Russia’s Oil Dilemma Explained

Oil Well file photo

(Bloomberg – bloomberg.com – Stephen Bierman -March 8, 2016) [Charts here bloomberg.com/news/articles/2016-03-09/russia-s-dilemma-squeeze-oil-industry-without-strangling-growth-ilk2y8i4] While the world focuses on Russia’s oil-freeze talks with OPEC, there are discussions behind closed doors in the Kremlin that will have a much more significant impact on the nation’s energy industry. The petrodollars that underpin Russia’s national budget are evaporating. When crude prices were high, increasing revenue […]

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TRANSCRIPT: [Medvedev on] The Government’s action plan to ensure stable socioeconomic development in 2016

Dmitri Medvedev file photo

(Government.ru – February 18, 2016) Excerpts from Dmitry Medvedev’s opening remarks at the Government meeting: The budget sector and the real sector are overstrained today due to low oil prices and sanctions, so there have been a lot of proposals to be included in the plan but far from all of them were incorporated into the final version. We need […]

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NEWSWATCH: “Russia government mulls five percent cut in defense procurement spending: sources” – Reuters

File Photo of Russian Tanks in Military Parade

Russia’s government is considering cutting spending on defense procurement this year by 5 percent … a move that would extend the budget squeeze to a sector that up to now has been immune …. The proposal has support across several ministries and in other state institutions, enough for it to go forward for discussion at a cabinet meeting, the sources […]

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Putin’s New Internet Czar Wants Apple and Google to Pay More Taxes

iPad file photo

(Bloomberg – bloomberg.com – Ilya Khrennikov and Stepan Kravchenko – February 8, 2016) When he’s not checking Gmail on his MacBook, Vladimir Putin’s new Internet czar can’t stop railing against American technology companies. Google, Apple Inc. and Microsoft Corp., collectively worth more than Russia’s gross domestic product, have all entered German Klimenko’s crosshairs since he was named Putin’s first Internet […]

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Putin Opens Asset Sales to Foreigners as Budget Gap Widens

Empty Boardroom

(Bloomberg – bloomberg.com – Ilya Arkhipov and Andrey Biryukov – February 2, 2016) President Vladimir Putin will allow foreign investors to bid for stakes in some of Russia’s largest companies as the government prepares its most ambitious asset-sale program in years to close a widening budget gap. “Russia was and remains open for foreign investment and Russia is interested in […]

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Russians suggest state should save money on officials, not on social policy

Kremlin and River

(Interfax – January 27, 2016) In the situation of the crisis, Russians support the idea of saving money on officials, but believe it is unacceptable to cut the costs of healthcare, social policy, science and education, sociologists have reported, citing a poll conducted by VTsIOM. The poll, which surveyed 1,600 people, in 130 populated areas in 46 regions, was conducted […]

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NEWSWATCH: “Russia’s pensioners squeezed as recession bites” – Financial Times

Diverse Paper Currency, Coins, Line Graph

The Financial Times covers the impact of Russia’s economic downturn on older Russians. Several Russian regions have over the past year been forced to suspend benefit payouts or stop the inflation indexing of public sector wages. … The dramatic slide in crude prices has slashed revenues from the export of oil and gas which account for more than half Russia’s […]

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Putin urges government to be ready for any economic scenario

Diverse Paper Currency, Coins, Line Graph

(Interfax – January 13, 2016) Russian President Vladimir Putin has told the government to closely monitor changes in the economic situation and be ready for any turn. “We should be ready for any scenario,” he said at a meeting with Cabinet members. The president drew attention to how the situation changes on the markets. “I know that the government has […]

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NEWSWATCH Wall Street Journal: “Vladimir Putin Warns Government May Cut Budget Over Oil Price Fall. Russian president says peak of crisis is over, sees return to growth next year.”

