Russian Economy General News: #13

The analyst spoke about the prospects of the digital ruble, 01.09.2023.

Analyst Bykov: those who install special software will be able to use the digital ruble.

Those who install special software (software) by analogy with similar applications will be able to use the digital ruble (pay for services, transfer or accept transactions), Anton Bykov, a senior analyst at Esperio, told Izvestia on January 9.

He called a feature that the developer is the Central Bank. This results in a higher level of control over end users.

“Somehow, people’s lives should not change significantly, since the digital ruble will have to be integrated with banks for ease of use, and then appear on the main marketplaces and gradually reach retail,” the expert specified.

According to him, a similar situation is developing with digital currency in China.

“As for improvements in terms of commissions for transfers and their speed, the country has already created a convenient SBP (fast payment system. - Ed.), Which allows you to instantly and free of charge interact with the ruble - it is unlikely to be interrupted,” he believes Bykov.

At the same time, in his opinion, the launch of the digital ruble does not affect the state of affairs in the regulation of decentralized cryptocurrency.

“The only risk of the coexistence of the two instruments in the country is the possible mimicry of fraudulent analogues of the ruble under the official one. <...> The only way to protect citizens is to conduct a competent information campaign and direct them towards honest intermediaries, ”concluded the analyst.

On December 29 last year, a draft law on the issuance and rules for the use of the digital ruble was submitted to the State Duma.

On the same day, Anatoly Aksakov, chairman of the State Duma committee on the financial market, said in an interview with Izvestia that deputies expect the digital ruble to be legalized in the first quarter of 2023 . According to him, in the future, national digital currencies can also be used for settlements between countries.

Earlier, on October 3, Denis Domashchenko, head of the laboratory for the study of the monetary system and analysis of financial markets at the Plekhanov Russian University of Economics, told Izvestia that the digital ruble could ensure the secrecy of transactions with Russian counterparties.

https://iz.ru/1452175/2023-01-09/analitik-rasskazal-o-perspektivakh-tcifrovogo-rublia

Russia was supposed to collapse economically but it is seeing a 2.3% GDB budget deficit.

Big whoop.

The higher than expected budget deficit is due to the massive monetary injection of resources into the newly liberated Russian territories.
This is why Elvira Sakhipzadovna has adopted an extremely cautious policy wrt to interest rates.

"We have all the resources for this”: Putin instructed the government to take measures to reduce poverty and increase incomes of citizens, by Vladimir Tsegoev and Ksenia Chemodanova for RTRussia. 01.11.2023.

President Vladimir Putin instructed the government to continue the implementation of major socio-economic projects aimed, among other things, at improving the well-being of people. The head of state called the growth of real incomes of Russians, as well as the reduction of poverty and inequality, the key priorities in this direction. To date, the proportion of the poor in the country continues to gradually decline. Experts largely attribute this to the social support measures in force in Russia. In addition, the expected slowdown in inflation should have a positive impact on the standard of living of Russians, according to the Cabinet.

The Russian authorities will continue to implement large-scale socio-economic programs and plans aimed, among other things, at improving the welfare of citizens. On Wednesday, January 11, President Vladimir Putin drew attention to this during the first meeting with the Cabinet of Ministers in 2023.

“We certainly have all the resources for this... It is necessary to build economic policy measures in such a way that they lead to an increase in real wages and incomes of people, and together with social support measures (primarily for families with children) ensure further reduction of poverty and inequality,” the head of state instructed.

According to him, work in this direction should cover all regions, including new subjects of the Russian Federation. As the Russian leader emphasized, the authorities are obliged to provide a systematic, comprehensive approach to the integration of the Donetsk and Luhansk People's Republics, as well as the Zaporozhye and Kherson regions into a single socio-economic space of the country.

“It is important to set clear guidelines for the development of new regions of Russia, understandable for citizens, so that residents know what will be built in their cities and towns, what facilities will be restored and when, how families’ incomes will increase, what assistance they will receive from the state, how children’s kindergartens, schools, universities, hospitals and polyclinics, when will enterprises open, what support will small businesses and entrepreneurs receive, how will infrastructure and transport develop,” Putin added.

