Archive for Economy, Business, Investment, Trade

Russia gambles on $21 billion plan to save ailing economy

Cash, Calculator, Pen

(Russia Beyond the Headlines – rbth.ru – Alexei Lossan, RBTH- January 27, 2015) The Russian authorities are to spend some $21 billion to rescue the country’s economy. The money will be used mainly to capitalize major banks, support the agricultural sector and fund construction, and will be allocated from the federal budget and the National

S&P downgrades Russia to junk

File Photo of Cash, Coins, Line Graph

(Business New Europe – bne.eu – bne IntelliNews – January 27, 2015) Standard & Poor’s downgraded Russia’s credit rating to junk status late on January 26, a move which precipitated the rouble’s fall by more than 6%. S&P lowered Russia’s credit rating to BB+, one step below investment grade, as renewed fighting in Ukraine raised

Russia now in extremely difficult economic condition, but could use this for reform – Shuvalov

Igor Shuvalov file photo

(Interfax – January 23, 2015) The Russian economy is currently in extremely difficult economic condition, and Russia’s problems should not be underestimated, Russian First Deputy Prime Minister Igor Shuvalov said at Sberbank’s business breakfast at the Davos forum. “Russia is currently in an extremely difficult situation. Our economic situation isn’t good,” he said. There are

Deputy Prime Minister Shuvalov Sees Hard Landing for Russia

Igor Shuvalov file photo

(Bloomberg – bloomberg.com – Olga Tanas, Ott Ummelas, Anna Andrianova – January 23, 2015) Russia is in an “extremely difficult” economic situation and faces a worse crisis than in 2008-2009, according to First Deputy Prime Minister Igor Shuvalov. The country must prepare for a hard landing, Shuvalov said at a breakfast organized by the nation’s

Fall in oil prices could shrink Russia’s GDP by five percent

Oil Well file photo

(Russia Beyond the Headlines – rbth.ru – Alexei Lossan, RBTH – January 21, 2015) Russian experts say that due to a six-year low in oil prices, Russia’s economy could contract by up to five percent in 2015. Moreover, the situation drastically differs from the 2008-2009 crisis when Russia was not as dependent on oil prices

Business New Europe: Russia prepares RUB1.375 trillion anti-crisis plan

File Photo of Cash, Coins, Line Graph

(Business New Europe – bne.eu – bne IntelliNews – January 22, 2015) Russia’s President Vladimir Putin has approved the provisional version of an anti-crisis plan drawn up by the government. According to media reports, the plan involves recapitalisation of banks, provision of state guarantees, support measures for state development bank VEB and diverse sectors, changes

Russia To Face Same Old Questions at Davos In Chillier Atmosphere

File Photo of "World Economic Forum" Display at Davos from Past Session

(Moscow Times – themoscowtimes.com – Alexander Panin – January 21, 2015) As the World Economic Forum kicks off in the Swiss alpine town of Davos on Wednesday, Moscow’s delegates will be working hard to convince participants that Russia is still a sound investment despite tensions over Ukraine and a faltering economy. Speaking at a curtain-raising

A Tour Through Russia’s Five Poorest Cities

File Photo of Cash, Coins, Line Graph

(Moscow Times – themoscowtimes.com – Delphine d’Amora – January 21, 2015) While Moscow offers some wealthy residents a level of luxury on par with other world capitals, urban life in the dozens of other cities across Russia is quite another story. A study released this week offers a peek into this other side of urban

Russia in for recession, high inflation even if oil rebounds to $80-$90 – RenCap

File Photo of Cash, Coins, Line Graph

MOSCOW. Jan 21 (Interfax) – The Russian economy will not see any growth and inflation will remain high in 2015 even if oil prices rebound to $80-$90 per barrel, economists at Renaissance Capital believe. At an oil price of about $60, which is the investment bank’s baseline scenario, Russia’s GDP will contract by 4.3% in

Interfax: In 2008 crisis also came from abroad, Russia resolved problems by itself – Putin

File Photo of Vladimir Putin at Desk

NOVO-OGARYOVO. Jan 21 (Interfax) – The current, critical situation in the Russian economy was provoked from abroad, President Vladimir Putin believes. “I want to remind you that this is not the first situation of its kind which we are going through. We went through the same thing in 2008 and 2009. Then the crisis also

