Russian Economy General News: #6

Titles mentioned - Bold are really important:
*Ikea launches “In Test Mode” a manufacturing plant for goods sold by Ikea
*Contract signed with Tekhnopromexport (Russia) to build an energy plant in Iran
*Exports of Maize in March retains high growth
*Overseas sales for Online company Ozon.ru grew 2.4 times in 2015
*MMK increaed its exports by a third
*50,000th Engine from Volkswagen Group Rus in Kaluga
*Farm and dairy cattle-breeding complex “Christmas”
*Gazprombank has invested nearly 1 billion rubles in new plant “Uralmash”
*In “Yakuttsemente” celebrated the opening of a new mechanical-repair shop

Karl Haushofer wrote:

sepheronx wrote:Italy to localize production in Russia to avoid food embargo

Interesting. It says that Italians plan to invest $300 million to Crimea (mozzarella cheese and meat production). But can the Italian do this since the Western countries are prohibited to invest anything to Crimea?

Karl Haushofer wrote:

sepheronx wrote:Italy to localize production in Russia to avoid food embargo

the real problem Russia i see will face ,if that Europe lift the sanctions on Russia ,so later Russia is forced to welcome again European expensive food. no idea what other benefit? Is there any benefit for Russia now , that Europe lift the sanctions on Russia? forcing Russia to lift sanctions on Europe.

Project Canada wrote:

Vann7 wrote:

Karl Haushofer wrote:

sepheronx wrote:Italy to localize production in Russia to avoid food embargo

the real problem Russia i see will face ,if that Europe lift the sanctions on Russia ,so later Russia is forced to welcome again European expensive food. no idea what other benefit? Is there any benefit for Russia now , that Europe lift the sanctions on Russia? forcing Russia to lift sanctions on Europe.

Well, I doubt sanctions will go away anytime soon.,

US legislators propose bill to tie Russian sanctions to Crimea

Austin wrote:Interview with Jim Rogers to RT

Fed pushing us to financial catastrophe worse than 2008 - billionaire investor

DerWolf wrote:

Austin wrote:Interview with Jim Rogers to RT

Fed pushing us to financial catastrophe worse than 2008 - billionaire investor

Its for a while that they are talking about the second wave of financial crises worse than 2008. That it will happen that is for sure but the exact time when it will happen remains unknown for all.

Russian Deputy Prime Minister Arkady Dvorkovich suggests China participate in the construction of a high speed railway from Samara, the sixth largest city in southwest Russia, to Tolyatti, on March 24, 2016.

According to Dvorkovich, the Russian side has met with National Railway Administration of China. They discussed about the design of a railway from Moscow to Kazan, which was undertaken by the Chinese side. As the design work is going well and smoothly, the Chinese constructors expressed their hope to participate in more railway projects in Russia.

Deputy PM Arkady Dvorkovich mentioned the construction of a new high speed railway from Samara to Tolyatti in southwest Russia which will pass the Kurumoch International Airport, and said that China is welcomed to take a part.

“Undoubtedly, this is a very attractive project,” Dvorkovich said. “And we will have several more promising railway construction projects in the near future,” he added.

MOSCOW, May 5. /TASS/. The Board of Experts under the Russian Government proposed introducing 10-12% import customs duties on industrial robots and simultaneously reducing duties on imported components for such robots from 5-15% of the customs value at present to zero, the Open Government said on Thursday.
"The Board of Experts suggests introducing a 10-12% customs duty on industrial robots imported to the territory of Russia and reduce the duty on imported components for them to zero in terms of customs regulations and creation of economically lucrative conditions for production of industrial robots," the message says.
Revenues from customs duties are proposed to be directed to subsidizing developments and production of domestic robots.
According to the Board of Experts, Russia imported about 1,500 industrial robots in 2013-2015.


More:
http://tass.ru/en/economy/874030

The drop in Russian state revenues has affected Russian military modernization to some extent, though the Russian government has made an effort to insulate the military from budget cuts. Although the 2015 military budget was cut by five percent mid-year, the total allocation was still 25 percent higher than the previous year’s budget. This allowed the military to continue its modernization process, conduct operations in Syria, and fulfill its training and exercise programs.

