Russian Economy General News: #7

PapaDragon wrote:

This whole thing is about country's ability to generate profit. It is what determines who wins and who loses .

For example, USSR did not fail because of ideology, it failed because it was unable to generate profit. It placed ideology ahead of financial and business interests, same thing EU is doing today.

Taking actions that will hinder Russia's ability to generate income is absolutely wrong approach. Worse yet, stopping sales of rocket engines and nuclear fuel would not only cause financial loss but would also stimulate development of competition on those markets thus further affecting profits and market share. Again, same mistake EU made already with original sanctions.

Nuclear fuel is especially promising segment now that Westinghouse has gone down because Rosatom has a chance to lay foundations of possible supply monopoly on the planetary scale. It is once in a millennium opportunity and letting it slip trough their fingers would be historic mistake.

And as for rocket engines, as long as they are paid for with paper that can be exchanged for gold or some other material or product with real value there are no problems. And why make it easier on competition by giving away the market share for no reason?

How a country can generate profit ?


The difference between the US and CCCP was the efficiency.

Efficiency means how much worker's hours needed to manufacture a product.


A soviet zsiguli needed say 2000 hours, the pontiac needed 500 hours.

Singular_Transform wrote:

PapaDragon wrote:

This whole thing is about country's ability to generate profit. It is what determines who wins and who loses .

For example, USSR did not fail because of ideology, it failed because it was unable to generate profit. It placed ideology ahead of financial and business interests, same thing EU is doing today.

Taking actions that will hinder Russia's ability to generate income is absolutely wrong approach. Worse yet, stopping sales of rocket engines and nuclear fuel would not only cause financial loss but would also stimulate development of competition on those markets thus further affecting profits and market share. Again, same mistake EU made already with original sanctions.

Nuclear fuel is especially promising segment now that Westinghouse has gone down because Rosatom has a chance to lay foundations of possible supply monopoly on the planetary scale. It is once in a millennium opportunity and letting it slip trough their fingers would be historic mistake.

And as for rocket engines, as long as they are paid for with paper that can be exchanged for gold or some other material or product with real value there are no problems. And why make it easier on competition by giving away the market share for no reason?

How a country can generate profit ?


The difference between the US and CCCP was the efficiency.

Efficiency means how much worker's hours needed to manufacture a product.


A soviet zsiguli needed say 2000 hours, the pontiac needed 500 hours.

based upon perspective. Needs vs wants. What you can and can't develop. Modern economics doesn't work because it relies upon a belief structure about "my money is worth more than yours because of speculators" and "we can print to infinity because we hold dominant". The concept of "what you had as resources is what made you rich" to "what we can own based upon a piece of paper with a dead mans face on it" is what is creating the failed structure where the rich countries are the ones who don't produce anything other than basic services and banking, while the ones with the actual goods are considered poor.

You guys failed at something basic. Soviet union had money even when it collapsed. They had no issue obtaining goods from outside even if heavily sanctioned and no one wanted to deal with them in full economics. What failed was their social structure mixed in with pure corruption. People fighting for power in the Kremlin.

Autarkies existed in history with success stories (early Brazil as example) where it was all about the internal consumption. About meeting the demands of your citizens by production and or imports. Things changed because they figured with introducing the new economic structure (same ones that were used prior to Rome's collapse) is that they figured they could be the few who gets rich.

The idea that the Soviets were broke is a joke. They had their own central bank. They printed their own money. Inflation wasn't that bad. Problem was generally lack of options at the near end (because they relied upon imports to create options for people) and generally mismanagement, mixed in with pure greed. Things could have been fixed by reducing institutes grip on certain aspects of the economy (productions) and allow individuals to start creating their own farms, their own production plants, etc. To create an internal competition to the state enterprises. In turn, it would have created better products as example. But it wouldn't have changed a thing regarding the collapse. Because too much corruption mixed in with too many groups hating each other, spelled a disaster. KGB failed horribly at their job.

Today can be fixed rather easily by Russia by simply either taking the CBR, or forcing them to contribute more to domestic economy rather than these silly reserves. If people don't want to buy Russian goods, that's fine. Money from outside isn't necessarily needed if you can get your own citizens to make what you need and also create self competition. Inflation in the nation would act as a method to increase the currency flowing through the country. This is what England did for decades before hand. They still do in the form of QE. Deflation they are scared of because it reduces the currency flow in theory.

Russia can't do this as of now because of IMF rules and being part of the WTO. But, the US is inadvertently forcing this transition on Russia through these sanctions ordeal. Iran survived and even thrived while being less developed and capable. While Russia had a great existing foundation in both knowledge and industry.

The CBR exerts a ridiculous level of control over the national economy in Russia. It dictates the inflation and interest rate policy
which is totally unacceptable since the CBR is unelected and demonstrably incompetent (assuming no malice, which their is likely to be).

Russia has no obligation to follow the US Fed model.

miketheterrible wrote:

based upon perspective. Needs vs wants. What you can and can't develop. Modern economics doesn't work because it relies upon a belief structure about "my money is worth more than yours because of speculators" and "we can print to infinity because we hold dominant". The concept of "what you had as resources is what made you rich" to "what we can own based upon a piece of paper with a dead mans face on it" is what is creating the failed structure where the rich countries are the ones who don't produce anything other than basic services and banking, while the ones with the actual goods are considered poor.

