Russian Economy General News: #6

People's resilience helps Russia dodge deeper crisis

http://sputniknews.com/russia/20160414/1037978376/putin-annual-direct-line.html?utm_source=https%3A%2F%2Ft.co%2FAUbmuG4yKx&utm_medium=short_url&utm_content=bbRP&utm_campaign=URL_shortening

Russian economy is now in the middle ground between good and bad. Overall the situation has improved and the trend is positive.

A question about whether the economic decline has bottomed out.

"We have a positive trend but it is not over. We expect GDP to continue to fall 0.3% this year, and next year we will see growth," said the president.

The president explained that it's not about printing money, Gov't must restructure the economy. Industrial production increased in Feb. High tech exports are increasing compared to commodity exports.



Read more: http://sputniknews.com/russia/20160414/1037978376/putin-annual-direct-line.html#ixzz45nvSTtIR

Russia still 6th largest economy

Good article.

Russia: a global energy powerhouse that’s much more than a petro-state

http://theconversation.com/russia-a-global-energy-powerhouse-thats-much-more-than-a-petro-state-57766

What I am happy about is Russia is utilizing their oil and gas industry by investing heavily in processing the oil into plastics, petrol, construction equipment, and other goods (electronics as well) and for NATGAS putting in emphasis for LNG and others.

What I am curious about though, is that since the future NATGAS will be the major contributor for electricity generating due to being cheap and very clean compared to coal (not as cheap as coal but much cleaner) and efficient, is if Russia is investing into any newer NATGAS energy generating plants?

http://russia-insider.com/en/business/has-russias-import-substitution-policy-flopped/ri13931

And

http://russia-insider.com/en/russias-import-substitution-policy-too-early-tell/ri13932

Both BNE news, which is George Soros funded.

But if anyone has the total number of SMEs created in Russia last year, please provide the data.

Figured as much. But curious about SME's created/thrived/survived per year in Russia. They have to have some sort of documentation of number of registered sme's per year.

Edit: http://data.worldbank.org/indicator/IC.BUS.NREG

So Russia had more registered non-liability businesses in 2012-2014 than France or Italy. Yet these economic news sites thrash at Russia. I wonder what 2015 numbers are?

KVS, I found some info to my earlier question:


http://www.biia.com/bankruptcies-and-registrations-in-russia-dynamics-2015

It Doesnt mean that it = SME's but gives a good indication to the events happening.

F*cking pathetic! Just like PACE, the WTO is yet another useless institution with negative strategic value for Russia (yet another gift from Medvedev), Ukraine is set to take Russia to the WTO over transit of Ukrainian goods, and Ukraine has US, EU, and Turkey's backing which means its basically guranteed WTO will rule in favor for Ukraine when they're guilty of blocking transit of Russian goods, talk about ridiculous sanctimonious hypocrisy:

Media: at the meeting of the WTO claims of Ukraine to the Russian Federation supported by the US, EU and Turkey

There is prime opportunity here. While WTO was always a bad idea for Russia, this will turn out in Russia's favor, so long as Russia sticks to their guns.

Essentially, what I am getting at is that if they take Russia to court over this, Russia can counter sue all the parties for illegal,non UN mandated, sanctions on Russia. Since US and Ukraine won't agree with that, it will end up putting a huge black mark on WTO and maybe even dissolve it (wishful thinking on my end).

A lot of comments on that site is strange though. They keep talking of the palm oil cheese incident as if all cheese are like this, when it ended up as 10% of cheese was. I think some Russians are behind the times when it comes to evidence/truth. But they have no worries, if this happens, Russia may opt out of WTO and Russian businesses as well as dairy producers will be rolling in contracts. And Russia could then set any laws/rules regarding Enterprises in the country, which may favor Russia's business climate even if it is undercutting the WTO rules

sepheronx wrote:There is prime opportunity here. While WTO was always a bad idea for Russia, this will turn out in Russia's favor, so long as Russia sticks to their guns.

Essentially, what I am getting at is that if they take Russia to court over this, Russia can counter sue all the parties for illegal,non UN mandated, sanctions on Russia. Since US and Ukraine won't agree with that, it will end up putting a huge black mark on WTO and maybe even dissolve it (wishful thinking on my end).

A lot of comments on that site is strange though. They keep talking of the palm oil cheese incident as if all cheese are like this, when it ended up as 10% of cheese was. I think some Russians are behind the times when it comes to evidence/truth. But they have no worries, if this happens, Russia may opt out of WTO and Russian businesses as well as dairy producers will be rolling in contracts. And Russia could then set any laws/rules regarding Enterprises in the country, which may favor Russia's business climate even if it is undercutting the WTO rules

I think you're too optimistic about the WTO, because the whole purpose of it's existence is to prevent non-Atlantic nations from being self-sufficient, especially if their thermonuclear powerhouses.

