Russian Economy General News: #12

5% growth this year, 4% next year, and an average of 4% for the rest of the decade

That's what Russia needs. And if the govt doesn't fulfill that, then they're lame. They have everything they need. Only worry is rising inflation and the possibility of the economy overheating - for the later they have only themselves to blame with their draconian limits and impositions on migrants throughout the pandemic.

As it is, oil/gas prices have shot up, the service sector has recovered, and there are tons of investments into industry and infrastructure. After falling 3% last year; by all rights they should reach 5% this year.

kvs wrote:Maybe Russia has more state owned enterprises compared to the USA but fundamentally it is a market economy and not centrally
planned.   So the only thing that the government can do is to maintain a viable macro-economic policy.   It does not control the
percentage of growth aside from sabotaging it with comprador shenanigans.   There is no indication that the macro-economic policy
under Putin is any sort of fail.   It has been a success for the last 22 years.   This is evidenced by a slew of metrics from increasing
real wages to increasing average lifespans accompanied by declines in alcoholism and various pathologies that set in late in the
USSR period and the 1990s.
The NATzO sanctions spasm after 2014 has set Russia on the right path in terms of domestic growth.   Marco-economic distortions
left by Yeltsin have finally been rectified or are in the process of being rectified.    This is why the EU is crapping its pants at the
WTO.   The post 2014 import substitution has really stimulated Russian SMEs.    The only real problem left is the monetarist
clowns infesting the CBR and the Ministry of Finance.  But they are in a small box and have failed to sabotage Russia's economic
revival.

Well, yes and no.
The biggest pressure on the long-term investment plans is put on giant companies, that are under governmental control.
Novatec, Gazprom, Rosatom, RŻD, Rosneft ... All of them have their piece of cake to get but must pay for it first.
Along, there is an RDIF, cumulating the cash from the welfare fund.
Check the official Sputnik V site, you will be amazed how many joint ventures they finance with that single product only. I was shocked.
There are state funds allocated to targeted programs.
So in reality, the Russian govt has a huge influence on the overall execution of economic goals.
But as you are right and Russia is a market economy just the way any other social welfare state would have been, ie. Norway, Germany or France, influence the market with help of different assets rather than central steering.

Russian product has flooded the largest market in the world, 29.07.2021.

MOSCOW, July 29 - RIA Novosti, Irina Badmaeva. In terms of beef exports to China, Russia has overtaken Australia, Argentina and Brazil. And deliveries are likely to continue to increase over the next five years. Does this not threaten domestic consumption - RIA Novosti figured out.

The Chinese got a taste of Russian beef

The Center for Industry Expertise (SEO) of the Rosselkhozbank reported that in the first quarter, China purchased 3.7 thousand tons of Russian beef - 20 times more than a year ago.

The share of the PRC in the total export of cattle meat (cattle) exceeded 55 percent. In total, Russia sent 6.5 thousand tons abroad in January-March, almost two and a half times more than in 2020.

In China, its own pork production has decreased: the African plague has crippled it. In addition, preferences are gradually changing. The market has opened up to foreign manufacturers.

However, they ran into problems. In Australia, because of the pandemic, seven meat factories have stopped. Exports were suspended in order to revive the livestock. Argentina has cut supplies by 50 percent: it is necessary to contain prices in the domestic market.

In Brazil, back in 2017, several dozen agricultural enterprises were closed due to non-compliance with sanitary conditions. By the way, Brazilian butchers have often found themselves in the center of scandals. A growth biostimulator - ractopamine - and salmonella bacteria were identified in their products. This damaged the reputation of the companies.

As a result, Russian beef has appeared on Chinese tables. Prior to that, negotiations on trade cooperation continued for seven years. We mainly shipped products to neighboring countries.

“The high rates of export growth in the first quarter are explained by the effect of a low base and a competitive price,” explained Andrey Dalnov, director of the Center for Economic Analysis of Rosselkhozbank.

The need for imports from China will remain for at least another five years. "This means that supplies will continue to grow. Accordingly, and incomes," - said the chief economist of the information and analytical center TeleTrade Mark Goykhman.

Hong Kong imported 234 tons from Russia in January - March, Uzbekistan - 256, Saudi Arabia - 497. We started trading with Hong Kong back in the dock 2019. When mainland China opened, the "entry point" to the Asian market was not changed.

Domestic producers are actively exploring the Middle East. In addition to the Saudis, the priority is the United Arab Emirates and Qatar.