Diverse Paper Currency, Coins, Line Graph

The Wall Street Journal reports on Russian President Vladimir Putin’s December address, and prospects of Russian budget cuts prompted by oil-related economy downturns. … Putin said on Thursday that the government may have to cut the federal budget because of a plunge in oil prices, but tried to reassure Russians that the worst of the economic crisis was over. At […]

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Majority of Muscovites Support Truck Driver Protests – Poll

Kremlin and Saint Basil's File Photo

(Moscow Times – themoscowtimes.com – December 11, 2015) More than 70 percent of Moscow residents aware of the ongoing protest by truck drivers support their action, a poll released Wednesday by the independent Levada Center indicated. While the majority of Muscovites are familiar with the protest, 21 percent of the capital’s residents said they had heard nothing about it, while […]

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Tax system in Russia to remain unchanged for next few years – PM

Cash, Calculator, Pen

MOSCOW. Dec 9 (Interfax) – The Russian government is not planning to raise taxes in the country in the next few years, Russian Prime Minister Dmitry Medvedev said. “Currently a decision has been made, it was supported by the president, that we in the next few years will not touch the tax system in general and we will not touch […]

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Truckers’ Strike Won’t Lead to Political Change in Russia, Gontmakher Says

Truck at Russian Border Crossing

(Paul Goble – Window on Eurasia – Staunton, December 7, 2015) Pro-Kremlin writers have argued that the deteriorating economic situation will lead Russians to willingly tighten their belts, and opposition ones have suggested that economic problems will lead to political protests and even regime change. But both are wrong, Yevgeny Gontmakher says. In a commentary today, the Moscow economic analyst […]

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Why are Russian truckers protesting? 10 questions and answers

Map of Russia and Russian Flag adapted from images at state.gov

For over a month now, long-haul drivers in Russia have been engaged in a mass protest, staging rallies across the country, which have now reached Moscow. Truckers, especially those who are self-employed or work for small businesses, believe that the recently introduced additional toll for using federal highways will put their business on the brink of bankruptcy. (Russia Beyond the […]

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Truck Protests Signal New Kind of Social Activism

Truck at Russian Border Crossing

(Moscow Times – themoscowtimes.com – Vasily Kolotilov – December 4, 2015) “I think I will set my car on fire soon. The tax will take us all down. I get 112 rubles a month in social payments for my kid – how am I supposed to raise him on that?” says Rasul, a truck driver from Russia’s North Caucasus republic […]

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Medvedev: Retirement age has to be raised sooner or later

Two Babushkas file photo

(Interfax – November 11, 2015) Russian Prime Minister Dmitry Medvedev has for the first time definitively supported the future raising of the retirement age without saying when this decision may be made. At present, the retirement age in Russia is 60 years for men and 55 years for women. The Finance Ministry insists there is no other way to resolve […]

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Russian Military Spending to Increase by Less Than 1% Next Year

Russian Mobile ICBM Parade File Photo

(Moscow Times – themoscowtimes.com – Matthew Bodner – October 27, 2015) Russia’s defense spending is set to increase by a modest 0.8 percent next year, falling far short of the estimated 10 percent annual budget increases required over the next five years to hit equipment modernization targets mandated by President Vladimir Putin. Russian military expenditure has been rising since 2011, […]

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Moscow’s Spending Cuts Undermining Russians’ Health and Reducing Life Expectancy

Medical Symbol with Pole, Serpents, Wings, adapted from image at lanl.gov

(Paul Goble – Window on Eurasia – Staunton, October 21, 2015) Guzel Ulumbekova, the head of the Russian Association of Professional Medical Societies, says that the health and life expectancy of Russians is directly related to the amount of government spending on health care and that as this amount is falling, their health is suffering and their life expectancies are […]

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Russian MinFin adjusts revenue for 2016 budget to 13.74 trln rubles, spending to 16.1 trln rubles

Anton Siluanov file photo

MOSCOW. Oct 22 (Interfax) – The Russian Finance Ministry has increased the parameters for the revenue and spending of the 2016 federal budget to 13.738 trillion rubles and 16.098 trillion rubles, respectively, Russian Finance Minister Anton Siluanov told journalists. “Revenue is 13.7385 trillion and spending is 16.0987 trillion rubles,” he said. Earlier the draft budget envisaged revenue of 13.57 trillion […]

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Calculating the Cost of Russia’s War in Syria