With oil prices remaining low, the military is facing a more difficult financial picture in 2016. In November, the Finance Ministry announced that the total 2016 defense budget would be largely the same as in 2015. However, last month, an additional five percent cut was announced, which will result in the first annual net decline in Russian defense spending since Vladimir Putin became president in 2000.

As a result of the deteriorating financial outlook, the fulfillment of the 2011-2020 State Armament Program is now in question. The Russian military continues to develop new designs and receive new hardware but has been forced to reduce the quantities purchased of some items and to defer some big ticket items. For example, completion of the Yasen and Borei nuclear submarine construction programs has been pushed back from 2020 to no earlier than 2023 for the Yasen class and 2021 for the Borei class. Whereas Uralvagonzavod has previously announced that it will provide 2300 Armata T-14 main battle tanks to the Russian army by 2020, experts believe that only 200-300 will actually be procured over the next five years, with 2300 remaining a goal for 2030. Completion of the Barguzin railroad-based ICBM system was initially delayed by a over a year and then canceled due to financial problems. Finally, orders of the T-50 fifth generation fighter aircraft were reduced in 2015 from 55 to 12 because of the country’s deteriorating financial situation.

Longer term projects have also faced delays, with procurement of a new long range strategic bomber being postponed in favor of modernization of existing bombers. Plans for building large naval ships have been particularly affected. Construction of a new 14 thousand ton nuclear-powered destroyer, once intended to start in 2016, appears to no longer be under discussion, while plans for large amphibious assault ships, meant to replace the Mistral project that was canceled due to Western sanctions, remain amorphous and may have been quietly put on the back burner.

Overall, the constraints on procurement that have resulted from military budget cuts should not affect Russia’s strategic outlook in the near to medium term. The net effect of the procurement delays is that the Russian military will continue to depend on existing platforms and weapons to a greater extent and for a longer time period than originally hoped by the organizers of the military modernization effort. However, the Russian military is more than strong enough to hold its own in a conventional conflict against any likely adversaries other than the United States. And it could not hope to match the U.S. military even if the 2020 State Armament Program was fully implemented.

U.S. policymakers should not assume that Russia’s budget problems mean that they can stop thinking about the Russian military. While the Russian military is postponing and delaying many of its most ambitious military procurement projects, the financial situation has had a very limited impact on current military operations. The Russian military has shown that it can continue to maintain its schedule of exercises despite the financial constraints. The military has continued to regularly hold snap exercises, a practice that was begun by Defense Minister Sergey Shoigu soon after his appointment. The added financial outlays that resulted from the operation in Syria have been absorbed by the Defense Ministry without problem, with part of the cost being simply reallocated from the training budget.

Russia’s economic crisis has had at least one positive outcome for the Russian military. The number of applicants to serve as contract soldiers in the military has increased. For young men from small towns in the provinces, a military salary can provide a secure paycheck and reasonable living conditions. With the economic slowdown, the army has become a more attractive option.

The potential threat posed by the Russian military to Western states does not depend on the full implementation of all of the procurement plans. Russia’s existing complement of military hardware includes formidable air defense systems, high quality strike aircraft, and a growing number of ships and submarines equipped with land-attack and anti-ship cruise missiles. These forces have demonstrated their ability to conduct a small but effective air strike campaign in Syria, can present a strong A2/AD challenge to NATO forces operating near Russia’s borders, and have the capability of using cruise missiles to threaten targets up to 2500km away from ships located in enclosed seas (such as the Caspian and the Black Sea) where they are quite well-protected from potential adversaries. These existing capabilities will present a concern for U.S. military planners regardless of Russia’s ability to complete its larger military modernization program.

Another garbage article? Sure sounds familiar.

Nothing stated in the article has ANYTHING to do with budget. Anyone with half a fucking brain would be able to point this out.