Ambassador John F. Tefft Speech to the American Chamber of Commerce in Russia

John Tefft file photo

(US Embassy Moscow – January 20, 2015) Thank you for that introduction, Alex. I am grateful for this opportunity to speak to members of the American Chamber of Commerce in Russia. I am sure you already know them and work closely with them, but let me start by introducing my team. First, there is Deputy

Ten New Laws That Will Affect Your Life in Russia in 2015

Kremlin and Saint Basil's File Photo

(Moscow Times – themoscowtimes.com – Ivan Nechepurenko – January 21, 2015) New year, new you: An expression that has taken on a special meaning for those living in Russia, where a plethora of new laws – many with a direct impact on the daily lives of citizens and residents – entered into effect on Jan.

Double trouble – Russia 2014 vs 2008

File Photo of Cash, Coins, Line Graph

(Business New Europe – bne.eu – COMMENT: Peter Szopo of Erste Asset Management – January 20, 2015) [Charts here http://www.bne.eu/content/story/comment-double-trouble-russia-2014-vs-2008] History, they say, does not repeat itself – it rhymes. Even if this were true, history’s rhymes are clunky at best. While Russia’s current crisis has obvious parallels with the turmoil in 2008, such as

Russia Beyond the Headlines: Is a banking crisis looming in Russia?

Russian Central Bank file photo

(Russia Beyond the Headlines – rbth.ru – Alexei Lossan, RBTH – January 20, 2015) The Russian government will supply banks with nearly $15 billion to help stave off a possible financial crisis. Only banks that are willing to increase credit in the production sector of the economy will be eligible to receive the money. In

Business New Europe: Pain but no disaster in store for Russia, says Rencap

File Photo of Cash, Coins, Line Graph

(Business New Europe – bne.eu – bne IntelliNews – January 20, 2015) If the average price of oil in 2015 is $60 then Russia’s economy will contract by 4.3% and the ruble will be RUB56.4 to the dollar, say analysts at Renaissance Capital in a note released on January 20 exploring different oil price scenarios.

Interfax: Russians begin to feel economic crisis – poll

File Photo of Cash, Coins, Line Graph

(Interfax – January 19, 2015) Almost two-thirds of Russian citizens (62 percent) think that the country is living through an economic crisis although it has no effect on their finances as of yet, the Public Opinion Foundation said. The crisis mostly manifests itself in Moscow (70 percent) and cities with a population of 50,000 to

Business New Europe: Russia’s tech sector defies downturn

File Image of Stylized Eye Surrounded by Binary Code

(Business New Europe – bne.eu – Ben Aris in Moscow – January 16, 2015) Most of Russia’s economy will be in the proverbial dustbin in 2015, except for the technology sector. The gadget-loving Russians have been driving the explosion of e-commerce in recent years, which is now starting to spill over into technological innovation and

BOOK REVIEW: Russia’s Mobutu?

File Photo of Man Placing Stack of Large Bills into Inside Pocket of Suitcoat

(Business New Europe – bne.eu – Derek Brower in London – January 13, 2015) Corruption in Vladimir Putin’s Russia has sprouted its own sub-genre for Western publishers. Few of the many books, though, have the laser-like focus or amass the same devastating detail as Karen Dawisha’s “Putin’s Kleptocracy: Who Owns Russia?” (Simon & Schuster, New

Moscow Times: Russian Oil Firms Can Weather $50 Oil

Oil Well file photo

(Moscow Times – themoscowtimes.com – Alexander Panin – January 16, 2015) If oil stays at its current price through this year, Russia’s gross domestic product will likely shrink more than 6.5 percent, but Russian oil companies will continue to make a profit at even lower prices, analysts at the Gaidar Economic Forum said Thursday. Oil

Business New Europe: Russia’s output will slump sharply in 2015, but what about Ukraine?