Syria Map

(Moscow Times – themoscowtimes.com – Peter Hobson – October 21, 2015) Russian air strikes in Syria are costing Moscow up to $4 million per day, data collated for The Moscow Times by a defense think tank showed. The figures by IHS Jane’s show that bombing raids, supply runs, infrastructure and ground personnel – along with a salvo of cruise missiles […]

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Fitness training for dinosaurs; As austerity begins to bite, Russia’s state-owned firms are facing growing pressure to shape up

Diverse Paper Currency, Coins, Line Graph

(Business New Europe – bne.eu – Chris Miller in Moscow – October 15, 2015) Though Vladimir Yakunin was sacked from his post as head of state-owned Russian Railways back in August, the shock is still reverberating through Russia’s biggest and most powerful companies. A long-time friend of President Vladimir Putin, Yakunin was thought to be one of the most influential […]

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Finance Ministry’s Nesterenko: retirement age increase ‘inevitable’

Two Babushkas file photo

KRASNOGORSK. Oct 9 (Interfax) – The interim decisions approved for next year in light of the budget deficit do not eliminate the need to raise the retirement age. The draft budget for 2016 approved by the government this week indexes pensions by just 4%, rather than the actual inflation rate in 2015 (about 12%), with an option to conduct a […]

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Medvedev: Russia must cut dependence on oil revenues

Oil Wells File Photo

Speaking at a forum in Sochi, Russian Prime Minister Dmitry Medvedev has revealed that oil and gas revenues have provided for less than half of the federal Russian budget for the first time, and said the country must focus on reducing its dependence on oil through reforms, stimulating domestic manufacturing and cutting spending. (Russia Beyond the Headlines – rbth.ru – […]

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Achieving balanced budget at cost of its quality unacceptable – PM

Dmitri Medvedev file photo

MOSCOW. Sept 24 (Interfax) – Russian Prime Minister Dmitry Medvedev believes that the structure and effectiveness of budget expenditures are no less important than balancing the budget. “The creation of comfortable conditions begins with ensuring macroeconomic stability. Low inflation and a balanced budget remain priorities for the country’s sustainable development. Inflation must be reduced to the level of 4% in […]

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Russian Options Narrow as Putin Looks to Exporters’ Windfall

Diverse Paper Currency, Coins, Line Graph

(Bloomberg – bloomberg.com – Olga Tanas, Andrey Biryukov – September 22, 2015) Russian President Vladimir Putin’s promises made as recently as last year may be the latest casualty of the collapse in oil prices. Putin instructed the government on Tuesday to study the possibility of steering into the budget some of the gains by exporters from ruble devaluation, without losing […]

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New tolls on heavy trucks to raise funds for road repairs in Russia

Moscow Roads

Russia is to introduce a new system for collecting tolls from heavy trucks, with the proceeds – some 50 billion rubles ($896 million) a year – to go toward vital road repairs. Payment will be controlled by special gates set up on major highways. (Russia Beyond the Headlines – rbth.ru – Anna Kuchma, RBTH – July 28, 2015) Help may […]

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Russian Defense Industry Revenues Soar Despite Western Sanctions

Russian Soldiers Marching

(Moscow Times – themoscowtimes.com – Matthew Bodner – July 29, 2015) The Russian government bought defense equipment worth almost 2 trillion rubles ($33.2 billion) in 2014, Prime Minister Dmitry Medvedev said in April. Russia’s major defense industry enterprises shrugged off Western sanctions and a Russian economic slowdown to grow their revenues rapidly in 2014, according to a new global ranking. […]

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Pension Age for Russian Officials to Be Raised

Kremlin and Saint Basil's File Photo

(Moscow Times – themoscowtimes.com – July 28, 2015) Russia’s Labor Ministry plans to raise the retirement pension age for state officials to 65 from 60, according to a statement published Monday, as the government scrambles to cut spending amid a recession. The Labor Ministry said it had drawn up legal amendments that would bar officials from receiving retirement pay before […]

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Russia Braces for Longest Recession in Decades With $50 Oil