If Russia pulls out of the WTO, it only makes sense to put 200-500% tariffs on western goods and use the tariff revenue to finance domestic industry. In 2013 the E.U. alone made $200 billion of profits in the Russian market...I hope they lose at least 95% of their market share to domestic industry and nations friendly to Russia.

After that I hope Russia ends all cooperation on reigning in filesharing, let all the Russophobic media in the world eat the losses from Russia becoming a hub of filesharing lol!

...And lastly Russia should team up with Greece and Cyprus and jointly declare a debt moratorium on Western based financial services on public and private debt, and there's no need to pay back debt to countries declaring financial warfare on you...which indicates they don't want the debt to be payed back. Putin foolishly enabled $85 billion worth of debt payed back in 2015, which could of been used for funding space exploration or military rearmament. Russia, Greece, and Cyprus should set up a Debt Moratorium conference in Moscow, and challenge the validity of Duetsche and JP Morgan banks alleged $75 and 70 trillion of derivatives (respectively), and demand to prove the value in hard actual assets. How can any bank accumulate $70+ trillion of anything if their not running a ponzi scheme?

...Naturally NATO will try to bully Greece and Cyprus, so it only makes sense to hold referendums to join the Russian federation, to leave the EU and NATO, and declare debt moratoriums. With the vacuum of Western corporations leaving the Russian market, nearly $200 billion/year will be opened up for Greek and Cyprus to take advantage of, and Russian citizen can make up the difference in tourism that was lost in the E.U., Greek and Cyprus could enable capital and exchange controls (to prevent hyperinflation) and slowly peg their currencies to Russian rouble at 50-75% value to make them competitive. Militarily speaking Russia can help regain Northern Cyprus, the Turkish occupied Greek islands for the Greek diaspora, and Russia will gain unlimited warm-water ports and a unsinkable aircraft carrier (Cyprus) to defend Syria and Russian interests in the Middle East.

magnumcromagnon wrote:

sepheronx wrote:There is prime opportunity here. While WTO was always a bad idea for Russia, this will turn out in Russia's favor, so long as Russia sticks to their guns.

Essentially, what I am getting at is that if they take Russia to court over this, Russia can counter sue all the parties for illegal,non UN mandated, sanctions on Russia. Since US and Ukraine won't agree with that, it will end up putting a huge black mark on WTO and maybe even dissolve it (wishful thinking on my end).

A lot of comments on that site is strange though. They keep talking of the palm oil cheese incident as if all cheese are like this, when it ended up as 10% of cheese was. I think some Russians are behind the times when it comes to evidence/truth. But they have no worries, if this happens, Russia may opt out of WTO and Russian businesses as well as dairy producers will be rolling in contracts. And Russia could then set any laws/rules regarding Enterprises in the country, which may favor Russia's business climate even if it is undercutting the WTO rules

I think you're too optimistic about the WTO, because the whole purpose of it's existence is to prevent non-Atlantic nations from being self-sufficient, especially if their thermonuclear powerhouses.

If Russia pulls out of the WTO, it only makes sense to put 200-500% tariffs on western goods and use the tariff revenue to finance domestic industry. In 2013 the E.U. alone made $200 billion of profits in the Russian market...I hope they lose at least 95% of their market share to domestic industry and nations friendly to Russia.

After that I hope Russia ends all cooperation on reigning in filesharing, let all the Russophobic media in the world eat the losses from Russia becoming a hub of filesharing lol!

...And lastly Russia should team up with Greece and Cyprus and jointly declare a debt moratorium on Western based financial services on public and private debt, and there's no need to pay back debt to countries declaring financial warfare on you...which indicates they don't want the debt to be payed back. Putin foolishly enabled $85 billion worth of debt payed back in 2015, which could of been used for funding space exploration or military rearmament. Russia, Greece, and Cyprus should set up a Debt Moratorium conference in Moscow, and challenge the validity of Duetsche and JP Morgan banks alleged $75 and 70 trillion of derivatives (respectively), and demand to prove the value in hard actual assets. How can any bank accumulate $70+ trillion of anything if their not running a ponzi scheme?

