Russian Economy General News: #8

Russia is becoming more attractive to foreign investors, who are ready to pour more money into the economy every year, according to Economic Development Minister Maksim Oreshkin.

“We see a positive trend in foreign direct investment in the past several years. This volume exceeded $20-25 billion in 2017,” he said at the World Economic Forum in Davos on Thursday.

The biggest winners are foreign companies that invested in Russia in the last few years despite the financial crisis and sanctions, Oreshkin said.

“The past years saw a turbulent period in the geopolitical sense, which affected the economy. The companies that invested in those years are now reaping the good results of these decisions,” the Russian minister said.

“If we look at the statistics, we will see a number of major transactions, which proves that the investment climate is improving.”

With a $4 trillion GDP in terms of Purchasing Power Parity (PPP) Russia is the sixth-largest economy in the world after China, the United States, India, Japan and Germany.

Since 1999, Russia has enjoyed a 30-fold increase in foreign currency reserves, public debt has shrunk to 17.2 percent of GDP compared to over 92 percent 18 years ago.

The total value of assets in the Russian banking system has risen 24-fold to $1.43 trillion. GDP per capita almost tripled to $27,900 to become the largest among BRICS countries.

par far wrote:"Russian economy under Putin: Quality of life tripled, foreign debt fell 75%."


https://www.rt.com/business/417135-putin-presidency-economic-growth-russia/

Things have changed markedly in 18 years, as Russia’s public debt has now shrunk to 17.4 percent of GDP and reserves have increased to $356 billion. Low debt and growing reserves helped the country to live through the economic crisis of 2008 and the recession of 2014-2016, caused by a fall in oil prices and Western sanctions.

Austin wrote:

par far wrote:"Russian economy under Putin: Quality of life tripled, foreign debt fell 75%."


https://www.rt.com/business/417135-putin-presidency-economic-growth-russia/

Things have changed markedly in 18 years, as Russia’s public debt has now shrunk to 17.4 percent of GDP and reserves have increased to $356 billion. Low debt and growing reserves helped the country to live through the economic crisis of 2008 and the recession of 2014-2016, caused by a fall in oil prices and Western sanctions.

If i am not wrong Russian Public Debt is 14 % of GDP

https://fred.stlouisfed.org/series/DEBTTLRUA188A

The outflow of funds from the Russian economy was more than $ 1 trillion over the past 30 years. This was stated by presidential adviser Sergei Glazyev in the World Blockchain and Cryptocurrency Summit, held in Moscow.

"You know, Russia is the richest country in the world. We over 30 years have presented to the world financial system more than $ 1 trillion, which flowed from Russia. Frankly speaking, we do not know where they are, we know that about half a trillion dollars is rotated between off-shores and the Russian economy - the circuit is about hundreds of billions of dollars annually. And the second half of a trillion has evaporated in an unknown direction. This, of course, worries about our tax services. It turns out that the more we are draining from the country, the greater the burden of taxation on those who remain. This is unfair, "he said.

According to Glazyev, the emergence of digital money will allow to fully monitor cash flows.

"In the history of economic thought, a tempting task is to measure the velocity of money circulation, to understand how this speed affects inflation, to build a very close to reality model of monetary circulation, with which central banks could operate," Glazyev summed up.

Russian presidential aide Sergei Glazyev called suicide the possible introduction of US sanctions against Russian federal loan bonds (OFZ). He said this to RNS on the sidelines of the World Blockchain and Cryptocurrency Summit, taking place in Moscow.

"Sanctions against Russian state securities will mean the collapse of the dollar's empire. If another country carries out some confiscation measures against one of the leading countries of the world, grossly violating its obligations and international law, this will mean a complete and final loss of confidence in American jurisdiction from, at least, most Eurasian market participants. Therefore, for America it will be suicide, it will be the collapse of the dollar and the beginning of the era of Eurasian currencies, "he said.

Glazyev added that "for Americans, the losses will be several orders of magnitude higher, because no one will believe either the dollar or American financial instruments."

On July 25, 2017, the House of Representatives of the US Congress passed a bill on sanctions against Russia, which states that within 180 days the US authorities will discuss the possibility of expanding restrictive measures on Russian public debt.

Washington. January 30. INTERFAX - New anti-Russian sanctions will be directed against foreign entities carrying out major deals with the defense sector and Russian intelligence, the State Department said.

"In general, the imposed sanctions will be mainly targeted against non-Russian entities that are responsible for significant transactions with the Russian defense and intelligence sector," the State Department said in a statement.

Washington State Department . January 30. Interfax - Russia has lost billions of dollars in failed defense deals after the entry into force of the law "On Countering US Enemies through Sanctions," the State Department said.

"Today, we informed Congress that this law and its implementation are detrimental to Russian defense transactions. (...) Since its entry into force, according to our estimates, foreign governments have abandoned planned or already announced purchases of several billion dollars" , - State Department spokesman Heather Neuert said.

