Russian Economy General News: #11

The first signal of default: 25 years ago there was a powerful collapse of the ruble in the modern history of Russia

https://russian.rt.com/business/article/676072-chyornyj-vtornik-rossiya

Bank of Russia believes improper to completely reject dollar in international reserves

Russia sold a considerable portion of its dollar-denominated reserves last year after a new round of US sanctions and increased settlements in alternative currencies

MOSCOW, October 14. /TASS/. The Bank of Russia does not consider prudent to completely abandon the dollar in international reserves, department director Alexei Zabotkin said in the State Duma [lower house of the Russian parliament - TASS] on Monday.

"From my personal point of view, complete exclusion of the dollar from [international] reserves is associated with excessive risks," he said.

The whole range of liabilities is nominated in dollars, including the state debt, Zabotkin said. "Therefore, gold and currency reserves will be needed in a bad situation, when we have a dramatic worsening of the payment balance and budget revenues and when it will be required to settle such liabilities at the expense of funds in the budget, for example, transfers at the expense of the National Wealth Fund. It will be better if assets also denominated in dollars are against a portion of such liabilities in this case. In other words, it is probably wrong to completely reject the dollar in gold and currency reserves," he added.

Russia sold a considerable portion of its dollar-denominated reserves (about $100 bln) last year after a new round of US sanctions and increased settlements in alternative currencies, having bought the euro and the yuan in the amount of about $90 bln, the Central Bank said in its annual report earlier.

The share of the dollar in reserves dropped from 45.8% to 22.7%. The yuan share increased from 2.8% to 14.2%. The share of the pound sterling declined from 8.3% to 6%. The euro share rose from 21.7% to 31.7%. The share of gold rose by 0.9 percentage point to 18.1% as of the 2018 year-end.

https://tass.com/economy/1083011

George1 wrote:

Bank of Russia believes improper to completely reject dollar in international reserves

Russia sold a considerable portion of its dollar-denominated reserves last year after a new round of US sanctions and increased settlements in alternative currencies

MOSCOW, October 14. /TASS/. The Bank of Russia does not consider prudent to completely abandon the dollar in international reserves, department director Alexei Zabotkin said in the State Duma [lower house of the Russian parliament - TASS] on Monday.

"From my personal point of view, complete exclusion of the dollar from [international] reserves is associated with excessive risks," he said.

The whole range of liabilities is nominated in dollars, including the state debt, Zabotkin said. "Therefore, gold and currency reserves will be needed in a bad situation, when we have a dramatic worsening of the payment balance and budget revenues and when it will be required to settle such liabilities at the expense of funds in the budget, for example, transfers at the expense of the National Wealth Fund. It will be better if assets also denominated in dollars are against a portion of such liabilities in this case. In other words, it is probably wrong to completely reject the dollar in gold and currency reserves," he added.

Russia sold a considerable portion of its dollar-denominated reserves (about $100 bln) last year after a new round of US sanctions and increased settlements in alternative currencies, having bought the euro and the yuan in the amount of about $90 bln, the Central Bank said in its annual report earlier.

The share of the dollar in reserves dropped from 45.8% to 22.7%. The yuan share increased from 2.8% to 14.2%. The share of the pound sterling declined from 8.3% to 6%. The euro share rose from 21.7% to 31.7%. The share of gold rose by 0.9 percentage point to 18.1% as of the 2018 year-end.

https://tass.com/economy/1083011

its a good thing his personal opinion is worthless.

Big_Gazza wrote:

miketheterrible wrote:its a good thing his personal opinion is worthless.

Agreed.  What a despicable 5th columnist wretch.

The chopping block has been set. Many liberalists have been arrested for corruption. Many more should. Hopefully soon many of these deputies will be fired as well since the Russian government mentioned that there will be cuts and downsizing of the government as there are far too many officials as is.

Russia, UAE sign agreements totaling $1.4 bln

The Russian president recalled that the Mubadala Emirates fund is one of the first partners of the Russian Direct Investment Fund, with whom they have implemented more than 45 projects worth $2.3 bln

ABU DHABI, October 15. /TASS/. Russia and the United Arab Emirates signed agreements worth $1.4 bln in the course of President Vladimir Putin’s official visit to the UAE.

"Investments are to be made in petrochemistry, transport, and medicine. New deals have been closed today. These are projects worth about $1.4 bln, and they cover a wide range of industries," the Russian leader said at a meeting with business representatives of the two countries.

Putin noted that Moscow welcomes the UAE's investment in the Russian economy. He recalled the Mubadala Emirates fund is one of the first partners of the Russian Direct Investment Fund (RDIF) and together they have already implemented more than 45 projects worth $2.3 bln.

"The return on these investments is significant, sometimes it is three times higher than global standards," the Russian president stressed.