Oil Wells File Photo

(Bloomberg – bloomberg.com – Olga Tanas – July 22, 2015) For an economy that lives and dies by crude prices, the latest downturn in the world oil market means Russia’s recession may stretch into next year for the longest slump in two decades. Russia’s first economic slump since 2009 looked like it would plateau as oil gained 40 percent from […]

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Russian Military Struggling to Modernize

Igla Missile Test Firing file photo

(Moscow Times – themoscowtimes.com – Anna Dolgov – July 17, 2015) The Russian military is failing to meet its plans for this year on re-equipping its armed forces with modernized weapons because of Western sanctions over the conflict in Ukraine and a decline of domestic industries, a deputy defense minister told President Vladimir Putin. Government defense contracts that have fallen […]

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Russians against Kremlin spending money on Crimea or World Cup

putin-fifa-meeting

(Business New Europe – bne.eu – Henry Kirby in London – June 4, 2015) [Charts here http://www.bne.eu/content/story/bnechart-russians-against-kremlin-spending-money-crimea-or-world-cup] An overwhelming majority of Russians are against state money for health and education being redirected toward other areas of the economy, according to a recent poll by the Levada Center. In the wake of announcements that Russia’s revised 2015 budget will increase defence […]

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Putin Declares War on Russians’ Health

Medical Symbol with Pole, Serpents, Wings, adapted from image at lanl.gov

(Bloomberg – bloomberg.com – Marc Champion – May 14, 2015) At what point will Russians begin to question the choices being made by their government? Maybe when those choices start killing them. As Bloomberg’s Ilya Arkhipov and Henry Meyer report, Russia’s health system has suffered a severe reversal as a lower oil price has reduced government revenue and spending. Forced to pick […]

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NEWSWATCH: Russia’s military budget may shrink 10 percent in 2015 – Rostec

File Photo of Russian Tanks in Military Parade

[“Russia’s military budget may shrink 10 pct in 2015 – Rostec” – Reuters – Stanley Carvalho – Feb. 23, 2015] Reuters covers news that Russian defense spending might shrink this year, due to the impact of Ukraine-related sanctions. Finance Minister Anton Siluanov previously had said that 10 percent cuts to government spending would spare defense. But on Monday the head of […]

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Finance Ministry Eyes 10% Cuts to Russia’s State Spending as Economic Outlook Worsens

Kremlin and Saint Basil's File Photo

(Moscow Times – themoscowtimes.com – October 28, 2014) With sanctions, oil price falls and the ruble devaluation making Russia’s official growth forecasts look increasingly overconfident, the Finance Ministry will draw up contingency measures to shave 10 percent off state spending in 2016 and 2017, business daily Vedomosti reported, citing undisclosed government sources. Such a drastic reduction in spending could save […]

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Oil drops below $80, implications for Russian budget

Oil Well file photo

(Business New Europe – bne.eu – October 28, 2014) The price of a barrel of Texan light dropped lower than $80 for the first time in two years, but Russia’s economy minister has retained its forecast for the next three years of the oil price remaining within the corridor of $90-$110, according to Interfax. “It is not possible to say with certainty […]

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Finance Minister: Russia Needs Backup Budget For Worst-Case Scenario

Anton Siluanov file photo

(Moscow Times – themoscowtimes.com – Delphine d’Amora – October 24, 2014) Russia must create a contingency budget to counter the threat that Western sanctions, economic stagnation and low oil prices will dash the country’s hopes of restoring growth in the near term, Finance Minister Anton Siluanov said Friday. “A budget cannot constantly have expenses that were drafted in a different […]

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Russian Defense Budget to Hit Record $81 Billion in 2015

Russian Nuclear Submarine file photo

(Moscow Times – themoscowtimes.com – October 16, 2014) Russia’s national defense budget for 2015 will reach a record 3.3 trillion rubles ($81 billion), or 4.2 percent of its national GDP, the head of the State Duma’s defense committee, Admiral Vladimir Komoyedov, was quoted as saying by the Interfax news agency on Thursday. The 2015 budget represents an 812 billion ruble […]

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Putin Aloof as Russia’s Economic Troubles Close In

