sdelanounas.ru/discussions/view/?id=955#120296

bmtppk wrote:Sorry guys  i was wrong in my previous threads i was bitching that russia doesnt have an economy and all russia does is export its natural resources and ''leases'' land to China to abuse it
well i lied Russia actually has another really cool import. Its so amazing no other country does that.

Each option is economically attractive for Russia since they all provide either income from provision of services or fuel for the future,


They take nuclear waste from all over the world and bury it in their homeland. Like iran for example is
equired to send the used fuel back to Russia. Russian law allows import of foreign used fuel for reprocessing and the return of wastes (as with reprocessing other countries' used fuel in France and Britain), and Russia's default position in supplying reactors to non nuclear weapons states is to take back Russian-origin fuel without requiring return of the wastes, as with Iran.
In 2001 the Russian parliament (Duma) passed legislation to allow the import of spent nuclear fuel.

http://www.world-nuclear.org/info/Nuclear-Fuel-Cycle/Nuclear-Wastes/International-Nuclear-Waste-Disposal-Concepts/

its great

Your own link ...

Russian plans 2001-06

In 2001 the Russian parliament (Duma) passed legislation to allow the import of spent nuclear fuel. The President signed this into law and set up a special commission to approve and oversee such imports. The commission would have 20 members, five each from the Duma, the Council (upper house), the government and presidential nominees. It would be chaired by Dr Zhores Alferoy, a parliamentarian who is also Vice President of the Russian Academy of Sciences and a Nobel Prize physicist.

In 2003 Krasnokamensk was suggested as the site for a major spent fuel repository - it is a city 7000 km east of Moscow in the Chita region and is a centre for uranium mining and milling, the mines being run by the Priargunsky Combine.

This scheme was progressed in 2005 when the Duma ratified the Vienna Convention on civil liability for nuclear damage. However in July 2006 Rosatom announced it would not proceed with taking any foreign-origin used fuel.

See syka, you're still lazy. Can't even finish a phrase, dat US capitalism didn't help much boyo. Now Fuck off.

Austin wrote:How can Russia change the structure of present Economy for increasing growth to 4 % ?

So it seems Russia in long term will spend 7 % of GDP on Defence  ?

If they cannot increase tax on business then a combination of increasing in Debt/Deficit and some reduction on spending must be sought to balance out , Ofcourse kensian would say just keep increasing Debt till its 100 % and beyond

They will simply have to be more efficient on collecting. There's at least 100 billions due to the state that are traveling around the world, if you can recoup at least 50 it would be great. They will also have to tax harder the middle class so they can also tax the higher income folks and the businesses. Very stupid way of doeing things but hey...

zg18 wrote:

Karl Haushofer wrote:It is good to hear that things are still going well (or even improving) in Moscow but what about the other parts of the country? St.Petersburgh, Kazan, Rostov-on-don, Novosibirsk, Yekaterinburg, Omsk, Vladivostok, Samara etc.?

If you are interested  , i strongly recommend Russian section of Skyscrapercity.forum

http://www.skyscrapercity.com/forumdisplay.php?f=345

Lot of construction going on across the country.

Lots of exciting building going on in Russia, even if the global credit crunch delayed some.
St P has Europe's tallest skyscraper being built. Many beautiful world cup football stadia being built. Moscow has a vast number of projects including Moscow City skyscraper district, and after that the Moscow City 2.

Perhaps the most exciting one potenitally will be the new Parliament in Moscow at a price of 1.5bn USD equiv.  I'd like to see an ornate Neo Pre-Petrine style building that yells "Russia". A modernised version of the Izmailovo buildings, something like that. The shortlisted candidate was a Neo Classical building that looked a little too like America's Capitol. Judges said it looked a little "cold". So the competition has been reopened again.

GarryB wrote:Could be an agent... that might explain his motivation.

I mean I don't know about you but I get precious little free time these days... I certainly would not waste the time I have going to places like F16.net and pissing off the natives, but then knowing the western economies these days this guy might just be a pissed off unemployed guy who watches CNN and thinks his life might be crap but at least it is worse in Russia.

Comes to this site and hears it might not be as bad and CNN claims and has to respond.

....so agent or dick.  

............  