According to him, the industrial cooperation between Russia and the UAE is also gaining momentum.

"We welcome our Emirates friends' entry into the share capital of the company, the manufacturer of executive Aurus cars. We are doing and will do all that is necessary to make investors, including those from the United Arab Emirates, feel comfortable in our market," Putin concluded.

https://tass.com/economy/1083342

And yesterday they signed $2B with Saudi Arabia. With a total of over $10B in signed agreements.

Pretty good.

miketheterrible wrote:And yesterday they signed $2B with Saudi Arabia.  With a total of over $10B in signed agreements.

Pretty good.

What about US sanctions? KSA and UAE are US vasal states… This last week really bring a lot of changes. I hope this Putin's tour will also bring the start of the process to end the war in Yemen.

Should be interesting to see Trumps spin on this... murdering Washington Post reporters in their embassies is OK because they buy a lot of weapons from the US... is buying weapons from Russia going to be OK too or is that just crossing a line....

GarryB wrote:Should be interesting to see Trumps spin on this... murdering Washington Post reporters in their embassies is OK because they buy a lot of weapons from the US... is buying weapons from Russia going to be OK too or is that just crossing a line....

You can't be naive enough to believe that the Saudis would murder someone in their own Embassy, they are stupid but not that stupid. The whole "killed in the Embassy journalist", was just to get the Saudis to do something the Saudis did not want to do but from the results the Saudis did what they did not want to.

miketheterrible wrote:And yesterday they signed $2B with Saudi Arabia.  With a total of over $10B in signed agreements.

Pretty good.

It says a lot about quality of Russian diplomatic service that manages to be on good terms with so countries at the same time.

You can't be naive enough to believe that the Saudis would murder someone in their own Embassy, they are stupid but not that stupid.

These are the guys who payed good money to see videos of infidels getting their heads cut off... terrorists around the world do that and film it because they know they will get good money for it from Saudi princes.

They did it in the Saudi Embassy in Turkey because they knew he was not stupid enough to fly back to Saudi Arabia to get permission to marry.

They sent an entire hit team to Turkey... there were about 15 people... which includes a kill squad and a clean up squad... probably about guys each... so who are the other 5 guys and what are they doing? They are filming the live dismemberment of an enemy of the Saudi leader for his entertainment...

He was filmed by Turkey going in and no evidence he walked out... that filming wasn't done by Saudi Arabia, that was done by Turkey who have no reason to be nice or to protect Saudi Arabia.

It says a lot about quality of Russian diplomatic service that manages to be on good terms with so countries at the same time.

Treat people with respect and don't demand they conform to your morals or needs... agree where there is common ground and agree to disagree where there isn't.

Not rocket science.

GarryB wrote:

You can't be naive enough to believe that the Saudis would murder someone in their own Embassy, they are stupid but not that stupid.

These are the guys who payed good money to see videos of infidels getting their heads cut off... terrorists around the world do that and film it because they know they will get good money for it from Saudi princes.

They did it in the Saudi Embassy in Turkey because they knew he was not stupid enough to fly back to Saudi Arabia to get permission to marry.

They sent an entire hit team to Turkey... there were about 15 people... which includes a kill squad and a clean up squad... probably about guys each... so who are the other 5 guys and what are they doing? They are filming the live dismemberment of an enemy of the Saudi leader for his entertainment...

He was filmed by Turkey going in and no evidence he walked out... that filming wasn't done by Saudi Arabia, that was done by Turkey who have no reason to be nice or to protect Saudi Arabia.

It says a lot about quality of Russian diplomatic service that manages to be on good terms with so countries at the same time.

Treat people with respect and don't demand they conform to your morals or needs... agree where there is common ground and agree to disagree where there isn't.

Not rocket science.

Everyone will have their own opinion but I think that whole thing was set up.

Russian government to prepare "more ambitious" privatization program

First Deputy Prime Minister and Minister of Finance Anton Siluanov said that the government must once again compile a

WASHINGTON, October 19. /TASS/. The Russian government will soon begin preparing a "more ambitious" privatization plan, First Deputy Prime Minister and Minister of Finance Anton Siluanov said on the sidelines of a meeting of the International Monetary Fund (IMF) and the World Bank.

"Indeed, we have relaxed a bit because we don’t need money, and the ministries all have on their even small shares in companies and want to manage them," Siluanov said.

According to him, the government must once again compile a list of state assets that Russia maybe does not have to keep. "The list of investments that are not determinant, that are not key for our country, I mean, maybe, oil and gas or the banking sector," he said.

Earlier, Siluanov said that it was not planned to include Russian Railways, Aeroflot and Channel One in the new privatization plan for 2020-2022.

https://tass.com/economy

^^ Bad decision if the decide for privatisation of key economic assets, like oil and gas. WTF have Russia to do with recomandation of WB and IMF, everyone know these institution serve US.