File Photo of Vladimir Putin Seated at Desk

(Moscow Times editorial – themoscowtimes.com – October 8, 2014) Official documents published Monday show the Kremlin has scrapped the president’s annual budget address. President Vladimir Putin’s spokesman Dmitry Peskov told TASS that the set piece speech would, from now on, be folded into the state-of-the-union address, usually given in December. While Putin floated the idea of combining the two speeches […]

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Record fall in oil prices threatens Russian budget

Oil Well file photo

(Russia Beyond the Headlines – rbth.ru – Alexei Lossan, RBTH – October 7, 2014) The price of Brent oil has tumbled to $92.2 a barrel, placing the Russian federal budget in jeopardy. Russian analysts believe that the decrease in oil prices is related to demonstrations in Hong Kong, the strengthening of the dollar, as well as the drastic growth in […]

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RIA Novosti: Putin: Russia Has Reserves to Implement Budget Plans Regardless of Global Trends

File Photo of Cash, Coins, Line Graph

NOVO OGARYOVO (outside Moscow), October 3 (RIA Novosti) – Russia has enough reserves to implement all the tasks under the state budget regardless of global political and economic trends, Russian President Vladimir Putin said Friday. “We certainly have reserves to resolve the issues that could arise as a result of developments of the situation in the world and in Russia,” […]

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Russia Reduces Domestic Borrowing Plan Seeing Budget Surplus

File Photo of Cash, Coins, Line Graph

(Bloomberg – bloomberg.com – Vladimir Kuznetsov – May 19, 2014) Russia reduced its 2014 domestic borrowing plan by 46 percent as the world’s largest energy exporter expects to turn a fiscal surplus, Finance Minister Anton Siluanov said. The government lowered the fundraising target to 435 billion rubles ($12.6 billion) from 808 billion rubles, Siluanov told reporters in Moscow today. The […]

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Budget Figures Show Putin has Been Preparing for War for Four Years, Nemtsov Says

File Photo of Russian Tanks in Military Parade

(Window on Eurasia – Paul Goble – Staunton, May 12, 2014) A government’s priorities and plans are most clearly shown in its budget, and over the last four years, the budgets Vladimir Putin has proposed and imposed are those of a leader preparing for war rather than someone concerned about the needs of the Russian people, according to Boris Nemtsov. […]

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Weak ruble could push Russian budget into surplus – report

File Photo of Cash, Coins, Line Graph

(RIA Novosti – February 25, 2014) A weakening ruble could boost Russia’s federal income by $28 billion this year, pushing the treasury into surplus, according to a report published Tuesday by Moscow’s Higher School of Economics. The ruble has fallen by more than 7.5 percent since the beginning of the year against the dollar-euro basket used by the Central Bank […]

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Russian financial watchdog says regions lack funds to implement Putin’s orders

Map of Russia

(RIA Novosti -January 29, 2014) The Russian regions do not have sufficient funds to implement the May [2012] orders of Russian President [Vladimir Putin], the Audit Chamber has said. The watchdog has come to this conclusion as a result of the monitoring of the regional situation. The most acute situation has emerged in connection with order No 600 about measures […]

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Putin Stays Firm on Fulfilling Promises

File Photo of Vladimir Putin at Valdai Club 2013 Meeting, Adapted from Screenshot of Valdai Club Video at youtube.com

(Moscow Times – themoscowtimes.com – Anatoly Medetsky – December 6, 2013) President Vladimir Putin on Thursday said the government would have to improve the country’s economic performance in order to fulfill his campaign promises. He also complained that his tap water was sometimes brown from rusty pipes. Putin’s decrees from May last year, which seek to raise living standards, have […]

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RIA Novosti: Russia Expects ‘Big Problems’ for Budget After 2016 – Finance Minister Siluanov

File Photo of Cash, Coins, Line Graph

MOSCOW, December 6 (RIA Novosti) ­ Russia’s Finance Ministry predicted serious difficulties Friday for the budget in 2016 and 2017 as slowing economic growth means there will be insufficient funds available to honor spending commitments. Short term and long term growth forecasts for the Russian economy have been cut repeatedly this year, with officials warning Russia is entering a period […]

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