You guys failed at something basic. Soviet union had money even when it collapsed. They had no issue obtaining goods from outside even if heavily sanctioned and no one wanted to deal with them in full economics. What failed was their social structure mixed in with pure corruption. People fighting for power in the Kremlin.

Autarkies existed in history with success stories (early Brazil as example) where it was all about the internal consumption. About meeting the demands of your citizens by production and or imports. Things changed because they figured with introducing the new economic structure (same ones that were used prior to Rome's collapse) is that they figured they could be the few who gets rich.

The idea that the Soviets were broke is a joke. They had their own central bank. They printed their own money. Inflation wasn't that bad. Problem was generally lack of options at the near end (because they relied upon imports to create options for people) and generally mismanagement, mixed in with pure greed. Things could have been fixed by reducing institutes grip on certain aspects of the economy (productions) and allow individuals to start creating their own farms, their own production plants, etc. To create an internal competition to the state enterprises. In turn, it would have created better products as example. But it wouldn't have changed a thing regarding the collapse. Because too much corruption mixed in with too many groups hating each other, spelled a disaster. KGB failed horribly at their job.

Today can be fixed rather easily by Russia by simply either taking the CBR, or forcing them to contribute more to domestic economy rather than these silly reserves. If people don't want to buy Russian goods, that's fine. Money from outside isn't necessarily needed if you can get your own citizens to make what you need and also create self competition. Inflation in the nation would act as a method to increase the currency flowing through the country. This is what England did for decades before hand. They still do in the form of QE. Deflation they are scared of because it reduces the currency flow in theory.

Russia can't do this as of now because of IMF rules and being part of the WTO. But, the US is inadvertently forcing this transition on Russia through these sanctions ordeal. Iran survived and even thrived while being less developed and capable. While Russia had a great existing foundation in both knowledge and industry.

The only reason why the CCCP collapsed was Gorbachev.

From a game theory standpoint it was the rigidity of the political structure, and the too much power that concentrated in the hand of the first secretary.
As soon as he become an incompetent, not decision capable person the whole system collapsed as a flare up happened..

See north korea, or china during the great leap .

Both of the survived in way worst conditions than the CCCP in the 80s.


Gorbachev had the power to use the military to suppress the forces benefiting from the collapse, but he elected to not to do anything.

Anyone who think that the US, or economy, or inefficiency and so on had any cause in the collapse make huge mistake.


Say as soon as the US central government get weak enough to not to suppress the states they will seek independence.

It is better to be the first person of a small country than the mayor of a county .

See yugoslavia, cccp, czechslovakia and so on.

Practically in every cases the population wanted to stay in the big country, but the politicians benefited from the break up.

Part 2 of Hellevig's report on the Russian economy:

https://www.awaragroup.com/blog/russias-import-substituton/

Again, a must-read!

Singular_Transform wrote:

miketheterrible wrote:

based upon perspective. Needs vs wants. What you can and can't develop. Modern economics doesn't work because it relies upon a belief structure about "my money is worth more than yours because of speculators" and "we can print to infinity because we hold dominant". The concept of "what you had as resources is what made you rich" to "what we can own based upon a piece of paper with a dead mans face on it" is what is creating the failed structure where the rich countries are the ones who don't produce anything other than basic services and banking, while the ones with the actual goods are considered poor.

You guys failed at something basic. Soviet union had money even when it collapsed. They had no issue obtaining goods from outside even if heavily sanctioned and no one wanted to deal with them in full economics. What failed was their social structure mixed in with pure corruption. People fighting for power in the Kremlin.

Autarkies existed in history with success stories (early Brazil as example) where it was all about the internal consumption. About meeting the demands of your citizens by production and or imports. Things changed because they figured with introducing the new economic structure (same ones that were used prior to Rome's collapse) is that they figured they could be the few who gets rich.

The idea that the Soviets were broke is a joke. They had their own central bank. They printed their own money. Inflation wasn't that bad. Problem was generally lack of options at the near end (because they relied upon imports to create options for people) and generally mismanagement, mixed in with pure greed. Things could have been fixed by reducing institutes grip on certain aspects of the economy (productions) and allow individuals to start creating their own farms, their own production plants, etc. To create an internal competition to the state enterprises. In turn, it would have created better products as example. But it wouldn't have changed a thing regarding the collapse. Because too much corruption mixed in with too many groups hating each other, spelled a disaster.  KGB failed horribly at their job.

Today can be fixed rather easily by Russia by simply either taking the CBR, or forcing them to contribute more to domestic economy rather than these silly reserves. If people don't want to buy Russian goods, that's fine. Money from outside isn't necessarily needed if you can get your own citizens to make what you need and also create self competition. Inflation in the nation would act as a method to increase the currency flowing through the country. This is what England did for decades before hand. They still do in the form of QE. Deflation they are scared of because it reduces the currency flow in theory.

Russia can't do this as of now because of IMF rules and being part of the WTO. But, the US is inadvertently forcing this transition on Russia through these sanctions ordeal.  Iran survived and even thrived while being less developed and capable. While Russia had a great existing foundation in both knowledge and industry.

The only reason why the CCCP collapsed was Gorbachev.

From a game theory standpoint it was the rigidity of the political structure, and the too much power that concentrated in the hand of the first secretary.
As soon as he become an incompetent, not decision capable person the whole system collapsed as a flare up happened..

See north korea, or china during the great leap .

Both of the survived in way worst conditions than the CCCP in the 80s.


Gorbachev had the power to use the military to suppress the forces benefiting from the collapse, but he elected to not to do anything.

