kvs wrote: sepheronx wrote: Austin wrote:http://www.vedomosti.ru/newsline/economics/news/2015/10/27/614486-rossiya-gosdolga
Siluanov: Russia spends on debt service is already 1% of GDPInterfax
The cost of servicing the public debt reached 650 billion Russian rubles. per year, or 0.8% of GDP, Finance Minister Anton Siluanov at the parliamentary hearings in the Federation Council on Tuesday.
According to him, the Ministry of Finance takes at relatively high interest rates and debt service, "replacing" other costs in the budget. This is another argument in favor of the need to contain the budget deficit, the share of debt service is necessary not to increase, but rather reduced, the minister said.
"Growing maintenance costs, so once one factor we can not increase the budget deficit, the debt today, dear, we are in the order of 10-11% per annum, respectively, the larger the loan, the greater the maintenance costs will crowd out other important expenses. Today, the cost on debt service - 650 billion rubles., or 0.8% of GDP, t. e. 4% of the total costs, "- said the Minister. He recalled that in the history of the country was a time "when it is not looked at the cost of borrowing, borrowed to the max, resulting in debt service hindered spending measures in the field of social policy, they squeezed all other costs."
Russia's state debt in 2016 was estimated by the Ministry of Finance, 15.6% of GDP, in 2013 this figure was 11.4% of GDP.
Not bad seeing as they dumped 30% of their debt in 1 year.
Austin systematically ignores my posts and repeats the drivel above. Gazprom debt is not state debt and Siluanov should just shut up.
Here we see one of Russia's main problems: too many idiots in high places who don't even know to keep their traps shut. The Chinese
have a saying that the mouth is the source of all calamity and I fully agree. Siluanov's ignorant blather damages Russia's economy.
The thing that people fail to understand, and may Austin is having trouble understanding, is that state run companies like you mentioned act as separate entities. If lets say Gazprom or Rosneft claim bankruptcy, then all Russian gov has to do is get another bank to buy up its assets or get another oil and gas entities (lukoil, Bashneft, etc) to purchase it up. Or it can even fall under a separate name.
Ukelele or whatever his name is, and Siluanov were the same people, at near the end of last year, who stated that "we need to get out of these sanctions if we want to progress" and other crap. In other words, they don't work for Russia (at least not willing to work hard for it). But they know they cannot go directly against Russia's interests or they will lose their heads. But instead, will just blame Putin's policies and blame everything of the economy on him. They look for the easy way out without doing actual work. I think I recall Putin saying that "These sanctions are not gonna be lifted anytime soon, so you will have to find alternatives". Both these guys are from the same school as Kudrin and the woman at CBR. Only one school churning out idiotic economists in Russia, as no other school is given a second thought (for whatever reason, since the "higher school of economics" has churned out failures after failures). Look how Kudrin turned out. Participating in 5th column parades against the government, against the acceptance of Crimea, etc. If he is like this, guaranteed the rest are like this.
Eventually Russia will have to find alternative economists from different schools. Maybe shut down the "higher school of economics" and find Russian alternatives (since the school is funded by US, or at least has been for decade). Maybe from some other University.
I read someone making a pretty good statement, and it was in reference to this whole ordeal that Austin keeps posting; pretty much the guy compared to Stalin times where Stalin told the economics ministry that they need to find new oil wells and they stated that there are no new oil wells and it is impossible. Pretty much Stalin went further to state that "if no new oil wells found, no (Insert name of politician)". So that put them into high gear and low and behold, they found new oil wells in Tatarstan region as example. If Putin said "Find more money for replenishing reserve, or no Siluanov", guaranteed all of a sudden money will come pouring in.
Austin is worried about the reserve fund. For whatever reason. Since the reserve fund is also part of the larger picture of the FOREX. If they have to borrow more money from the CBR, so be it. At least the money circulates internally, and hopefully they don't get it too high. But lets be realistic here, Putin clearly knows what he is doing and isn't worried like Austin is about the reserve fund or debt. Since overall debt decreased by 30% this year, I really do not know what Austin is getting at. But I can understand his worries, but at the same time, he may only be fully aware of India's economic system compared to Russia's. And well, lets face it, those are two completely different economic structures that do things entirely different. India is a much higher tax based economy than Russia is.
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