Lets begin:


The drop in Russian state revenues has affected Russian military modernization to some extent, though the Russian government has made an effort to insulate the military from budget cuts. Although the 2015 military budget was cut by five percent mid-year, the total allocation was still 25 percent higher than the previous year’s budget. This allowed the military to continue its modernization process, conduct operations in Syria, and fulfill its training and exercise programs.

With oil prices remaining low, the military is facing a more difficult financial picture in 2016. In November, the Finance Ministry announced that the total 2016 defense budget would be largely the same as in 2015. However, last month, an additional five percent cut was announced, which will result in the first annual net decline in Russian defense spending since Vladimir Putin became president in 2000.


I am starting to think you are purposely posting rehashes from what you or others have posted in the past, but this one sure sounds familiar already. But let me break this one apart: http://russia-insider.com/en/putin-vows-defense-cut-wont-affect-procurement/ri13332

Since it has already been stated with:

The downside of this is that spending cuts will disproportionally affect personnel costs perhaps slowing down Russia's drive to attain more professional soldiers and rely less on conscripts serving short, 1-year terms.


As a result of the deteriorating financial outlook, the fulfillment of the 2011-2020 State Armament Program is now in question. The Russian military continues to develop new designs and receive new hardware but has been forced to reduce the quantities purchased of some items and to defer some big ticket items. For example, completion of the Yasen and Borei nuclear submarine construction programs has been pushed back from 2020 to no earlier than 2023 for the Yasen class and 2021 for the Borei class. Whereas Uralvagonzavod has previously announced that it will provide 2300 Armata T-14 main battle tanks to the Russian army by 2020, experts believe that only 200-300 will actually be procured over the next five years, with 2300 remaining a goal for 2030. Completion of the Barguzin railroad-based ICBM system was initially delayed by a over a year and then canceled due to financial problems. Finally, orders of the T-50 fifth generation fighter aircraft were reduced in 2015 from 55 to 12 because of the country’s deteriorating financial situation.


Once again, whoever quotes this idiot as worthy of anything, should be fired from whatever job they have especially if it is a so called think tank. Let me explain:

The T-50 is being ordered by 12+0 due to the fact that these are training units for actual use. Anyone will know that a unit is derived of 12 aircrafts, hence why Russia purchases in 12's. Notice that no additional orders mentioned? it is all because it is for training and seeing serial production. As for when items are pushed back isn't anything to do with finances. The projects are already financed. When it is pushed back during its production is due to the fact that there are issues with either production or suppliers:

Deputy Defense Minister Yuri Borisov told the meeting that arms plants have missed delivery schedules on 15 warplanes, eight navy ships and 240 armored vehicles among other weapons systems.

Borisov said that some of the delays were linked to subcontractors going out of business and missing technology.

He claimed that the Western ban on the sales of weapons and arms technologies to Russia and Ukraine's decision to halt military industrial cooperation with Russia "had no significant impact" on Russian arms production.



Longer term projects have also faced delays, with procurement of a new long range strategic bomber being postponed in favor of modernization of existing bombers. Plans for building large naval ships have been particularly affected. Construction of a new 14 thousand ton nuclear-powered destroyer, once intended to start in 2016, appears to no longer be under discussion, while plans for large amphibious assault ships, meant to replace the Mistral project that was canceled due to Western sanctions, remain amorphous and may have been quietly put on the back burner.


What? It was no more than a month and half ago we heard more about Russia's helicopter carrier. As well, Liner hasn't even been decided yet. And neither of these are a case regarding funds. This is like cherry picking issues that derived from a supplier issue or production issues, and instantly state "oh, it is because of lack of funds!" Who hires these retards? None of this is reference to finances at all.

This article was posted on this forums already, over a month ago, with almost exactly same details. It was on an Indian website though and I recall bitching about it. The article is all a bunch of "hunches" with absolutely no proof what-so-ever to back up the claims. And even someone that can take even a few minutes to do some research will know that his comments regarding the ships, T-50, and such are all pretty much pure non-sense.