"The growth in the export of this type of meat will allow maintaining production. It will provide investment attractiveness in the long term," says Svetlana Panasenko, head of the basic department of trade policy of the Plekhanov Russian University of Economics.

Ukraine (78 tons), Vietnam (415 tons) and Ghana (295 tons) showed negative dynamics.

Don't need someone else

It is believed that Russia gave up imported food, in particular meat, in 2014. In fact, the process was launched in 2012, when the state program for the development of agriculture was adopted and the interest on investment loans in the agricultural sector was partially compensated.

Of course, anti-Russian sanctions accelerated matters. But measures against dependence on foreign products were already in place. As a result, Russia restored animal husbandry. From 2014 to 2020, purchases abroad in kind decreased threefold, the Ministry of Agriculture notes. First of all - pork and poultry. And our own production is enough for export.

However, the existing balance was upset this year. According to the Federal Customs Service, in January-April, Russia purchased meat by almost 20 percent less than in the same period of 2020. Import - 77.6 thousand tons. At the same time, sales abroad for some items increased fivefold.

The explanation is simple: demand and prices are increasing in the world. Moreover, less and less beef is bought on the domestic market. Therefore, domestic companies have reoriented themselves.

Cattle meat production has been growing since 2018. Even now, amid a pandemic and a drop in real incomes of the population, the dynamics are positive. The indicator for the first quarter is 314 thousand tons. In agricultural enterprises, an increase of one percent, up to 139.4 thousand tons. In farms - by eight, up to 32.4 thousand tons.

"In Russia, the annual demand for beef reaches 1.94 million tons. Export is 20 thousand, that is, a little more than a percent. Therefore, you should not worry that supplies to China will lead to higher prices in stores. There will be no shortage," Svetlana Panasenko emphasizes. ...

Unlike the Chinese, Russians prefer cheaper chicken and pork. About 17 percent buy beef. And in the world, demand is slightly higher - about 20.

As for prices, according to Rosstat, in 2020 the price of meat rose slightly: by two to three percent. But the pace has increased. In the first half of the year, pork added 6.7 percent, beef - 5.6 percent. And chicken is ahead of all - almost 13 percent. A deficit has arisen due to the outbreak of avian flu. Plus, there are problems with the supply of foreign hatching eggs, increasing the price of feed.

However, poultry and pork production is profitable quickly. It is much more expensive to raise cattle. A significant share of the livestock is concentrated in personal subsidiary plots, and there are fewer and fewer of them. Large agricultural holdings are reluctant to enter this segment. The payback period for a project from scratch is ten to twelve years.

The current cost of beef does not allow production to be sufficiently profitable. Therefore, farmers will be forced to raise prices. It is predicted that by 2030 this type of meat will rise in price by 10-15 percent.

https://ria.ru/20210729/produkt-1743306236.html

Seems they have heard him, exporting everything, with a diversification he could hardly imagine being in charge

Just let him die nameless.

As a one-person jury and reviewer, you must be more omnipotent than all the others mentioned, combined
Salute to you!

When you start with so high C singing, there is a chance that your voice won't last until the end of the performance
You are way too serious, just the same way as many other members here, seeking conspiracies.
You know shit about the experience and profession of most of the members.
It might be a Shoigu himself hidden behind some account
Sure some guys pretend to know what is inside a black hole, but hey, this is their problem, not yours, right?
You can find armchair generals, strategists, unrecognized Noble prize should-be-winners everywhere.
This place is hardly challenging for that matter.
At least, most of the people are literate and if someone does not understand basic English, there is a chance he is from the US rather than India.
Or maybe we all have this problem, as for most of us English is not a native?
I personally find as extremely valuable the chance to hear what members from the opposite side of the planet have to say.
Their opinions are refreshing, they are closer to the core of some subjects, have the local language knowledge we lack and can share the conscript of the real situation out there.
I read that with great respect and curiosity.
Would not dare to "explain" folks from Oceania or South America, how things are running there. Never been to. But read what they are saying carefully.
Screw Kudrin.
He had his five minutes in history, but now he is commenting on the things that are running in another universe. Now, he lost his chance to be quiet. He is just the same way armchair general, as you accusing the other members.

Nomad5891 wrote:
Anyways back on topic, even a dumb troll like me knows that without competition of free market a company can not create an innovative product. And this is all that  "traitor" Kudrin is saying. In order for Russian economy to really grow and expand it should move from the domestic market to the export market where actual free market and cash is. Then and only then Russian companies will be able to achieve a product that could bring outside fresh money and investments. So they can grow even more and create even better products. And if this goes on and on then some happy day you may have a USA housewife using a Russian made cellphone, a German carpenter driving arround a Russian made van and a French restaurant serving Russian wines to guests clothed in Russian made clothes.
Is this so hard to gasp?