I am honestly amazed that obscure little forum like this one buried in the forgotten corner of the internet can attract so much attention worldwide...

Is it possible that people actually read the stuff we post here?

More updated data from IMF on 2015 GDP PPP

http://knoema.com/nwnfkne/world-gdp-ranking-2015-data-and-charts

2020 Projection from IMF dont look great

http://knoema.com/tbocwag/gdp-by-country-1980-2014#Russia

All these "projections" are just attempts at forseeing the future and they get adjusted all the time. I'll give you an example: oil price. When oil started growing couple of months ago it went against every projection of the IMF, World Bank, Moody's, Standard and Poors and all the other major institutions. So they were forced to readjust their "projections". Now oil price is down again and guess what they did, they re-adjusted their projections. The same shenanigans happened with projection of Russia's economy at the beginning of this year. From terrible to less terrible, from less terrible to good and etc.

All I can say is to take it all with a grain of salt and wait for September 15th 2015. (or a few days before or after that date).

Austin wrote:More updated data from IMF on 2015 GDP PPP

http://knoema.com/nwnfkne/world-gdp-ranking-2015-data-and-charts

2020 Projection from IMF dont look great

http://knoema.com/tbocwag/gdp-by-country-1980-2014#Russia

GDP at current US$, int.$ and Real GDP growth

Why not post PPP rates, since now with sanctions and what not, it forces import substitution and FOREX means nothing at that point.

Edit:  User78 also has posted about car production (mostly train) compared to USSR time to now.
http://sdelanounas.ru/discussions/view/?id=955#120435

Seems Russia produces much more automotives and locomotives during Putin era than during USSR era.

bmtppk wrote:Sorry guys  i was wrong in my previous threads i was bitching that russia doesnt have an economy and all russia does is export its natural resources and ''leases'' land to China to abuse it
well i lied Russia actually has another really cool import. Its so amazing no other country does that.

Each option is economically attractive for Russia since they all provide either income from provision of services or fuel for the future,


They take nuclear waste from all over the world and bury it in their homeland. Like iran for example is
equired to send the used fuel back to Russia. Russian law allows import of foreign used fuel for reprocessing and the return of wastes (as with reprocessing other countries' used fuel in France and Britain), and Russia's default position in supplying reactors to non nuclear weapons states is to take back Russian-origin fuel without requiring return of the wastes, as with Iran.
In 2001 the Russian parliament (Duma) passed legislation to allow the import of spent nuclear fuel.

http://www.world-nuclear.org/info/Nuclear-Fuel-Cycle/Nuclear-Wastes/International-Nuclear-Waste-Disposal-Concepts/

its great

Probably You just came from a cave now.. since soviet times and for first time have internet
and the first thing you did was post in this forums.  But for your information..Russia export of energy only represents about ~17% of Russia economy.. So were is the other money Russia make ?   If it is only a Gas Station as western propaganda claims?  

Russia have an local economy..and agriculture economy too ,one of the biggest exporters of Wheat in the world.. even more than United States , Biggest Producer of Diamonds ,Gold and exporters of Timber..Biggest exporters of Uranium too..Steel and Iron.. Russia have everything
any nation industry needs to become modern.. United States for example do not have Titanium and buys it from Russia..      Russia is the major exporter in world ,not only in Energy but also Materials for technology and development of any nation.. And Russia also produce internally have all the basic food and fresh water it needs .. Americans for example needs Oil from Venezuela and Uranium and Titanium and Diamonds from RUssia.

This means that Russia is even more prepared that USA ,to survive a world economic collapse
and or a major world war..  it means that Russia could survive a world wide blockade of trade if that was possible of the entire territory in a war..  With such big continent called Russia.. that have close to ~4x times the size of main land USA.. Russia is barely scratching the surface
of all the resources they have...since the vast majority of its territory have never been researched for minerals or energy ..or used for agriculture. Russia like another article i read..could feed all Asia with the territory they have ,if their agriculture was that developed.. why Russia now investing in agriculture heavily.. to diversify more its economy..  

Russia space industry ,have nothing to envy the western one.. is the world Best.Russia defense
Industry. World Best.. Produce the best tanks ,best planes ,best missiles. and Russia Business and social technology industry while is small in comparison with the west.. it can produce anything that they need.