Anyone who think that the US, or economy, or inefficiency and so on had any cause in the collapse make huge mistake.


Say as soon as the US central government get weak enough to not to suppress the states they will seek independence.

It is better to be the first person of a small country than the mayor of a county .

See yugoslavia, cccp, czechslovakia and so on.

Practically in every cases the population wanted to stay in the big country, but the politicians benefited from the break up.

that's about what I was trying to say.

PapaDragon wrote:You guys went from talking about exports to CBR.... again

Bottom line is: keep exporting, keep making profit and keep competition in check while doing it

Simple

The export is not important for the economy.

Say Russia make it impossible to export oil, or rocket engines.

So?


Russia has a population of 150 million, means they can manufacture practically everything that they need.

all it needs is efficiency, and that is coming from a clear, merciless market that grind to the floor anyone who not using efficiently the workforce.

That is the reason why the US is in trouble.

The efficiency of the workforce ceased to be the mover of growth since the 70s.

See how the US looks like now?

A summary of Hellevig's report, part 2:

- ‘Import substitution’: Already since 2009 (some going back to 2004) been set forth in the Government’s various strategic industrial development programs aiming at the development and modernization of virtually every sector of the economy

- There is now an import substitution program for each of 20 industrial sectors: light industry, aviation, automotive, machine-tools, chemical, forestry, electronics, pharmaceutical, medical equipment, ferrous and non-ferrous metallurgy, transport equipment, energy, oil and gas technology

- 85% of Russia’s household appliances are produced domestically



OIL AND GAS INDUSTRY:
- Russia’s state-owned Rosneft in a moment of triumph commenced upon televised orders of President Putin drilling at the Tsentralno – Olginskaya-1, Russia’s northernmost oil well on the edge of a peninsula so deep in the Arctic Circle that the equipment had to be shipped 3,600km through icy waters navigable only for two months of the year

- Indeed, we said back in 2014 that it was a preposterous idea of the Western powers to think that Russia, a country that has been the leader in space technology for half a century and produces the most cutting edge nuclear arctic submarines, would not be able to make some arctic drilling machines (sic!)



AGRICULTURE:
- In 2Q, 2017 agricultural exports look to overtake imports, making Russia a net exporter for the first time

- Now the plow’s before the sword as the agriculture has overtaken arms as Russia’s second largest exports

- The agriculture sector grew a combined 11.1% in 2014 to 2016. Russia’s food processing industry has also greatly developed and grown in recent years, reaching a cumulated growth of 6.8% in the three years of sanctions. The food processing industry has continued strongly in 2017, with 3.9% growth year-on-year in May



AUTOMOTIVE INDUSTRY:
- Contrary to the received wisdom, the share of locally produced components is as high as 60 – 70% of the total in the Russian automotive industry on a whole

- 79% of all sold cars were produced in Russia (in 2007: 49%). Car imports to Russia fell by 23.7% in 2016 and by a further 15% in the first half of 2017, this while domestic production grew by 20% in the same time in 2017

- In 2016, Russia exported merely 68 thousand cars to a value of $1.1 billion. However, exports are up about 20% for the year

- The market shares of the Chinese producers are still very small; Lifan, which is the leader among them only reached a 1.3% market share in 2016. This is, however about to change as the Chinese have set their eyes on penetrating the Russian market. The carmaker Great Wall is presently building a huge car plant in Russia’s Tula region to the cost of half a billion dollars. The full-cycle production plant is due to open in 2018 and projected to reach a 75% level of localization



PHARMACEUTICAL AND MEDICAL EQUIPMENT:
- Russia’s domestic pharma production reached 286 billion rubles in 2016. In years 2010 – 2016, the growth was nearly 200%. So far, in 2017 growth has continued robust, with 12.6% (real) growth for January – May

- The primary strategic goal of the pharma development program was defined as producing domestically by 2020 90% of all those drugs, which were deemed as vital and essential medicines as per a catalog adopted by the Government. By end of 2016, already 77% of these drugs were readied for production. This does not, however, yet mean that those drugs are produced in significant volumes, more time will be needed for the necessary production volumes to be reached  

- In 2014, the Russia imported drugs for a value of $12.8 billion, but in 2016 only for $9.1 billion, this also in the face of the growth of the general market of drug sales

- The production of medical equipment (technology, health aids, prosthesis) has also seriously lagged behind the global leaders. The overall market in trade of medical equipment reached levels of $4 billion by 2011, while the value of domestic production was only about $0.5 billion. By 2016, the domestic production had doubled to a level of $1 billion, reaching a 20% share of the market. Nevertheless, the volumes are still very small; the potential must be a 10-fold growth within the next ten years

- Russia’s exports of medical equipment was still a misery $75 million in 2016, but there was a much bigger improvement in the decrease of imports, down to $2.9 billion. Russia must set its sights on a level of at least $10 billion, which could be achieved by 2030



AVIATION INDUSTRY:
- Aviation industry runs a development program spanning the years 2013 to 2025. The program allows for a tenfold increase in the value of Russia’s aviation industry from annual levels of $15 billion to $50 billion by 2025, of which half could be generated by exports

- The more objective indicator would be that of the number of aircraft produced. The program foresees by 2025 the annual production of 300 airplanes, military and civilian (3-times increase); 465 helicopters (2-times increase); and 3,000 aircraft engines. For comparison, Airbus and Boeing delivered 635 and 762 aircraft, respectively, in 2015