Everyone will have their own opinion but I think that whole thing was set up.

Set up by who?

If the guy wasn't killed then where is he?

Even the Americans admit the Saudis killed this guy... but while the Saudis spend money on US weapons they don't give a shit.

^^ Bad decision if the decide for privatisation of key economic assets, like oil and gas. WTF have Russia to do with recomandation of WB and IMF, everyone know these institution serve US.

Privatisation leads to the richest people owning things that will make them even richer... it is always bad.

People who blub on about state run companies being inefficient... who gives a fuck... healthcare and education should not be run as a company and don't need to make a profit... what they need to do is provide a good service to everyone in the community... any private company will only think of saving money and reducing costs and increasing profit... the last thing you want when you need medical help.

BTW if free market economies are so good for business models and controlling behaviour then why is the western media so fucked up and why do banks need special treatment and indeed would America be a better place if 5 or 6 people didn't own everything.

Privatizing RZD should be grounds for a treason trial and impeachment. Let's make a gloriously functional public company that
returns its profits to the taxpayer and then unload it for a fixed, one-time sum to private owners on a sliver platter. Maybe the
government should also commit to offsetting any losses by the new private bosses too. You know, support for private initiative
and all that jazz.

Take a look at what that twat Thatcher achieved with her privatization of the British railway system during the 1980s. More
crashes and corner cutting at necessary investment. Competition between capitalist urchins does not result in better management.
It results in asset stripping and low bid maintenance in addition to layoffs, union busting and cutbacks in pensions, benefits and
wages. Privatization has resulted in dramatic reductions in service and more "accidents".

Privatizing RZD should be grounds for a treason trial and impeachment. Let's make a gloriously functional public company that
returns its profits to the taxpayer and then unload it for a fixed, one-time sum to private owners on a sliver platter. Maybe the
government should also commit to offsetting any losses by the new private bosses too. You know, support for private initiative
and all that jazz.

Take a look at what that twat Thatcher achieved with her privatization of the British railway system during the 1980s. More
crashes and corner cutting at necessary investment. Competition between capitalist urchins does not result in better management.
It results in asset stripping and low bid maintenance in addition to layoffs, union busting and cutbacks in pensions, benefits and
wages. Privatization has resulted in dramatic reductions in service and more "accidents".

X2.

Not to mention any enlarged profits from those companies going into the pockets of often foreign investors and not the public fund to spend on infrastructure and retirement funds etc.

They enlarge the profits by selling of company assets and then hire those assets back to save money which they keep for themselves and claim back the part of the hiring costs in reduced taxes. They fire half the workforce and make the remaining workers work twice as hard for not much more money... exploiting the workforce and making a lot of people unemployed.

Quality of service goes down because corners are cut and workers are doing the job two or three people used to do, so errors are so likely.

Here in New Zealand the pattern was to reduce funding to various state owned enterprises and when there was problems call it mismanagement and sell it off for a quick buck to make the current budget balance, but the loss of future earnings means it is a one off hit of funds and in future the yearly profit of the company often matches the sale price, but instead of that money going in to the state coffers it normally heads off shore to the new owners of the business.

Siluanov told in the USA how Russia will occupy under sanctions on a public debt

https://ria.ru/20191019/1559969302.html

Privatisation is not a bad decision , They need not make 100 % private but sell some percentage of share with majority of share remaining with government like Aeroflot which is now rated in top 3 airline in Europe.

Selling Non-Core/Critical sectors to Private Big Russian companies would be a good decision , Start with 20-25 % sell and see how it works.

In India we have some success in doing this and many companies have become more efficient.

Austin wrote:Privatisation is not a bad decision , They need not make 100 % private but sell some percentage of share with majority of share remaining with government like Aeroflot which is now rated in top 3 airline in Europe.

Selling Non-Core/Critical sectors to Private Big Russian companies would be a good decision , Start with 20-25 % sell and see how it works.

In India we have some success in doing this and many companies have become more efficient.

Privatization is a scam. The only time it makes any sense if it is really not viable for the government to be the owner. But I would
like to see a list of such business types that the government can't handle.

The only "privatization" that is good is the type that bootstraps itself into existence. For example, startups such as Apple Computer. Government
owned business is not allowed to kill off private competition, so private companies are free to enter the market and show us all how good they
are. In fact, it is the presence of government run companies that is the only way to keep the market "clean" and not some mafia style carve-up
between profiteers.

The corrupt and incompetent Spets-stroi is being replaced by a unified, military run company. Clearly, the Russian government is on
the ball when it comes to the reality of capitalism. The heavy hand of the state is necessary to

1) Get things done for the planned amounts and over the planned time-frames.