So yes is all great.. Russia is the only truly capable nation in the world ,to become fully self
sufficient..  and produce ANY THING internally ,and need nothing from the outside world..

And the Future of Energy is Nuclear energy.. it will become safer and clean the whole process... Russia is developing Nuclear reactors that can use what you call "nuclear waste" and
re-use it as energy.. So yeah.. its Great !!  that Russia will be able to have unlimited free energy ,with unlimited healthy food ,all the Oil and Gas it needs for today and all nuclear energy too and unlimited resources and rare materials for technology ,major gold ,steel ,iron ,diamonds producer ,all the fresh water ,all food its needs with its import substitution program ,that is all the things its needs for a modern highly developed nation ,in a clean environment ,while Trolls like will be suffering for high energy prices ,eating Genetic modified crap .suffering of illness ,and depending on medication to fix your health. And this is not mentioning the Living in a highly repressive police state , where migrants from third world nations ,will become a majority..Making sure your life will be very sweet and wonderful..

Russia’s import substitution policy to take years to bring noticeable results

If moody's thought differently, then they are indeed idiots.

sepheronx wrote:

Austin wrote:More updated data from IMF on 2015 GDP PPP

http://knoema.com/nwnfkne/world-gdp-ranking-2015-data-and-charts

2020 Projection from IMF dont look great

http://knoema.com/tbocwag/gdp-by-country-1980-2014#Russia

GDP at current US$, int.$ and Real GDP growth

Why not post PPP rates, since now with sanctions and what not, it forces import substitution and FOREX means nothing at that point.

Edit:  User78 also has posted about car production (mostly train) compared to USSR time to now.
http://sdelanounas.ru/discussions/view/?id=955#120435

Seems Russia produces much more automotives and locomotives during Putin era than during USSR era.

It's a liberast, NATO-approved trope that things were all around better under Yeltsin. Total, ludicrous lies designed
to push their anti-Russian agenda.

Good Read

Russia's Second Quarter Contraction Is No Big Deal

@serephonx, austin: My opinion is that Russian economy is really suffered a decline, about 5% decrease this year, but not because of sanction or other sh*t of Western propaganda. It is because EU/U.S. economy is exhausting and has no money buy Russian goods anymore, and because the current reform/change of Russian economic structure.

Russia is the main supplier of high-tech goods and luxuries to EU and U.S., like titanium products, space rockets, oil drilling technologies, super high grade cereal grain, vodka, rod cheese... But at the moment, EU/US economic is in bad shape. Consumption is affected, and Russian business affairs in EU is also affected.

Russia actually makes use of the sanction to give up foreign luxurious, and ram up domestic production to replace these products. Russia kicks the **s of EU dairy products. GM ran away from Russia. Russians stopped travelling to Western countries, boost up domestic tourism. Meanwhile, Russia also takes a look at rising BRICS allies like China, India, and started to increase the amount of business affairs with BRICS friends.

All of that caused temporal disruption in Russian economy and lead to a temporal decline of GDP. But in long term it will boost the domestic production and capability of Russia.

In other words, 5% decline this year is the offering for the deceased old friend EU, before Russia turn its eyes to the growing BRICS.

Austin wrote:Good Read

Russia's Second Quarter Contraction Is No Big Deal

After reading that, I get the perception that the main aim of Russian government and CBR is to reduce overall interest rates and keep it low to help people have more disposable income.  If the oppositions and social services of Russia get their way, Russia may see an increase in minimum wage by 11% of what it currently is.  Quite a jump really, that would help people on the lower spectrum out greatly (as long as products don't instantly jump).