It is noteworthy that even under conditions of external pressure on the Russian economy, the level of poverty in the country continues to gradually decrease . This conclusion follows from the materials of Rosstat. According to the latest estimates of the department, over the year the poverty line in the Russian Federation has grown from about 12 thousand to 13.7 thousand rubles. At the same time, the number of people with incomes below this threshold decreased from 16 million to 15.3 million, and the share of the poor decreased from 11 to 10.5%.

“The decline is really small, but it is important that in the current difficult economic situation there is such a definite positive trend. It needs to be preserved,” Vladimir Putin said earlier.

According to the president, the decline in the number of low-income Russians is largely due to measures of state support for the population. So, in 2022, a program for issuing benefits to needy families with children under 17 began to work. In addition, pensions, the minimum wage (SMIC) and the subsistence minimum (PM) were indexed twice, as a result of which the volume of many social payments increased.

And from January 1, 2023, the size of pensions, the minimum wage, the PM and a number of benefits were further increased . It is assumed that this will partially compensate citizens for the increase in consumer prices that occurred during the year and will lead to a further reduction in poverty. Svetlana Bessarab, a member of the State Duma Committee on Labor, Social Policy and Veterans Affairs, shared this opinion in an interview with RT.

“This year the positive dynamics will continue. We are developing social contracts, including those for running your own business and farming. There are also retraining programs for professions in demand, which allows maintaining and developing the labor market. For families with children, the key financial support will be the universal allowance , which has been in operation since January 1, ” Bessarab noted.

In addition to various state support measures, the growth of real incomes of citizens should be facilitated by a general slowdown in inflation in Russia. During a meeting with the president, the head of the Ministry of Economic Development, Maxim Reshetnikov, said that at the end of last year, the dynamics of consumer price growth in the country turned out to be better than originally expected. Recall that back in the spring of 2022, against the backdrop of large-scale Western sanctions, annual inflation in Russia approached 18% for the first time in 20 years, after which it began to gradually slow down. The government expected that by the end of December the figure would drop to 12.4%, but in reality the value dropped to 11.9%.

“We proceed from the fact that at the end of the first quarter (2023. - RT ) inflation will drop significantly year on year, since we have a price peak in May (2022. - RT ) will leave the base. And in the second quarter we will already see those numbers that are likely to be even lower than our target level of 4%. At least for a certain period," Reshetnikov said.

A similar forecast was previously given by the Central Bank. As Central Bank Chairman Elvira Nabiullina said, next spring inflation in Russia may temporarily drop below 4%, but by the end of 2023 it will be about 5-7% . A similar point of view in an interview with RT was expressed by Alexander Razuvaev, a member of the Supervisory Board of the Guild of Financial Analysts and Risk Managers.

“I think that in 2023 inflation will fall to about 6%. Of course, this can have a positive impact on low-income Russians, as their disposable income and ability to buy goods will increase. The poverty level in this case can reach up to 10%,” the expert concluded.

https://russian.rt.com/business/article/1096234-putin-dohody-bednost-regiony

There is a lot of industrial and office space construction. People fixate on the residential sector, but we are not talking about the
USA with its offshored industry and residential housing bubble economy.

What is even more important than the sole increase number, is a fact that more than 60% of the whole constructed "area" was made by private investors. It is a record peak, too.
We talk about tens of thousands of new build homes for the Russian booming middle class.

I stayed at the apartment (more like condominium since it was not rental) of an acquaintance in St. Petersburg over a decade ago and it
was one of the "commie block" units from the 1980s. I would say it was rather high end even by western European standards for regular
income people. It had its own private bath and two large bedrooms. The main thing is that it was robust concrete construction and
the best ventilation system I have seen (you could not tell the apartment was owned by a smoker). So the demand for better apartment
space is not recent. I think most new units over the last couple of decades have been larger sized compared to Khruschevka standard.
I just hope they are not applying western rubbish construction standards were you can hear your neighbour breathe.

Post  kvs Today at 1:51 am

I stayed at the apartment (more like condominium since it was not rental) of an acquaintance in St. Petersburg over a decade ago and it
was one of the "commie block" units from the 1980s. I would say it was rather high end even by western European standards for regular
income people. It had its own private bath and two large bedrooms. The main thing is that it was robust concrete construction and
the best ventilation system I have seen (you could not tell the apartment was owned by a smoker). So the demand for better apartment
space is not recent. I think most new units over the last couple of decades have been larger sized compared to Khruschevka standard.
I just hope they are not applying western rubbish construction standards were you can hear your neighbour breathe.