- In 2016, Russia domestically produced 30 units of civilian and 109 military airplanes, as well as 22 civilian and 186 military helicopters. According to PM Medvedev, reporting on the results of the national economy in 2016, Russia’s aviation industry increased military production by 3.5% while its civilian output grew by about 20%

- Programs: Irkut MC-21, the PD-14 next generation turbofan engine, the helicopters MI-38 and Ka-62; upgrading of the four-engine Ilyushin Il-76 (Il-76MD-90A), complete modernization of the Ilyushin Il-114, complete modernization of the Ilyushin Il-96. Russian and China have agreed to jointly build a wide-body passenger jet to challenge the remaining monopoly of Boeing’s and Airbus in the long-haul flights. The planned maiden flight of this plane is due in 2022 with deliveries starting 2025

- MC-21: The initial production rate is planned at 20 planes per year, with a boost to an annual rate of 70 by 2023

- The development of the MC-21 has been valued at $3 to $4 billion. The development costs of the Russian aircraft have been very modest by any global standards. The established global aviation leaders would spend some 7 billion dollars just to launch a new model based on their existing aircraft



SHIPBUILDING INDUSTRY:
- Russia is also running a long-term state program covering the years 2012 and 2030 aimed at the total overhaul of the shipbuilding industry. According to the program, by the target year of 2030, production of civilian vessels should increase fivefold compared with the starting year 2012

- Hereby Russia would retake its place among world leaders in civilian shipbuilding with a market share of 10% (2012 – 2%). In military shipbuilding Russia already has a 12% world market share, being, after the USA, the second biggest producers. (My comment on the military shipbuilding: There's no way that it's true, Chinese naval build-up is massive, and their exports are also growing quickly. It's probably just that Chinese companies are not listed, because Westerner's info on them is lacking)

- A marvelous example of this development is the Zvezda shipyard in Bolshoi Kamen by Vladivostok. The complex will have Russia’s first shipyard for building large capacity vessels such as oil and gas tankers. Zvezda will also have the capacity to produce ships of up to 350,000 dwt, elements of offshore platforms, ice-class vessels, special vessels and other marine equipment. The Zvezda shipyard started with the production of the first vessels in 2016, with the first delivery scheduled for 2019

- In 2016, the combine turnover of the Russian shipbuilding industry was $141 billion, or about $2.5 billion); civilian production accounted for 25% of that turnover

Singular_Transform wrote:

PapaDragon wrote:You guys went from talking about exports to CBR.... again

Bottom line is: keep exporting, keep making profit and keep competition in check while doing it

Simple

The export is not important for the economy.

Say Russia make it impossible to export oil, or rocket engines.

So?


Russia has a population of 150 million, means they can manufacture practically everything that they need.

all it needs is efficiency, and that is coming from a clear, merciless market that grind to the floor anyone who not using efficiently the workforce.

That is the reason why the US is in trouble.

The efficiency of the workforce ceased to be the mover of growth since the 70s.

See how the US looks like now?

The market does not determine interest rates. In the USA the Fed determines them. The interest rates are the
key valve to the money that companies need to function. Tighten the valve with high interest rates and corporate
financing is constricted and companies either fail or downsize. And vice versa. The CBR is choking Russia's
economy and not some mythical efficiency. It is clear that capitalism is working very well in Russia as we see
from the diversification and development after the 1990s. The CBR's prime rate was less than inflation for most
of the key growth period before the arrival of Nabiullina and her criminal loan shark rates.

PapaDragon wrote:You guys went from talking about exports to CBR.... again

Bottom line is: keep exporting, keep making profit and keep competition in check while doing it

Simple

You seem to miss the key detail that high interest rates can kill the economy even if there is demand for
exported goods. It is not a case of either-or. The CBR threat is something that has to be dealt with
regardless of exports.

In fact, the high interest rate imposed by the CBR acts to make the ruble more expensive relative to
foreign currencies and thus suppresses Russian exports.

Kimppis wrote:Part 2 of Hellevig's report on the Russian economy:

https://www.awaragroup.com/blog/russias-import-substituton/

Again, a must-read!

It is excellent overall. But I have some quibbles. In particular the Arctic drilling technology BS. It is simply nonsensical
to start from the NATO propaganda reference frame where Russia did not have such drilling technology. The USSR was
quite advanced in oil drilling even if wankers claim that lack of maximal contact drilling proved otherwise. The USSR
did not have the commercial incentive to waste money to maximally drain every reservoir. And we see the unexpected
plus of this approach, many "defunct" oil fields in the ex-USSR have been given new life by maximal contact drilling.
To claim that the USSR and subsequently Russia could not drive branching wells is patent BS. In terms of other
aspects of drilling technology, Russia bought out some important western oil service companies in the early 2000s.
It has had access to the latest seismic tomography tools and software from the west well before 2014 and Banderastan.
Sanctioning Russia in the oil and gas drilling sector is the same as closing the barn door after the horses have fled.
It was destined to fail from day one.

The real story here is the failure of financial sanctions to undermine Russian oil and gas drilling activity. This means Russian
companies can arrange for financing elsewhere. This must have come as a major shock to NATO-tards.

kvs wrote:

Singular_Transform wrote:

PapaDragon wrote:You guys went from talking about exports to CBR.... again

Bottom line is: keep exporting, keep making profit and keep competition in check while doing it

Simple

The export is not important for the economy.

Say Russia make it impossible to export oil, or rocket engines.

So?