One growing issue is the Russian railways.  While they are indeed still purchasing locomtives (had to look it up cause some news mentioned in that crappy article in the Army thread by our vietnamese friend (for joking purposes, so don't blame him) tried to use Uralvagonzavod in an attempt to look like it was losing money and wont make tanks, and it is losing out on the railcar sales, when I read this: http://uralvagonzavod.com/news/87/ and http://uralvagonzavod.com/news/86/, but that is export), RDZ had to make quite the cutbacks in purchasing railway carts.  So what was initially orders for close to upwards 400 or more locomotives, it may be in the upper 200's, back to the 2010 year.  So some locomotive and cart companies are cutting back development and manpower, also trying to seek further exports (hard when you got a dozen companies competing for the same thing in Russia).  So there needs to have something done.  Maybe create an alternative railway company as competition to RDZ and have new rail lines going to more places.  I know that there are various northern locations pretty much untapped by railway and rely entirely on airplane transport - Norlisk I believe is one of them.  So having a rail line going through up to those places, added in newer locomotives that can handle the weather, would create jobs and demand.  Also, apparently Crimea has placed with RDZ a contract for rental of locomotives.  The locomotive and construction equipment industries are huge employers and money makers, so that is also another field facing issues (not nearly the same issues as in the past, as I have provided information showing that they ordered in the 90's single digit orders of locomotives, compared to now where it is the 3 digit columns).

higurashihougi wrote:@serephonx, austin: My opinion is that Russian economy is really suffered a decline, about 5% decrease this year, but not because of sanction or other sh*t of Western propaganda. It is because EU/U.S. economy is exhausting and has no money buy Russian goods anymore, and because the current reform/change of Russian economic structure.

Russia is the main supplier of high-tech goods and luxuries to EU and U.S., like titanium products, space rockets, oil drilling technologies, super high grade cereal grain, vodka, rod cheese... But at the moment, EU/US economic is in bad shape. Consumption is affected, and Russian business affairs in EU is also affected.

Russia actually makes use of the sanction to give up foreign luxurious, and ram up domestic production to replace these products. Russia kicks the **s of EU dairy products. GM ran away from Russia. Russians stopped travelling to Western countries, boost up domestic tourism. Meanwhile, Russia also takes a look at rising BRICS allies like China, India, and started to increase the amount of business affairs with BRICS friends.

All of that caused temporal disruption in Russian economy and lead to a temporal decline of GDP. But in long term it will boost the domestic production and capability of Russia.

In other words, 5% decline this year is the offering for the deceased old friend EU, before Russia turn its eyes to the growing BRICS.

So far, the calculations is going to be around 3% decline.  I believe it is World Bank, IMF and Moddy's that predict this.  They may not be 100% straight up on nearly anything, but when it comes to giving bad news, they are pretty accurate.

That said, re-orientating ones economy is always hard, always painful, and quite damaging.  But, it is needed.  Countries survived for hundreds, if not thousands of years through various economic structures and through good and bad times.  That wont change.  But Russia taking the hit now, just means that things will end up getting better in the end sooner than later.  Hopefully (as long as people keep moving forward and continue to believe in themselves and their country).  Russia would have to create domestic demand, and will have to expand itself.  One way is its piss poor soviet infrastructure.  While they have a good railway lines, they need to expand.  Many areas untouched.  Especially north (mining is growing in Russia, so they need more railways up in the northern mining districts).  But of course, the government makes cutbacks, thus such projects wont come to fruitation in years and they create their own stagnation.

Russia relies too much on exports in terms of looking for growth.  At least right now.  I have a feeling that they are moving to more domestic oriented economy as now Asia is facing major issues too, so they have no one else to turn to, besides themselves and developing nations in Africa and certain parts of Asia.  We will be seeing in the coming decade(s) that what was Russia's traditional economic power, will be changed.  I think it will be more agriculture, heavy industry and services.  Things like oil, gas and mining will continue to be major exporters, and along with certain other goods.  But wont be dominant since majority of the other countries in the world are trying to domesticate production of their own, and that will lead to further issues in the future for exporters of heavy equipment (China included).  So it would be in Russia's best interest, and the major companies, to start opening up parts production in other, growing countries, to be able to secure a position in those other countries.  But, due to old soviet mindset, many of these businesses don't do that with some recent exceptions (rostselsmash and Avtovaz in Egypt).

The Kremlin recognized the impossibility of supporting the ruble
http://lenta.ru/news/2015/08/17/ruble/

The current volume of foreign exchange reserves Russia does not allow to maintain the ruble exchange rate, the only lever of influence remains the key rate of the Central Bank. On this, as reported by RIA Novosti , he said on Monday, August 17, the Russian presidential aide Andrei Belousov.