File Photo of Cash, Coins, Line Graph

(Business New Europe MOSCOW BLOG – bne.eu – Ben Aris – January 16, 2015) “Russia’s GDP is likely to plunge in 2015. Indeed, it would be prudent to expect a slump on the order of 10%. In many ways, Russia’s financial situation is eerily similar to the fall of 2008, when then-Prime Minister Vladimir Putin called

Analysts Predict a Russian Descent Into Madness

Kremlin and Saint Basil's File Photo

(Moscow Times – themoscowtimes.com – Ivan Nechepurenko – January 19, 2015) President Vladimir Putin cannot afford at this point to reform the political system he has built up, as doing so would undermine his grip on power, a panel of political analysts said at the Gaidar Forum on Friday. They went on to warn that without

EU split on maintaining Russian sanctions

Truck at Russian Border Crossing

(Business New Europe – bne.eu – Ben Aris in Moscow – January 16, 2015) With European growth faltering, and mounting fears of a total meltdown of the Russian economy that no-one wants, the European Union’s commitment to sanctions on Russia is wavering. At least eight EU countries are reported to be against renewing EU economic

What a ‘Junk’ Rating Would Mean for Russia

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(Moscow Times – themoscowtimes.com – Howard Amos – January 15, 2015) Russian officials and experts warned Wednesday that an expected decision by Standard and Poor’s to deprive Russia of its investment-grade credit rating could cost the country up to $30 billion and drain more money from an economy that is already entering recession. Major credit

Russian Prime Minister Scorns Fears, But Fails to Present Strategy at Economic Forum

File Photo of Cash, Coins, Line Graph

(Moscow Times – themoscowtimes.com – Ivan Nechepurenko – January 15, 2015) While Prime Minister Dmitry Medvedev radiated confidence Wednesday that Russia would be able to use the unfolding crisis as an impetus to make necessary changes to its economy, members of his government indicated that they do not have a concrete plan for bringing about

‘Top 15 Russian Fears for ’15’ — a ‘Versiya’ Checklist

Kremlin and Saint Basil's File Photo

(Window on Eurasia – Paul Goble – Staunton, January 14, 2015) Russians face so many problems and have so many fears that it is often a daunting task to ensure that one is keeping track of all of them. As a guide for the perplexed, Kseniya Veretennikova provides a checklist of the “top 15 fears”

Interfax: World Bank expects Russian GDP to fall 2.9 percent in 2015, edge up in 2016

World Bank Building

(Interfax – January 14, 2015) The World Bank expects Russian GDP to contract by 2.9 percent in 2015, but edge up by 0.1 percent in 2016, the bank said in its January Global Economic Prospects report. The World Bank estimates that the Russian economy grew by 0.7 percent in 2014. The bank is forecasting that

Working in the Gulag: Russia’s Prison Service, the FSIN, wants to put inmates’ employment on a more businesslike footing, but their working conditions are still more like slave labour

Russian Jail File Photo Showing Outer Wall, Windows, Barbed Wire

(opendemocracy.net – VYACHESLAV KOZLOV – January 9, 2015) Vyacheslav Kozlov is a journalist for daily newspaper Kommersant. He writes on international relations, nationalism, extremism, narco-politics, the Russian opposition and the problems facing Russia’s NGOs. He has at various times worked for Vremya Novostei, Moskovskiye Novosti and the online publication Gazeta.ru. His work has also appeared

Rating Downgrade Set to Scare More Capital Out of Russia

File Photo of Cash, Coins, Line Graph

(Moscow Times – themoscowtimes.com – Peter Hobson, Alexander Panin – January 12, 2015) Rating agency Fitch on Friday downgraded Russia’s credit rating to one notch above junk status, warning that oil price falls and Western sanctions could contract the country’s economy by 4 percent this year and force the government to pour cash into Russia’s

Meet the EEU family (Eurasian Economic Union)

Map of Commonwealth of Independent States, European Portion

(Business New Europe – bne.eu – bne IntelliNews – January 5, 2015) Members: Belarus, Kazakhstan, Russia Prospective member: Armenia Potential members: Kyrgyzstan (likely), Tajikistan (unlikely) Population: 173mn (Russia, including Crimea, 146mn; Kazakhstan, 17mn; Belarus, 10mn) Total GDP: $2.7tn Share of world gas reserves: 20% Share of world oil reserves: 15% On January 1, the Eurasian