Russia has a population of 150 million, means they can manufacture practically everything that they need.

all it needs is efficiency, and that is coming from a clear, merciless market that grind to the floor anyone who not using efficiently the workforce.

That is the reason why the US is in trouble.

The efficiency of the workforce ceased to be the mover of growth since the 70s.

See how the US looks like now?

The market does not determine interest rates.   In the USA the Fed determines them.   The interest rates are the
key valve to the money that companies need to function.   Tighten the valve with high interest rates and corporate
financing is constricted and companies either fail or downsize.   And vice versa.    The CBR is choking Russia's
economy and not some mythical efficiency.    It is clear that capitalism is working very well in Russia as we see
from the diversification and development after the 1990s.   The CBR's prime rate was less than inflation for most
of the key growth period before the arrival of Nabiullina and her criminal loan shark rates.

her method, I think, was to save Russia's banking sector, not the economy. This seems to be evident as Russia's banking profits are massive this year. Although some banks are really mad at the CBR closing so many banks so some banks want to create their own group. Even though so many banks closed, there is still .massive amount of banks in Russia. I would hate to think what these banking associations in Russia would think of Canada's? With only having 6 banks in this country.

That sums it up nicely. Nabiullina is a banskter.

Here is an interesting table:



The two columns on the left are for total debt in Russia in domestic currency (left) and foreign currency (right).
The two columns on the right are for government debt in domestic currency (left) and foreign (right).

So the foreign currency obligations of the Russian government are just over $13 billion and falling. The total
debt (including private) in foreign currency is just over $400 billion and falling. So the CBR reserves cover
every penny of foreign currency debt in Russia. This is insane since the only measure for such buffers
in the west is the annual ability to pay. Russia can clearly pay the interest and even the principal on
$400 billion. It should have $40 billion reserves to "cover" the risk.

Yeah, kind of an odd source (from /Russia Reddit), but I don't know what the English-language TASS is doing (or maybe I just missed it). Big news!!

http://www.france24.com/en/20170726-russia-hints-speedier-growth-recovery

MOSCOW (AFP) -

Russia's economic recovery sped up notably in the second quarter, increasing the possibility that growth will exceed the 2 percent target the government set for 2017, Moscow claimed Wednesday.

Finance Minister Maxim Oreshkin said the country's gross domestic product, which went positive at the end of last year following a two-year recession, rose in the second quarter of 2017 by 2.7 percent year-on-year, compared with just 0.5 percent in the first quarter.

"Our forecast for the year of 2 percent seems even a little cautious," Oreshkin said.

The ministry's estimate, which is far more optimistic than the one provided by the country's central bank, is still to be confirmed by the statistics department, which will publish the official figure in the coming weeks.

In the fourth quarter of 2016, Russia recorded its first increase in GDP (0.3 percent) after two years of recession triggered by the collapse of hydrocarbon prices and Western sanctions linked to the Ukrainian crisis.

Some increase in economic growth was already anticipated on the back of the gradual recovery of domestic consumption and unseasonally cold temperatures that provided a boost to the energy sector.

And this at the end, as you'd expect:

In the longer term, economists and authorities alike fear a slowdown in growth due to a lack of structural reforms, the shrinking of the working population and the economy's ongoing dependence on hydrocarbons.

Yeah, muh structural reforms. That's a nice buzzword. Of course, aging is not a good thing for the economy, but let's not exaggerate. The same thing is happening in most places, including the rest of Eastern Europe and China..

This is pretty damn impressive! 2.7% for Q2! Cry Russophobes, CRY!!!

I remember this one German idiot that kept commenting on Russian Market's Twitter feed how "Kleptocratic Putin's mafia can't deliver over 1% yearly growth." Well, there goes his 1%. Sad! There is this deep belief among Russophobes that Russia is doomed to stagnation when oil prices are low, especially with sanctions.

The MSM has exaggerated the myth to such an extent, that most people seriously believe that Russian growth was purely based on high oil prices, including the so called "experts" and leaders. CIA director repeated the same thing only a few days ago, how the Russian haven't "built a real economy". How are they going to spin this? Because ruble has devalued, the Russian economy has declined by 50%, or something?

Doesn't the Russian economy usually grow faster during the second half of the year? Can somebody confirm? So the growth should pick up further from that.

Funnily enough, apparently IMF didn't update their forecast of 1.4% like a few weeks ago... I guess they're really slow in general. I think for a long time last year they predicted something like -1.5 for Russia (in the end it was -0.2%) and a growth of 1% for Turkey (the Turkish economy actually grew by around 2.5%, IIRC).

The "economists" they usually refer to are Kudrin and others from the "Higher school of economics".

Little they seem to know is the structural reform is what already happened a while ago.  It started with Kudrin's removal from the Economic ministers post.

And as you said, it is a good buzzword.  Imagine asking the question "What structural reforms are needed and why?" I imagine such a question will make them collapse into a seizure.

As for the other comment - the german guy and what not - take into account that most do not even understand economics. 1% growth is still growth and isn't stagnation. Stagnation tends to be when growth rates are 0.5% to -0.5%. 1% is still a growth, but very low growth. Either way, fast growth is unsustainable, and most economists don't realize this. If you let your economy just go haywire in growth, it leads to fake developments (Ghost cities - China) and falsification and artificial growth (Art Prices - China another example).

But hey, who cares. Apparently the Russophobes are all correct - They can prove everything with words and no evidence to back things up.

miketheterrible wrote:The "economists" they usually refer to are Kudrin and others from the "Higher school of economics".