Currently, reminded Belousov, the ruble remains floating. "And now we do not have the foreign exchange reserves or foreign exchange reserves, which we can use to support the ruble in 2013," - he said.

Assistant to the President explained that the volume of the Central Bank reserves, excluding gold now stands at a little over $ 300 billion. "But of the $ 300 billion more than 120 billion accounted for stocks of government - it is the Reserve Fund and National Welfare Fund, which is stored in the form of currency", - said Belousov.

The rest of the reserves will last for nine months of merchandise imports, which, according to Belousov, is considered the minimum bar. "So when [the head of the Central Bank of Elvira] Nabiullina said that the Central Bank will replenish the reserves - it was justifiable claims related to their condition, which can evaluate any investor," - he added.

Beloussov also expressed the view that the key rate of the Central Bank of the Russian Federation, which now amounts to 11 per cent in the medium term may be close to the inflation target of 4 per cent, but in the case of another fall in oil prices such a scenario is unlikely. At the same time he found it difficult to name another term reduction of the key rate: "As soon as that happens, with some variations - we can not say today."

It seems out of ~ $ 350 billion dollar reserves , $50 billion is in Gold

$120 billion is National Welfare and Reserve Fund

So essentially CBR has $230 billion in Reserves to defend the Rouble and Import

I always thought NWF and RF fund were seperate from Forex figure that CBR puts up , now this makes it clear

Russia to prioritize the development of its Far East

Amid multi-billion dollar energy deals with China and worsening relations with Western countries, Russia is in the midst of attempting a massive reorientation of its foreign policy known as the “pivot to Asia.” Yet the domestic leg of this platform is posing Russian policymakers a tremendous challenge: the development of Russia’s vast Far East, a landmass that is almost as big as the continental United States, but has a population roughly equal to that of Denmark.
Russian officials fret that if left undeveloped and unprotected, this enormous, region could be swallowed up by an influx of Chinese immigrants and capital. The Russian Far East, with only 6 million inhabitants, shares a long border with China’s Heilongjiang province, which has a population of 40 million.
As a result, Russian officials have whipped up a plan to spur the region’s development by funneling a targeted 3.5 trillion rubles ($53 billion) to the Far East, with a goal to bring in 80 percent of that figure from private investors and companies through specially-targeted incentives.
The policy, ultimately, must be a balancing act for Russia: to use the Far East’s proximity to rising Asian markets as a means of attracting investors, while not allowing the region to be overrun by the expanding power of Pacific-Rim nations.
“Financial flows are gradually moving away from the EU and the United States and closer to the Asia-Pacific, since this region has all the required resources with next to no administrative barriers and is developing stronger trade ties with Russia, which is of immense importance for the domestic investors,” said Anton Soroko, an analyst with Moscow’s Finam investment company.
Dmitry Bedenkov, chief analyst at Russ-Invest investment company, characterized the Russian development plan as both aggressive and achievable.
“Such ambitious plans of attracting private investment seem justified, given the serious prospects the region shows,” Bedenkov said.
The government aims to raise 64 billion rubles ($977 million) of investment in 2015, and 243 billion rubles ($3.71 billion) by 2016.


- http://asia.rbth.com/business/2015/08/19/russia_to_prioritize_the_development_of_its_far_east_48583.html)

Austin wrote:It seems out of ~ $ 350 billion dollar reserves , $50 billion is in Gold

$120 billion is National Welfare and Reserve Fund

So essentially CBR has $230 billion in Reserves to defend the Rouble and Import

I always thought NWF and RF fund were seperate from Forex figure that CBR puts up , now this makes it clear

That is what I thought too.

Anyway, I am kinda ho hum about it. Since rouble is free floating (supposed to be), they shouldnt be defending it. But as some people said on RIA,ru's comment section, they need to get off of USD as a reserve currency and that they should purchase roubles (as that once they sell USD to purchase tons of roubles, the roubles value would increase, thus they can purchase other currencies again to "earn" more. Becomes a gamble though).

The purpose of the reserve fund should be for pure investment purposes. Use it to invest in key infrastructure and industries they know that there will be returns on. Agriculture as example. Plastics is another one, etc etc. Rather than sitting on it.