I guess what you describe is one of the industrial-grade prefabricated homes that used to be erected in the FSU and other WarPac countries.
What made a difference back then was the fact, that all of them have been designed by skilled architects and utilized the most modern urbanization concepts that existed.
Different countries had their own systems and projects, and the quality of subsystems can be different, yet the concepts themselves proved outstanding.
This type of infrastructure was made to last for 40 years, and be gradually replaced by next-generation buildings.
What is the funny part, is the fact that due to political reasons and a need to deny anything made in the "communist era" lots of ex-comm countries carried the very same & stupid moves to deprive the status of these buildings. Some serious technical studies have been made to prove how substandard those are ... and the results were hilarious.
It turned out not only that the buildings hold on their own very fine after a whole settled exploitation period, but can be safely and easily used for the next 40 years
An interesting part is that we had several different systems used here in the 60-90s, one of them being a direct Soviet origin and called "leningrad". Those were build with the Soviet standards, and with Soviet-delivered projects, concepts and whole urbanization structure. To this very day, "leningrads" proved to be much better designed than our own breed. Whole districts are much more comfortable, buildings are made with better materials, and the flats are much better designed. For example, the standard two-bedroom flat was around 55 m2, so with the increasing immobilities prices a family could afford it without much struggle.
Interestingly, the same kind of infrastructure was built in France back in the booming 70s, or Norway as they started to groom with the oil/gas money. Fast, cost-effective and easy to maintain.

The crime numbers are real. The 1990s was a gangster's paradise so the murder rate was high. Thanks to economic
improvement and clean up of policing and effective elimination of gangs the murder rate dropped to under 10.

People always ignore that Putin was the real reformer of the Russian legal system. Thanks to introduction of jury trials
and real probation the Russian jail population went from top of the list along with the US to much lower rank. There
were about 180,000 people released from jail in the first wave. This did not create a surge in crime. In fact, in the
long run it helped to reduce it since jails are where criminals are trained and indoctrinated.

Russian energy record revealed a military secret, by Sergey Savchuk for VZGLYAD. 01.17.2023.

Russia has set a new record for electricity generation, and that's not just good, it's great, no matter how you look at it. The system operator of the Unified Energy System (SO UES) has published an annual report on the production of electricity with reference to the regions, and if there is a decline in generation in some of them, then the overall dynamics is more than encouraging.

Let's start with the fact that power engineers have their own territorial and administrative division of the Russian Federation. Historically, when developing regional energy networks, the creators started from many factors, taking into account the population of the territories, the availability of a resource base and large consumers, the potential for organizing export flows, and much more. Therefore, today, without any reference to the physical map, our country is invisibly divided into seven separate energy systems (IPS). These are the ECO Center, the Middle Volga, the Urals , the North-West, the South, Siberia and the East.

In total, over the past, to put it mildly, very difficult year for the economy, our power engineers produced 1,106.3 terawatt-hours, which is sixteen units more than in 2021, when there was neither SVO, nor sanctions going in continuous waves, nor all kinds of ceilings prices. Note that this is the highest figure not only in the modern history of the country, but also during the period of existence of the RSFSR.

Of all the regional associations, only the Middle Volga and North-Western IPS showed a negative trend. More specifically, the first region produced 110.9 (-0.6 compared to a year earlier), and the second - 97.1 terawatt-hours (-0.4). This fall is absolutely justified for, oddly enough, geopolitical reasons. 

Moreover, in the course of the current annual adjustment, it moved to the planned section, but more on that below.
Five other energy systems showed growth, some of them even record-breaking. Literally dotted denote the numbers:

—IPS East: 44.5 TWh (+1.6 TWh)
—IPS South: 111 (+2.
—IPS Siberia: 224.7 (+7.3)
—ECO Center: 257 (+1.0)
—IPS Ural: 260.8 (+4.2)

We deliberately placed the regions not by the size of the increase in generation, but by the total volume of production, so that the scale of the increase was more obvious.

These data cause a surge of optimism for a reason. Any economist will tell you that electricity generation is an indirect universal indicator of the growth and stability of industry, that is, the real sector of the economy. Let’s remember what was initially declared and is being repeated today by the West with the introduction of the next countless package of sanctions: all these restrictions have one goal - to bring down the Russian economy, which, as they were sure on the other side, rests solely on commodity trade.