Little they seem to know is the structural reform is what already happened a while ago.  It started with Kudrin's removal from the Economic ministers post.

And as you said, it is a good buzzword.  Imagine asking the question "What structural reforms are needed and why?" I imagine such a question will make them collapse into a seizure.

As for the other comment - the german guy and what not - take into account that most do not even understand economics. 1% growth is still growth and isn't stagnation. Stagnation tends to be when growth rates are 0.5% to -0.5%. 1% is still a growth, but very low growth. Either way, fast growth is unsustainable, and most economists don't realize this. If you let your economy just go haywire in growth, it leads to fake developments (Ghost cities - China) and falsification and artificial growth (Art Prices - China another example).

But hey, who cares. Apparently the Russophobes are all correct - They can prove everything with words and no evidence to back things up.

A typical economist with phd can not run a small business.

" structural reform" means make it easy to fire workers, open up the borders for the flow of goods and services and financial transactions, and open up the economy.

That is beneficial for the employers / patrons of economist and for the multinational companies, but not beneficial for the population.

Singular_Transform wrote:

miketheterrible wrote:The "economists" they usually refer to are Kudrin and others from the "Higher school of economics".

Little they seem to know is the structural reform is what already happened a while ago.  It started with Kudrin's removal from the Economic ministers post.

And as you said, it is a good buzzword.  Imagine asking the question "What structural reforms are needed and why?" I imagine such a question will make them collapse into a seizure.

As for the other comment - the german guy and what not - take into account that most do not even understand economics.  1% growth is still growth and isn't stagnation.  Stagnation tends to be when growth rates are 0.5% to -0.5%.  1% is still a growth, but very low growth.  Either way, fast growth is unsustainable, and most economists don't realize this.  If you let your economy just go haywire in growth, it leads to fake developments (Ghost cities - China) and falsification and artificial growth (Art Prices - China another example).

But hey, who cares.  Apparently the Russophobes are all correct - They can prove everything with words and no evidence to back things up.

A typical economist with phd  can not run a small business.

" structural reform" means make it easy to fire workers, open up the borders for the flow of goods and services and financial transactions, and open up the economy.

That is beneficial for the employers / patrons of economist and for the multinational companies, but not beneficial for the population.

Pretty much. Something that most in Russia aren't budging for. And with the sanctions in place, makes it impossible. The Kudrin type can cry all they want about reforms but the real reforms are allowing it to be very easy to open up a local business, to make sure that business isn't being hassled by mafia, to allow them make anything so long as it falls under the law (no drugs, what not), and make it easy for them to do business with other businesses. The rest are all superficial. Oh, and maybe reduce the tax law structure so that it can fit on maybe a single or two sided paper rather than making it a convoluted book.

Ultimately, they will make it all easier once the digital structure is in place. Where businesses can register and pay taxes and what not from a computer or from some sort of service center where it is all automated.

The core of the problems in Russia is not the central bank and its high interest rate.
You could bring the best banker in the world ,and lower interest rates of the bank to 3%
and it will not solve Russia problems at all.  Russia core problems is not even NATO and its
ballistic shield. and is neither the 5th column in Russia that American congress fund..

The core of all Russian problems is Russia leadership ,that is incredibly short sighted ,
in not identifying what are really the problems Russia face and even less how to solve it.
You can't fix a problem ,if you don't identify it first..
And Putin have been unable to identify Russia problem in the world. He is simply blind.

So let me teach you exactly what are Russian problems with its economy.

1)United States is in an undeclared war against Russia .    ..possibly Putin know this..

2)That Putin Does NOTHING ZERO to counter it.

3)The Putin does not understand how Americans manage to get away with anything.

so lets study Russia problems...   that can be summarized in US declaration of war
on Russia and Putin Ignorance on how to deal with it.

So how can Russia counter United States ,that  I S  ALREADY A T  W A R  with Russia. ??  

Russia only have 3 possible options.. to fix its economy and end American hostilities.
and the options here will go from Really awful and dangerous ways to do it. to ideal one.
So which option is the best?

Options...
1)Russia can submit to Americans , and give away them the control of Russia. and
offer them help ,so they can be the dictators of the world. And abandon the Russian project.
and become a parking lot for American tanks.

2) Russia also have the option of WAR .a full scale war with all they have ,were they take by surprise  American military and navy and leadership.  ,
to use its military to force Americans into a peace through force. This could be done
with a preventive nuclear strike on american leadership and all their warships , take them
by surprise and BOOM.. many nukes in US most important economic zones and position its submarines to a full scale attack on US navy aircraft carriers.

3) OR .. Russia can simply take the most outrageous option , the most unthinkable one of all.
That is Russia to something completely unexpected , something incredible.. and that is
. that Russia choose to compete ..with Americans most prestigious business that influence more the world. .. why? to become an influential and very attractive nation
for them ,good enough to replace United States. when combined with Europe.

Putin can't expect Americans to ever be Fair to Russia ,(since their goal is clear a world
empire without Russia) and expect will respect Russia interest as long as Russia depends on the American system and the american world.

Putin complains and complains all the time ,that Americans are unfair to Russia ,they show all the time that they are not bound by any international laws but that Russia is bound by the rules of their created system.  So the question should be.. Why Russia don't create its own System
them ? why Putin does not create an alternative to the American-Europe world ?