"Given the long time intervals usually associated with major defense deals, the results of these efforts are just beginning to manifest itself.This point, if the law works, sanctions will not be imposed on specific organizations or individuals, because the law, in fact, works as a restraining means, "she noted.

H.Noyert stressed that further details are contained in a secret report, which the agency submitted to Congress.

The US Treasury Department released the so-called Kremlin report - a report on officials and businessmen close to Russian President Vladimir Putin and "parastatal companies" that have close ties with the authorities. There are 210 names in total: 114 Russian politicians and 96 businessmen with a fortune of more than $ 1 billion.

In particular, the United States Kremlin list includes: Dmitry Medvedev, Igor Shuvalov, Vitaly Mutko, Alisher Usmanov, Roman Abramovich, Suleiman Kerimov, Anton Vaino, Alexei Gromov, Dmitry Peskov, Vladislav Surkov, Dmitry Kozak. Also on the list are Valentina Matvienko, Vyacheslav Volodin, Igor Sechin, Alexey Miller, Sergei Naryshkin, Gennady Timchenko, Alexander Bortnikov, Peter Aven, Vladimir Potanin, German Gref, Andrei Kostin.

In addition, the "Kremlin report" lists companies that have a state share of more than 25% and revenues of more than $ 2 billion.

As Daniel Fried, former coordinator of the US Department of State's Sanction Policy, said earlier in an interview with Kommersant , getting into this list does not mean that sanctions will be automatically imposed against these specific people.

Recall, the US State Department announced that since January 30, Washington can impose sanctions against foreign companies or people "for significant transactions by organizations from the Russian defense or intelligence sector." Earlier, the US Department of State and the US Treasury provided Congress with a "secret report" on the operation of sanctions, but did not make this information public.

GarryB wrote:Haven't you been keeping track of the Davos international trade forum... Trump says the positive world economy at present is because of him... hahahahha

kvs wrote:
Russian pundits are one-note-Johnny pessimists.   He is forgetting about the massive, on-going railway projects.

Based on the objective evidence so far, it is clear that Putin is using mega-projects to stimulate the Russian economy.   But Putin
is not willing to blow the budget on white elephants.    I think Putin is 100% on target.   Having the GDP dependent on massive
state spending is faking the economy, just like the popular near zero interest rates and QE in the west.   You get bubbles and not
real growth.   So this "conservative" is a bit of an idiot if he thinks that Russia needs to splurge on mega-projects.   All mega-projects
run out.   At least with Putin's approach they are dosed on moderation and are not going to stop any time soon.  

Moscow. January 29. INTERFAX.RU - State agencies of various levels in 2015-2016. and in the first half of 2017, instead of fulfilling their powers, they purchased works, services, the performance of which relates to the powers of the authorities. The volume of these purchases amounted to about 14 billion rubles, the Accounting Chamber said.

"Currently, the legislation of the Russian Federation does not regulate the scope and cases of involving third-party organizations in the activities of government bodies, including with regard to the exercise of their powers," the normative legal acts also do not establish criteria that determine the ability of government agencies to purchase work and services, the performance (rendering) of which is provided for them by state tasks ".

According to the Chamber of Accounts, for 2.5 years the state bodies of the federal level have purchased goods, services to fulfill their powers for 8 billion rubles. Regional and municipal authorities spent about 600 million rubles for these purposes.

In addition, the government transferred subordinate or third-party organizations the execution of government projects, for which the volume of subsidies amounted to 5.7 billion rubles.

According to the assessment of the RF SP, the largest number of cases both of the transfer of powers and state assignments was met in the practice of the Ministry of Energy (about 2 billion rubles) and the Ministry of Industry and Trade (2.9 billion rubles). The same departments have the largest amount of "authorized" purchases.

At the same time, the Chamber of Accounts emphasizes that in a number of cases departments instructed outside organizations, including foreign ones, to prepare separate draft orders and government acts, in particular, affecting the activities of the fuel and energy complex, industrial clusters, technoparks, etc.

"The participation of foreign organizations in the legal regulation and development of strategic documents in the fuel and energy sector can not be considered as appropriate to the national interests of the Russian Federation," said auditor Maxim Rohmistrov, whose words are contained in the materials of the Accounting Chamber.

According to the assessment of the joint venture, the involvement of government agencies of third-party and subordinate organizations to implement their powers is not episodic, but systemic. "The unsettledness of this problem creates the risks of double spending budget funds, the impact of private organizations on public policy, information preferences for individual organizations, corruption risks and the possibility of information leakage," the report says.

To solve this problem, the Chamber of Accounts proposes to analyze the authorities of state bodies and their division into "main" and "providing". Also, the proposal of the joint venture provides for the formation of a list of specific powers of state bodies that should be implemented directly by state authorities and a list of powers that can be transferred to third parties in the procurement process.