2) Put the fear of God into the profiteers who think that they can do whatever the f*ck they want, like Khodorkovsky.

The federal government must also impose Draconian measures on various local governments to crush any profiteer driven
corruption. That is the sort of racket that has taken over the west and most of the world. Big companies always buy
local politicians and in most parts the top national politicians as well. Russia is in the magical transition state where
the elected government can actually call all of the shots and is not some used condom of the capitalist deep state.

Privatisation is a real scam and hurts countries.

A national airline provides transport infrastructure to a country and one of the expectations is for it to carry the cost of non profitable routes to provide an air service for people in your country. To carry that cost they need to make a profit in other places, but their requirement to support all locations means they can never be as competitive as a private airline that can pick and choose the high profit high traffic routes and ignore the other customers in far flung places.

The private airlines will whine at all the advantages and support the national airline gets and then some bright spark will suggest privatisation will fix the problem.

It never does.

Eventually you have foreign owned national airlines that drop unprofitable routes... which makes sense for a private company, but is pretty shit for the people who funded the damn airline in the first place so they could get reliable regular flight access to the rest of the country and other countries.

Generally in order to privatise they often start by reducing its funding and putting restrictions on it that make it unprofitable and then they say it is unprofitable because it is state run and run badly and so the best solution is to privatise it... and whoever buys it makes a fortune selling off most of its assets and then leasing them back... firing half the staff and making the staff that remain sign new contracts... longer hours and less pay... which negatively effects service too but it is a private company so now it is ignored... and then they run it for a couple of years and extract as much profit out of it as they can and then sell it on for vastly more than they paid for it of course.

Privatisation is a scam... it happened in the 1990s in a range of areas of industry and business where otherwise competitive businesses were destroyed and pension funds stripped like a bull elephant in a tank full of piranha... but with much more blood and suffering... welcome to democracy... the factory you worked at for 30 years and your father and mother worked there too is firing you all and no you can't have your pensions because they are gone... don't you love the west and democracy? You are now living the dream. A nightmare is a kind of dream.

This is the "commanding heights" of monetarist BS. Whenever you hear a monetarist or one of their media shills yap about inefficiency
that is crypto-speak for "not enough profit for certain interested parties". All these supposed free marketeers endlessly yammer about
the "free market" but don't even know what one is. It is the ideal limit of many competitors making nearly zero profit. That's right
the profit goes to zero when the market becomes really competitive and the consumers get the best prices. But you will never see
Wall Street or its clones ever consider a company making marginal profits or even zero profit (not negative profit) as viable. If it
has public shares then they will be treated as junk. So the present-day capitalist order is all about oligarchy and oligopolies. As long
as they are not owned by the taxpayers. When taxpayers are getting the benefit, then all of the sudden the bleating starts about
free markets and "efficiency". Your example of a national airline shows this clearly since by subsidizing unprofitable routes it is
reducing its total profit. And as we can see profit is "job one" for modern private companies.

In Canada we had the case of monetarist drone Mike Harris privatizing the taxpayer owned power utility Ontario Hydro. It had
hydro-electric, nuclear and fossil fuel power plants plus their distribution system. Harris carved this one viable and profitable
company into three separate parts and privatized them:

1) The debt accumulated by Ontario Hydro was not offloaded onto the new private owners but onto the public, all $30 billion Canadian
dollars of it. The debt was to a large extent due to the over-budget (i.e. corrupt) construction of the Darlington nuclear power plant
which cost twice as much as it was "bought" for.

2) The new power generation, distribution and I forget some other company did not deliver better service and rates, instead prices
started to increase since, unlike before, the shareholders needed dividends. So a company that did its job without scamming
the taxpayers for decades was turned into a shareholder/owner money making operation.

It is interesting that Japan and South Korea do not really have western style corporations and instead have pseudo-national
conglomerates. Nominally they are not owned by the government, but they at least acted as if they were and served the
national interest. Russia has created a hybrid economy where state ownership of autonomous companies prevents them
from being destroyed and serves the national interest. UAC, USC, etc. were a Japan-Korea like move to collect pieces that
were struggling and made them viable as a conglomerated entity. Russia is going down the right road and should ignore
all the advice from Kudrin and other monetarist swine.

I know exactly what you mean kvs.

When the New Zealand power grid was run by the government, we had some coal fired power stations in the far north but most of our power was hydro electric from the south island. When it was all one organisation when the hydro lakes were full we shut down the coal plants and just had clean power. If there was a drought and the lakes started to get a bit low we could start up a coal fired power station to take up the slack... minimising the coal we burnt for power to a minimum.

Then we privatised it and now the coal fired power station is privately run so they don't make money when it is not burning coal so they never shut it down... progress... and power costs more.