What Russia don't create an European - Russian world instead ?
Why he needs to influence Europe instead of Asia ? Asked Gary..
Because Without Europe ,neither NATO and their the american economy and its dollar
as world currency will exist. If Europe makes an alliance with Russia ,economic , military and political ,then it can isolate Americans from the world and turn it overnight into a country completely irrelevant in the world.

So the question then will be , How Can Russia CONVINCE Europe to divorce from Americans?

By being an influential and attractive nation . by showing the world that it can be an alternative
to United States. So what things Americans have ,that no other country have? or compete as
well?

1)Internet  .. uncontested leadership
2)The Computer Industry uncontested leadership
3)the Software industry uncontested leadership
3)Entertainment Industry uncontested leadership
4)Space leadership ... contested but in a limited way ,and only in taxi
to the ISS.
5)And the biggest military alliance in the world.
6)and in combination with Europe they created the "Rules of the international order"  
  what is right and wrong is dictated by them.

Russia can make all the alliances it wants with CHINA ,or Cuba or latin american.. but as long
Putin continues to Ignore the american control over Europe and do nothing to stop it.. then Russia will continue facing Ukrainian and Syrian like wars.. will continue being slapped by sanctions and will continue being disrespected.  Russia needs to become a world leader in
the business ,American use to attract millions and millions towards its nation and culture.


This goes to the question..

Why Americans Never Sanction the Russian SPACE PROGRAM???????  

BECAUSE IS THE ONLY THING RUSSIA HAVE THAT AMERICANS REALLY NEED.
and Can't get anywhere else ,just yet. and is VERY IMPORTANT FOR THEM. extremely important. So if that is the case then why  the IDIOT Putin do not create more Business like that.. that are immune to sanctions??????????????  Why not make Russia the leader ..
not in selling healthy idiots foods..not the leader is totally good for nothing olympics.. and instead invest that money in helping Russia to become the world leader in space
exploration?  Why Putin don't create an alternative for American internet..why wait Americans
to disconnect Russia from the internet to start producing its own?  WHy RUssia does not compete with Intel or Amd ? Why Putin waited for sanctions in 2014 ,to start ,to understand that it needs it own technology and computers.its own smart phones . and not depend on american technology    

Putin likes to talk about independence this and independence that. But Russia is not independent is it?
here is an example of the kind of discussion i find all the time about Russia and Putin.
There is a ROmanov documentary of Russian Tzars ? Then a major debate began in youtube
when a women told the next comment.  

@ Violeta Ivanova...
The greatest ruler in Russian history had to be a german woman ... :-) . 

@lukStSerb
well, Putin is greater.

@Violeta Ivanova
i dont like him  ..

@lukStSerb
You don't have to.. the rest of the World already likes him.

@Violeta Ivanova
[i] despite serbian megalomania, Serbia is not the rest of the world
During Putin's rulership Russia have done nothing remotely close that surpassed previous Russia's leaders.. Putin has been in power for very long time. .In which way is he great?
He is not very smart and counted only on oil and gas to sustain the Russian economy.  Instead of using that period to develop industry and production and make modern economy in Russia , he continued to focus on populism and building the military. and now  economy
with the low oil prices Russia has  economical difficulties. Due to this, Russia is not an international factor whatsoever. You cannot even feed well your pensioners. You need to develop some real modern innovative economy, and Putin did not move in that direction at all...
Great leader is not someone who goes about to make noise with weapons, but who develops the country.

So listen that , not the only one who notice this.
Russia needs a MODERN and INNOVATIVE economy. and not an OLD and Backwards
economy ,that every third world nations try ,because is the only thing they can do.
So Putin behaves with its economy..and if Russia was a third world country.
Lets make Russia an agricultural super power.
Lets advertise Russia and a healthy food sponsor..  
Putin is really bad in business , really backward .
Putin's Russia  does not have an  innovative economy . Putin behave as if Russia is a third world nation ,when it comes to the development of its economy. Lets make agriculture.. oh so hard to do that.. lets sell a lot of potatoes. lets increase the pipelines to europe . lets now focus in olympics to promote populism ,nationalism and tourism. etc etc etc. This in reality the way Third world nations behave. Cuba was very focused in sports.. it was popular in winning gold medals..
but in what way Sports make Cuba a better nation? in what way winning the olympics in Sochi helped Russia influence in the world ,specially with Europe?  This is what Russia needs
and INNOVATIVE ECONOMY. Creating Business ,that are very innovative and no other nation have.  THings like Space tourism , who have that? nobody. Things like Internet.. who have that? only Americans.. Semiconductor Industry , which competition have americans in that business? No ONE.  And then have Hollywood ,Entertainment industry ,video game industry.
now the 3d virtual reality headsets for civilian use and business.. if anyone used one. all those things are very very very innovative ,that makes a nation Stand above all others. scape exploration and manned landings in other planets. Those are very very innovative technology and business. But to invest all your time in making Russia an agriculture power ,or sell more gas and oil ,or Selling healthy food ,or making Russia the capital of sport ,such ideas can only
come from people completely Obsolete leaders and not aware of what drives the world business today . what influence the world more.  and what could make Russia ,fight back at US ,to
end its domination and destructive influence over Europe.