The Collegium of the RF SP will forward submissions on the revealed facts of the Ministry of Energy, the Ministry of Industry and Trade, the NCCTT of the Ministry of Transport of the Russian Federation, as well as an appeal to the RF Prosecutor General's Office and information letters to the Control Office of the President of the Russian Federation, the FAS Russia, the Federal Treasury, the Ministry of Transport of Russia, and the report to the chambers of the Federal Assembly .

MOSCOW, January 24. / TASS /. Financing of scientific military development should be 1% of the state program of armament, or about 20 billion rubles a year. This was stated at a press conference on Wednesday by the President of the Russian Academy of Sciences Alexander Sergeyev.

miketheterrible wrote:Why am I not surprised that ministry of energy and industry and trade are spending money like it's nothing and handing their work off to third parties, even foreign? These two ministries have been horrible in their planning and engagement.

Hope after elections, a lot of these people are begging for change in their next jobs.

According to the document, tokens and other digital financial assets can be changed into rubles, foreign currency and other assets only through the operator of the exchange of digital financial assets

The vice-premier of the Russian government said that decisions to protect the export of Russian weapons are already being taken

Already, decisions have been made that will help to protect the export of Russian arms in connection with the publication of the Kremlin's list, since the United States will pressure sanctions on buyers of Russian defense products. This was stated by Deputy Prime Minister of Russia Dmitry Rogozin, Tass reports.

"As for the pressure on our partners, this is also debatable, decisions have already been adopted that will protect the export of Russian weapons," Rogozin told journalists.

The vice premier also linked the composition of the "Kremlin list" of the United States with their "selfish" economic interests.

"In terms of military-technical cooperation, we basically assumed that the pressure will be not so much on us as on buyers, and the pressure is accompanied by the offer of their own services, their own goods." That is, it does not look all that beautiful, like an extremely unfair competition, "Rogozin added.

Speaking about the "Kremlin list" published in the US, he said that he had nothing to comment on in this regard, "I have been on these lists since March 2014". "In principle, the attitude [to the list] is indifferent, it just all looks quite hostile and, as I said, pursues such an economic shaman in everything." It's not just sanctions to make Russia bad, it's also sanctions to do badly, with whom we cooperate to make them forcefully be nice, "said the Deputy Prime Minister.

He added that Russia will be forced to develop "certain measures to neutralize this pressure."

Before the reserves are invested in new projects, it is necessary to create a sufficient airbag that would allow the country to exist painlessly for three years regardless of the market situation and sanctions pressure, the minister said.

"I think that the total amount of funds that we need to accumulate in the NWF, not involved in infrastructure projects, should be at least 7%, and maybe more - so that we can finance our commitments within three years regardless of how the situation in the world commodity markets will develop, or with [sanctions] restrictions, or with the outflow of capital, "Siluanov stressed.

Kimppis wrote:Siluanov promised to turn Russia into a "second Norway"

Before the reserves are invested in new projects, it is necessary to create a sufficient airbag that would allow the country to exist painlessly for three years regardless of the market situation and sanctions pressure, the minister said.

"I think that the total amount of funds that we need to accumulate in the NWF, not involved in infrastructure projects, should be at least 7%, and maybe more - so that we can finance our commitments within three years regardless of how the situation in the world commodity markets will develop, or with [sanctions] restrictions, or with the outflow of capital, "Siluanov stressed.

What does that actually mean? 3 years worth of... imports? Which would be something like $600-800 billion. And that is course more than 7% of GDP, so I don't know what he means by the "7%" part...

Kimppis wrote:Siluanov promised to turn Russia into a "second Norway"

Before the reserves are invested in new projects, it is necessary to create a sufficient airbag that would allow the country to exist painlessly for three years regardless of the market situation and sanctions pressure, the minister said.

"I think that the total amount of funds that we need to accumulate in the NWF, not involved in infrastructure projects, should be at least 7%, and maybe more - so that we can finance our commitments within three years regardless of how the situation in the world commodity markets will develop, or with [sanctions] restrictions, or with the outflow of capital, "Siluanov stressed.

What does that actually mean? 3 years worth of... imports? Which would be something like $600-800 billion. And that is course more than 7% of GDP, so I don't know what he means by the "7%" part...

GunshipDemocracy wrote:@Austin : why do you think he is an idiot? he is carrying out Putin's orders, and keeps monetary policy on low risk level. No social shocks, slower development but balanced balance sheet.

Austin wrote:

GunshipDemocracy wrote:@Austin : why do you think he is an idiot? he is carrying out Putin's orders, and keeps monetary policy on low risk level. No social shocks, slower development but balanced balance sheet.

Putin does not understand economy and takes path to least resistance , what Russian Finance ministry is doing is just taking the easy way out.

Any self respecting nation with the sanctions that is now imposed on Russia would have atleast long dropped buying US T bills and reduced its interest rates for easy lending and stopped stopped free flow of capital and full capital account convertibility.

What Putin is doing is just doing a band aid job and sooner or later his day of reckoning will come