While they did deplete a good $150B of the reserve funds at beginning of crisis before floating rouble, they still have one of the biggest reserve funds in the world. No point of having it if you cannot use it. But they may be seeing it as a method of last resort. While they will hold it, they may be looking to increase it again (which they done off and on) through more gold purchases. Recently I read that they purchased more US bonds, something like $75B worth. I think it was a stupid move since USD is predicted to crash in sept when US increase interest rates.

So like the president aid said in future any rouble weakening would only be addressed with increase interest rates as they dont have USD to defend it

Austin wrote:So like the president aid said in future any rouble weakening would only be addressed with increase interest rates as they dont have USD to defend it

He didnt say increase interest rates, but slowing down to stopping the interest rate drops they are applying.  They can provide tens of billions to finance the rouble but they wont, as they are holding onto this reserves for something else (dont know). But the interest rates will still drop as it has been evident to being one of the leading causes to the economic decline while currency valuation hasnt played as much as a key roll.

If you can quote where he said they would raise it, please do so. Cause I have sources (one that George added here) that says otherwise.

Essentially, they are going to let the rouble drop. At least till they replenish the reserves.

Then there is this: http://tass.ru/en/economy/815026

They could sell it off to pay for lots but they wont. Silly CBR.

The exchange rate of the ruble is retarded and here is why:

1) Suppose a country exports nothing but has a vibrant GDP. Does the exchange rate for its currency become zero?

2) Of course (1) is ridiculous. Next comes the proxy metric of economic dependence: the assumption for Russia is that
the 40% of federal tax revenues reflect a 40+% dependence of Russia's GDP on oil and gas exports.

3) (2) is ludicrous since oil and gas account for 13% of Russia's GDP. How can the ruble forex rate be set by 13%
of Russia's GDP. Seriously, this is demented. It is made purely insane by the fact that it is a choice of the
Russian government to tax oil and gas exports and not personal incomes. Clearly, Russia could reduce the tax revenue
footprint of oil and gas to 13% by shifting the tax burden onto the 87% of the rest of the economy. Would the
forex speculators then value the ruble more because only 13% of federal tax revenues depended on oil and gas?


At least this distorted market is acting in Russia's favour. It is artificially devaluing Russia's currency without a cent
of CBR intervention and thereby establish a nice import barrier wall that does not require inefficient tariffs and
enforcement to stop contraband.

http://russia-insider.com/en/business/russias-second-quarter-contraction-no-big-deal/ri9267

A nice article summing up the dynamics of the current recession in Russia. It hits on the point I have been making, that
the inflation spike was really short lived (it actually returned to normal by the end of March). This will be a very short
lived recession and the 3rd quarter should see a rebound.

kvs wrote:The exchange rate of the ruble is retarded and here is why:

1) Suppose a country exports nothing but has a vibrant GDP.   Does the exchange rate for its currency become zero?

2) Of course (1) is ridiculous.  Next comes the proxy metric of economic dependence: the assumption for Russia is that
the 40% of federal tax revenues reflect a 40+% dependence of Russia's GDP on oil and gas exports.

3) (2) is ludicrous since oil and gas account for 13% of Russia's GDP.   How can the ruble forex rate be set by 13%
of Russia's GDP.   Seriously, this is demented.   It is made purely insane by the fact that it is a choice of the
Russian government to tax oil and gas exports and not personal incomes.   Clearly, Russia could reduce the tax revenue
footprint of oil and gas to 13% by shifting the tax burden onto the 87% of the rest of the economy.   Would the
forex speculators then value the ruble more because only 13% of federal tax revenues depended on oil and gas?


At least this distorted market is acting in Russia's favour.  It is artificially devaluing Russia's currency without a cent
of CBR intervention and thereby establish a nice import barrier wall that does not require inefficient tariffs and
enforcement to stop contraband.

A last catch. The low taxation of oil and gas comes as a form of social peace with the Russian Wealthy. Low corporate tax allows for a control of Natural ressources. So while the State has enough cash, the thiev...businessmen can have their own slice of salo.

Russian taxation for Business is relatively low (20% on income/30% of actual SS taken at the source) so there is a point there. However, that would be burdening the economy without actually improving it. By 2019 there will be a hike, according to Russian sources.