Such articles simply turn this forums into a laughing joke, especially when it is repeated.

sepheronx wrote:Which blog? Therusnews or the site where the article is from?  Cause I cannot find a comment section where I can reply to.

Here is what I posted on the russiadefence forums regarding this article and why it is not worthy of a post:
https://www.russiadefence.net/t2358p250-state-armaments-program-2011-2020#162701

Essentially the article in question is a series of "hunches" with no concept of reality.  As well, here is another issue: https://www.yahoo.com/news/putin-russian-arms-upgrade-wont-affected-budget-cuts-150657283.html?ref=gs

The budget has not hit the SAP2020 program which these procurement's fall under.  Instead, it hits at the finances of various departments, pay, and other services in the military.  Total cut is 5% from the previous 10%.  Not aimed at the SAP2020 program that still sits at roughly 20T Rubles.

And no one purchases equipment in large numbers especially when it is brand new and fresh off the new tooled assembly line.  T-50 gets 12 aircraft instead of 55 because a unit in the airforce is 12 aircrafts.  Ever notice why Su-30SM was ordered by 36?  12 aircraft 3x.  Essentially, 12 aircrafts of T-50 will go to a unit that will test the aircraft of production model to see if it will work essentially for its needs.

As for your comment regarding the Russian helicopter carrier, it was actually in January this year that (Kret (Rostec Holding) http://kret.com/en/news/10258/) stated the equipment for it will be built in 2018.  So yes, there is a lot of time going to be needed to produce such a vessel since well, you know, they have not built one.

As for delays - that has nothing to do with procurement budget.  Once the item is paid for, it starts development.  This is what Borisov stated regarding about delays:

"    Deputy Defense Minister Yuri Borisov told the meeting that arms plants have missed delivery schedules on 15 warplanes, eight navy ships and 240 armored vehicles among other weapons systems.

   Borisov said that some of the delays were linked to subcontractors going out of business and missing technology.

   He claimed that the Western ban on the sales of weapons and arms technologies to Russia and Ukraine's decision to halt military industrial cooperation with Russia "had no significant impact" on Russian arms production."

Austin wrote:Looks like US will make sure putting immense pressure on EU that Nord Stream-2 project gets cancelled

Southern Gas Corridor Best Alternative to Nord Stream 2 - US Energy Envoy

http://sputniknews.com/business/20160506/1039207698/nord-stream-south-gas-corridor.html

I just hope if they succeed in thrawting Nord Stream 2 , then Russia should just ban any US companies from participating in its energy business , plain simple blanket ban

Jean Claude Tremblay · Reykjavík, Iceland
Wow!!! $45 billion to build a pipeline with limited supply at the other end of the pipe? I have hard time believing in the economic of such a project? Let`s do the math 60 billion m³ @ 167 per thousand m³ = $10 billion per year of gas to be delievered (current price in Europe). If you add the royalties for each of the 7 countries in which the pipeline pass, and the pumping cost, maintenance, security in politicaly unstable countries and the cost at the production well. I don`t see how the project could ever be viable at present market price?

sepheronx wrote:

Austin wrote:Looks like US will make sure putting immense pressure on EU that Nord Stream-2 project gets cancelled

Southern Gas Corridor Best Alternative to Nord Stream 2 - US Energy Envoy

http://sputniknews.com/business/20160506/1039207698/nord-stream-south-gas-corridor.html

I just hope if they succeed in thrawting Nord Stream 2 , then Russia should just ban any US companies from participating in its energy business , plain simple blanket ban

This guy did a good job in breaking this down:

Jean Claude Tremblay · Reykjavík, Iceland
Wow!!! $45 billion to build a pipeline with limited supply at the other end of the pipe? I have hard time believing in the economic of such a project? Let`s do the math 60 billion m³ @ 167 per thousand m³ = $10 billion per year of gas to be delievered (current price in Europe). If you add the royalties for each of the 7 countries in which the pipeline pass, and the pumping cost, maintenance, security in politicaly unstable countries and the cost at the production well. I don`t see how the project could ever be viable at present market price?