Except that won't ever happen

Because it's not really a free market. It's a dog eat dog market. It's a survival of the fittest market.. and any measure goes..
The ones who advocate a 'free' market are the ones with the strongest economies and so essentially suggest to everyone else to drop their own protectionist policies towards their own industries, their own import tariffs, their own safety/environmental/technical standards even, adopt all the 'free market' ones instead, and the ones of the 'world trade organization', in which said countries have dominant influence, and carry out reforms suggested by the 'world bank', and stop giving government tenders to just your own companies; allow 'international' companies to bid for them as well.

It's all just word games.

In reality their cellphones, vans, wines and clothes are either their own produced in their own countries, or produced in 3rd countries but by their own companies.

When the company of a 3rd country tries to sell them something however, one that's not part of the clan or the extended clan, that's when they get chased out like Huawei was. Or the same Opium Wars against China 150 years ago over much the same thing. The methods have changed somewhat, but the motivation and behavioural impulses haven't.
To some extent they will follow their own principles of course, and buy Russian robots like the Promobot that American companies are buying up now, or Russian rocket engines, but only either as a matter of necessity, as a joint-business venture, or while they're sure that the 'free trade' situation still benefits them and their own companies overall. The moment it doesn't, is when a figure like Trump comes along and starts instituting protectionism and bringing industries back to native shores.

And this isn't so much an indictment of the West, as it is of capitalism on the whole.
Lately China has been the one, to advocate globalist free trade more and more, while the West is growing colder on the issue now that they've seen the economic behemoth their own trade policies have helped grow..

What's Russia to do in this situation?
Well, focus on the countries that are receptive to its goods and expand in their markets, sell the stuff to the West that its ready to buy and ignore it for what it's not, integrate with other ex-Soviet states and their markets & industries, get a foot in the other door by participating in the BRICS bank and other alternative initiatives in addition to the 'world' and 'international' ones, but above all build for internal demand; the internal market of the country is viable enough to turn a large profit as it is.

Don't be so sure about that, bro.
Russian-made equipment is being delivered all over Europe, but we hardly notice that.
Tons of cars being sold in the EU market are the ones produced in Russia. For example, Skoda.
The same applies to car parts, engines, gearboxes etc.
Russian agricultural machines are doing double-digit sales increase in all EU countries with developed agriculture, like France, Germany and the Netherlands
With increasing numbers of Ukrainians all along with the EU, some pressured demand for Russian brands appeared, too.
I have already spotted Russian sweets in Polish shops.
Russian vodka is being sold in a regular manner for years, it is even being counterfeited.
Russian-made machines are delivered to the companies as well. Cranes, excavators, this kind of stuff.
And remember, that we are talking about covid times, and sanctions ...

ALAMO wrote:Don't be so sure about that, bro.
Russian-made equipment is being delivered all over Europe, but we hardly notice that.
Tons of cars being sold in the EU market are the ones produced in Russia. For example, Skoda.
The same applies to car parts, engines, gearboxes etc.
Russian agricultural machines are doing double-digit sales increase in all EU countries with developed agriculture, like France, Germany and the Netherlands
With increasing numbers of Ukrainians all along with the EU, some pressured demand for Russian brands appeared, too.
I have already spotted Russian sweets in Polish shops.
Russian vodka is being sold in a regular manner for years, it is even being counterfeited.
Russian-made machines are delivered to the companies as well. Cranes, excavators, this kind of stuff.
And remember, that we are talking about covid times, and sanctions ...

Key sentence is your last one

In practice, every measure has been taken to limit Russia's development, apart from those measures that would cause Europe more harm than acceptable

Russia's relative export success is a function of the laws, regulations and economic structure in place. But all those same things still ensure a much higher amount of value-added European exports to Russia than vice-versa.
Most Russian exports to Europe still consist of natural resources of one type or another.

Yet if Russia continues in the revival & modernization of its industrial-economy, and continues to progress in the high-tech fields, then I predict rather more interesting times ahead. Europe, Germany views all that stuff ultimately as competition for its internal or foreign markets.

I do agree more with your arguments than GarryB's ones in that other thread. But at the same time I rather share his pessimism, than your optimism

What did WW1 start from, if not from competition.
We probably won't see a global conventional war like that one again, but for sure there will be all sorts of tricks in play.