...Naturally NATO will try to bully Greece and Cyprus, so it only makes sense to hold referendums to join the Russian federation, to leave the EU and NATO, and declare debt moratoriums. With the vacuum of Western corporations leaving the Russian market, nearly $200 billion/year will be opened up for Greek and Cyprus to take advantage of, and Russian citizen can make up the difference in tourism that was lost in the E.U., Greek and Cyprus could enable capital and exchange controls (to prevent hyperinflation) and slowly peg their currencies to Russian rouble at 50-75% value to make them competitive. Militarily speaking Russia can help regain Northern Cyprus, the Turkish occupied Greek islands for the Greek diaspora, and Russia will gain unlimited warm-water ports and a unsinkable aircraft carrier (Cyprus) to defend Syria and Russian interests in the Middle East.

Wow. There is a lot here.

I wrote a new oped:
OPED: Economics – What direction I think Russia is choosing and my opinion of it

Please give insight and any factual errors.

Should note though that the government of Russia may be on some sort of cahoots with the CBR on playing a weird game that makes the world think that the main lending rate is 11% but in reality is much lower kind of thing: http://dailyasianage.com/news/13495/putins-50b-oil-cache-helps-russia-to-ignore-ecb

If this is the case, then it lowers inflation while lending at lower rates to strategic companies. As I have also noted, venture funds is also on the rise in diversification, which gives indication for other types of loans for businesses.

sepheronx wrote:Should note though that the government of Russia may be on some sort of cahoots with the CBR on playing a weird game that makes the world think that the main lending rate is 11% but in reality is much lower kind of thing: http://dailyasianage.com/news/13495/putins-50b-oil-cache-helps-russia-to-ignore-ecb

If this is the case, then it lowers inflation while lending at lower rates to strategic companies.  As I have also noted, venture funds is also on the rise in diversification, which gives indication for other types of loans for businesses.

I didn't read anything in that article that indicates that the "main lending rate" is much lower or that banks can borrow money at rates much lower than the official rates.

http://www.bloomberg.com/news/articles/2016-03-13/putin-s-50-billion-oil-cache-gives-russia-luxury-to-ignore-ecb

ussian banks are sitting on the most cash in five years, allowing them to lend to each other at a lower rate than they borrow from the central bank

Pretty strong implication. As well, venture fund RVC gets its money via gov, so they use it for seed funds.

Big win for Russia in the Yukos litigation. Court ruled in favor of Russia and threw out the $50B arbitration award. This is very good news.

court throws out $50B arb. award

Interesting. Funny how things change quickly and various groups do a 180. Not long ago the Hague ruled in favor against the fifth columnists a foreign organizations. After the court in France though, I find this quite funny.

http://www.bbc.com/news/world-europe-36090882

Yeah, late to the party, but basically this.

I only can imagine how the butthurt belt is feeling.

sepheronx wrote:http://www.bloomberg.com/news/articles/2016-03-13/putin-s-50-billion-oil-cache-gives-russia-luxury-to-ignore-ecb

In contrast to unprecedented stimulus measures by European peers, Russian central bank governor, Elvira Nabiullina, is expected to leave rates unchanged at 11 percent when she convenes policy makers Friday.

Why are they letting her get away with this?

It is imo a game they are playing against the west. On the top level, it seems they are using high interest rates to curb inflation, but below, the government is flooding cheap cash to banks and possibly other entities to clearly loan out at significantly less interest rates. So it kinda kills two birds with one stone. But it is kinda dirty imo, and officially they want real low inflation. As their belief is that the inflation will kill any long term growth even with low interests. So we will eventually (this or next year) and official rate drop. If max's sources are correct, and there is pressure on CBR to lower rates, then we may see it soon.

sepheronx wrote:It is imo a game they are playing against the west. On the top level, it seems they are using high interest rates to curb inflation, but below, the government is flooding cheap cash to banks and possibly other entities to clearly loan out at significantly less interest rates. So it kinda kills two birds with one stone. But it is kinda dirty imo, and officially they want real low inflation. As their belief is that the inflation will kill any long term growth even with low interests. So we will eventually (this or next year) and official rate drop. If max's sources are correct, and there is pressure on CBR to lower rates, then we may see it soon.

Another "clever plan"? I don't trust them.
Reduce the interest rates ASAP.

The single factor holding the Russian economy back now is not the oil price. It is the sky-high real interest rates.

The very latest guidance from the Central Bank however suggests that even the Central Bank has finally come round to the view that there are no grounds to delay cuts in interest rates for much longer.

With early cuts in interest rates now likely against the background of what is probably already an ongoing recovery the question would appear to be less whether growth will return but how strong will that growth be.