NEWSWATCH: Russia ‘may face chaos’ if extra sanctions imposed: Germany

Map of Germany

[“Russia ‘may face chaos’ if extra sanctions imposed: Germany” – AFP – January 4, 2015] AFP covers a German official’s assessment of the potential impact of additional sanctions on Russia: Tougher sanctions may destabilise the situation further in Russia and plunge the country into chaos, German deputy chancellor Sigmar Gabriel warned … ‘Whoever wants that will provoke

Any Russian Protests Ahead Likely to Be About Economic Issues Rather than Political Ones, Experts Say

Moscow Protest file photo

(Window on Eurasia – Paul Goble – Staunton, January 5, 2014) Three Russian experts with whom Russkaya planeta spoke say that while declines in the standard of living of many Russians in the coming year as a result of the economic crisis may lead to some protests about economic issues, any such demonstrations are unlikely

Best of 2014: People of the year

New Year's Eve on Red Square with Fireworks, Kremlin, Saint Basil's, Crowds

(Russia Beyond the Headlines – rbth.ru – Oleg Yegorov, special to RBTH – December 22, 2014) The year 2014 was complicated, with groundbreaking events aplenty on the political scene, as well as in technology, media and numerous cultural spheres. RBTH presents the Russians who in its view played the most noteworthy roles in politics, science,

China Offers Russia Help With Currency Swap Suggestion

China Map

(Bloomberg – bloomberg.com – December 22, 2014) Two Chinese ministers offered support for Russia as President Vladimir Putin seeks to shore up the ruble without depleting foreign-exchange reserves. China will provide help if needed and is confident Russia can overcome its economic difficulties, Foreign Minister Wang Yi was cited as saying in Bangkok in a

Putin goes

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

(opendemocracy.net – Aleksandr Morozov – December 22, 2014) Russian journalist , political analyst . Since August of 2011 – editor in chief of ” Russian Journal” , the director of the Center for Media Research UNIK Until ‘Black Tuesday’ on 16 December 2014, fifteen years after he first took power, there were no grounds for

The rouble crisis in Siberia

Cash, Calculator, Pen

(opendemocracy.net – Anna Fofanova – December 17, 2014) Anna Fofanova is a Tomsk-based editor and journalist. As the rouble collapses, residents of Tomsk have long memories – from Black Tuesday 1994 to Black Tuesday 2014. Tomsk is a provincial city in the best sense of the word. Indeed, as the largest centre for education and

Russians in Biggest Cities Feel the Most Pain from Crisis, Gudkov Says

Aerial View of Moscow From Beyond Stadium, file photo

(Window on Eurasia – Paul Goble – Staunton, December 22, 2014) Russians living in the largest cities, the people who benefited the most from the oil-driven boom of the last decade, now feel the greatest concern about the impact on their lives of the economic crisis because they are better informed than those in smaller

Does anybody in Russia care about the ruble?

File Photo of Cash, Coins, Line Graph

(Russia Beyond the Headlines – rbth.ru – Georgy Bovt, special to RBTH – December 19, 2014) After becoming two times poorer in real terms since the beginning of the year due to the collapse of the ruble, Russians could well have taken to the streets to protest against the government’s economic policies. Why hasn’t that

The oil price is all that matters regarding Russia

Oil Well file photo

(Business New Europe – bne.eu – Chris Weafer – December 19, 2014) Chris Weafer is Senior Partner at Macro-Advisory, which offers bespoke Russia-CIS consulting. The key takeaway concerning the economy and the ruble from President Valdimir Putin’s press conference on December 18 is that the Kremlin does not have any strategy or plan to try

How does the 2014 ruble crisis compare with the 1998 vintage?