Because Russia is moving towards Agriculture ,what Americans are doing? promoting
Ukraine everywhere around Russian borders to sabotage Russia agriculture.
So this is the problems , Putin the Great Fool ,creates..for not understanding in which
direction needs to move Russia. Because to focus your business in things anyone can compete with you ,is not a smart way to impress the world with your country. Russia needs a Modern and Very innovative economy. with very modern and innovative business.  Artificial Reality ,advanced Robots, Computers, Software engineering , Space tourism ,space exploration. Virtual 3d . video entertainment ,modern movies.. ,a new internet ,Free energy based economy .this is what an Innovative economy is.  If Putin was smart.. it will work very hard in creating free energy cities ,and once the technology is made.. a crash the prices of oil and gas. to zero.
to destroy middle east business ,terrorism financing and in the same way destroy the Petrodollar era. but Putin the great fool , believe that if he continues begging his american partners for being fair ,that they one day will feel sorry for poor Russia. and become nice again.


So Russia will have Permanently a problem with Americans.. an Economic War ,where americans will use everything they have to crash Russia economy. So what will Putin do?
Will the moron continue developing more pipelines ,when americans already openly declared war on Russia energy business? by keeping prices as low as possible? Or will Putin wake up
and develop a Modern and Innovative economy that Americans cannot target ,because the world needs it? that is creating a Sanctions Proof Business driven economy .?

Real incomes of Russian residents in three years decreased by almost 20%

https://rns.online/economy/VSHE-realnie-dohodi-naseleniya-Rossii-s-oktyabrya-2014-goda-sokratilis-pochti-na-20--2017-08-01/

The real incomes of the Russian population have fallen by 19.2% since October 2014, May 2017 was the 31st month of the reduction in the incomes of citizens, the monitoring "Population of Russia in 2017: incomes, expenses and social well-being", prepared by the Institute of Social Policy of the National Research Institute HSE.

"May 2017 essentially became the thirty-first month of the reduction in real incomes of Russians, and compared to October 2014 - the last period of a steady growth in real incomes - the decline for the past time amounted to 19.2%," the HSE study says.

Since the beginning of 2017, real monetary incomes of citizens have decreased by 1.8% compared to the same period last year.

"... Starting from February, statistics fix the fall in real incomes of the population, and following the results of the first five months of 2017, their decrease relative to the corresponding period of the previous year reached 1.8%. At the same time, in nominal terms in May of the current year, disposable monetary incomes of the population, according to Rosstat, amounted to 29,136 rubles, "the monitoring said.

At the same time, the average salary in 2017 continues to grow and in January-May increased by 2.9% compared to the same period last year, reaching 40.64 thousand rubles, for the first time exceeded data as of October 2014 (by 1.6 %).

Vann7 wrote:So Russia will have Permanently a problem with Americans.. an Economic War ,where americans will use everything they have to crash Russia economy. So what will Putin do?
Will the moron continue developing more pipelines ,when americans already openly declared war on Russia energy business? by keeping prices as low as possible? Or will Putin wake up
and develop a Modern and Innovative economy that Americans cannot target ,because the world needs it? that is creating a Sanctions Proof Business driven economy .?

Good Post , I agree Putin has been proven spineless against the US and could not respond appropriately against US sanction on the contrary he keeps purchasing US T Bills as if that will please the Americans.

Can Russian form an alternate Oil Alliance with Iran , Venezeula and Russia Selling Energy in Chinese Yuan and in return to China buying the energy products ........An Alternate to OPEC that does not trade Oil in USD but Yuan ?

Putin did hint of Russia selling Oil in Ruble and Yuan but did not have the courage to carry the threat !

I have no idea what you woman are PMSing about. If you read the awara group article, you will see how good of a job the United Russia party has done in diversifying itself.

Building pipelines is a form of also building guarantees and cooperation. Judging how hostile EU is over the US bill that isn't even active yet, is testimony to that. As long oil in Rubles is a good idea but since Russia hasn't been entirely booted out of the global economy, it isn't necessary. But deals between Iran and China are already in local currency exchanges. I doubt EU agreed to "we will purchase in rubles" and I don't think the CBR is interested in a massive spike in valuation of the ruble since they want it low to stimulate foreign investments and exports.

Then again, I know whom I am talking to.

Austin wrote:Real incomes of Russian residents in three years decreased by almost 20%

https://rns.online/economy/VSHE-realnie-dohodi-naseleniya-Rossii-s-oktyabrya-2014-goda-sokratilis-pochti-na-20--2017-08-01/

The real incomes of the Russian population have fallen by 19.2% since October 2014, May 2017 was the 31st month of the reduction in the incomes of citizens, the monitoring "Population of Russia in 2017: incomes, expenses and social well-being", prepared by the Institute of Social Policy of the National Research Institute HSE.

"May 2017 essentially became the thirty-first month of the reduction in real incomes of Russians, and compared to October 2014 - the last period of a steady growth in real incomes - the decline for the past time amounted to 19.2%," the HSE study says.

Since the beginning of 2017, real monetary incomes of citizens have decreased by 1.8% compared to the same period last year.

"... Starting from February, statistics fix the fall in real incomes of the population, and following the results of the first five months of 2017, their decrease relative to the corresponding period of the previous year reached 1.8%. At the same time, in nominal terms in May of the current year, disposable monetary incomes of the population, according to Rosstat, amounted to 29,136 rubles, "the monitoring said.

At the same time, the average salary in 2017 continues to grow and in January-May increased by 2.9% compared to the same period last year, reaching 40.64 thousand rubles, for the first time exceeded data as of October 2014 (by 1.6 %).

how are they calculating this? And I am afraid to ask, in what currency?

So far, with total inflation since 2014 and the increase in incomes, this doesn't mathematically add up. I'm assuming they are taking in exchange rates into account.