Well, further along the chain, various branches of production would be destroyed, causing the collapse of the internal financial and military systems. It was understood that the budget of Russia, deprived of oil and gas dollars, would not be able to fulfill social obligations, and the state defense order and other state programs would be disrupted in many and better in all industries. Plants and factories that do not receive money, additionally deprived of their usual supply routes and cooperation, will stop production, thereby further reducing the volume of budget injections - already in the form of taxes. If the strangulation scheme worked, the country would most likely simply cease to exist, but, fortunately,Moscow had aces in his pocket in the form of ready-made system and managerial developments.

We do not just focus on the industrial sector of the Russian economy. The public perception of internal processes is made up of millions of personal impressions of individual people who, due to natural human egocentrism, habitually try on what is happening for themselves. And for some, the news that we are discussing today may seem insignificant, because their families and colleagues do not see any significant changes. This is both true and not.

The fact is that the population in any country is a priori a minority consumer of electricity. The lion's share is eaten by factories, combines, conveyors, desalination plants and many other industrial and infrastructure facilities. Very roughly speaking, out of every hundred megawatt-hours of electricity, only ten are spent on the needs of the population, everything else goes deep into the factories through high-voltage power lines. That is why the volume of its production indirectly judges the growth or decline of domestic production. For example, even before the terrorist attack on the Crimean bridge and subsequent retaliatory strikes on the energy infrastructure of Ukrainethe Kyiv authorities announced a drop in domestic energy consumption by 20-25 percent. This happened due to their own direct ban on working with Russian customers, on whom the lion's share of Ukrainian production was tied.

At the same time, however, the production and export of electricity grew, but here we should only talk about machinations and Kiev 's indefatigable desire to make money in troubled waters.

As we mentioned above, both the growth and decline in generation are associated exclusively with geopolitical events. For example, the decline in production in the North-West IPS is caused by the refusal of Finland and the Baltic countries to buy Russian electricity, which had previously been exported there for decades.

As for the regions that came out in the plus, then everything is simple here, just remember the school course in geography and history. Generation grew in the Central, Siberian and Ural IPS, that is, along the line of the "iron belt" and industries associated with it. The second largest growth with the largest production was demonstrated by the Urals, the very one where our tank, aircraft, rocket and other plants are located.

Spoiled by the simplicity of computer games and movie plots, many began to forget that for the production of one conditional tank it is not enough to raise money and click the mouse. It is necessary to manufacture armor plates, guns, optics, turbines, rubber, thousands of kilometers of low-current wiring, on-board computer systems, explosives for dynamic protection, gunpowder for shells, oil, fuel, and thousands more items that flock to the workshops of the Urals and other factories from hundreds, and then thousands of subcontractors. These enterprises, according to unconfirmed and completely correctly concealed information, work in three shifts, which makes everyone who helps to assemble the same tank, "Pantsir" or "Tiger", actively stir.

Any of us, habitually turning on a kettle, a TV or putting a smartphone on charge, is unlikely to think that at the same time, thousands of megawatts, the number of which has grown imperceptibly, go to plants to melt charge in arc furnaces, to raise cages and skips from mines , turn the drive rollers of conveyors, illuminate career paths, turn the rotors of electric locomotives and set in motion multi-ton stamping presses.

But let's digress to more peaceful aspects.

Our conversation today would be one-sided if we did not mention the growth in electricity production in the Far East . It is connected to a large extent with a sharp increase in the supply of electricity for export, namely to China and Mongolia . Another unexpected driver is increased exports to Kazakhstan , the northern part of which has recently experienced significant energy hunger. There is nothing wrong with this trend - on the contrary, large cross-border flows bring significant profit to the budget and provide jobs for thousands of our power engineers.

Still, of course, it is necessary to mention such a moment as reducing losses during transportation. In Kazakhstan, this value, according to the reports of the local national operator, can reach 12-13 percent, that is, so much due to the deterioration of power transmission lines and distribution lines is lost on the way from the power plant to the end consumer. In Russia, this figure is slowly but steadily declining, which indicates the inconspicuous work on the modernization of transport infrastructure, which reduces planned losses and increases profitability.

In general, if somewhere in Russia more electricity is produced, it is not necessary for anyone, but for you and me. And this is good.

https://ria.ru/20230117/energorekord-1845314435.html