File Photo of Cash, Coins, Line Graph

(Business New Europe – bne.eu – Ben Aris in Moscow – December 17, 2014) The ruble’s crash on December 15 from RUB53 to nearly RUB80 vs the dollar has caused many commentators to compare this crisis to Russia’s financial collapse in 1998. Is Russia really going into a full-scale meltdown for the fourth time in

Russia doomed to recession (excerpt)

File Photo of Cash, Coins, Line Graph

(Business New Europe – bne.eu – Ben Aris in Moscow – December 19, 2014) [Full text and charts here http://www.bne.eu/content/story/russia-doomed-recession] 1.0 Economics 1.1 Economics overview The mood amongst Russia watchers is as black as it has always been in the midst of one of Russia’s major crises. The forecasts for 2015 are almost – but not unanimously

Russian Media Downplay Extent of Ruble Crisis

File Photo of Cash, Coins, Line Graph

(Moscow Times – themoscowtimes.com – Howard Amos, Ivan Nechepurenko – December 17, 2014) While the ruble pinballed erratically between 58 and 80 per U.S. dollar on Tuesday, making headlines around the world, Russia’s state-run media have attempted to take a soft and conciliatory stance on the home currency’s woes. A news bullet by state-owned Channel

What awaits Russia’s economy in 2015 after ruble collapse?

Oil Well file photo

(Russia Beyond the Headlines – rbth.ru – Konstantin Korishchenko, special to RBTH – December 17, 2014) Konstantin Korishchenko is head of the stock market and financial engineering department at the Finance and Banking Faculty of the Russian Presidential Academy of National Economy and Public Administration, and a former deputy chairman of the Russian Central Bank.

Medvedev says ruble ‘undervalued’ as slide slows

File Photo of Dmitry Medvedev with United Russia Logos Behind Him

(Business New Europe – bne.eu – bne IntelliNews – December 17, 2014) Russian Prime Minister Dmitry Medvedev called the ruble undervalued at a meeting on December 17 with the top officials of the government, the central bank and heads of Russia’s largest exporters. He said that regulation of the currency market would remain based on

Picking through the ruble

Russian Central Bank file photo

(Business New Europe – bne.eu – MOSCOW BLOG: Ben Aris in Moscow – December 16, 2014) The Russian ruble crashed again on December 15, in the biggest fall since the last big crisis in 1998. The Central Bank of Russia (CBR) belatedly stepped in with a huge interest rate hike overnight, but it has been

STRATFOR: Viewing Russia From the Inside

Kremlin and Saint Basil's File Photo

(Stratfor.com – George Friedman – December 16, 2014) Last week I flew into Moscow, arriving at 4:30 p.m. on Dec. 8. It gets dark in Moscow around that time, and the sun doesn’t rise until about 10 a.m. at this time of the year – the so-called Black Days versus White Nights. For anyone used

Fears of Capital Controls Grow as Russia’s Economy Goes Haywire

File Photo of Cash, Coins, Line Graph

(Moscow Times – themoscowtimes.com – Howard Amos – December 17, 2014) The possible implementation of capital controls in Russia came a step closer Tuesday as the authorities appeared to be running out of options to stem the country’s dramatic currency collapse. The ruble defied an emergency interest rate rise of 6.5 percentage points announced overnight,

Business New Europe: “Better late than never?”

File Photo of Cash, Coins, Line Graph

(Business New Europe – bne.eu – MOSCOW BLOG: Ben Aris in Moscow – December 12, 2014) There is an obvious solution to help deal with Russia’s economic slowdown that is being exacerbated by the tumbling oil prices: do those reforms that should have been done ten years ago. It’s kind of obvious. But also just

Business New Europe: Flippant claim that ‘Russia is Spain’ is wide of the mark

Cash, Calculator, Pen

(Business New Europe – Henry Kirby in London – December 11, 2014) After months of downward pressure, the ruble went into near free-fall during the first week of December. From 36 to the dollar in early August, the Russian currency fell rapidly from 47 to 53 to the greenback in just a few days, amid

Business New Europe: Russia is running out of money – not…

File Photo of Cash, Coins, Line Graph

(Business New Europe – bne.eu – MOSCOW BLOG: Ben Aris in Moscow – December 11, 2014) There has been a spate of articles recently suggesting that Russia is on the edge of a complete economic meltdown. There was an article in the UK’s The Daily Telegraph suggesting that its economy has lost a third of

Moscow Times: Life After Putin: Teaching Future Russia

Skolkovo File Photo

(Moscow Times – themoscowtimes.com – Alexey Eremenko – December 11, 2014) The professional future is bright in Russia, where space geologists and airship constructors will be among the most in-demand professionals by the 2020s, according to an atlas of Russia’s future job market recently published by Skolkovo’s Moscow School of Management. But whether Russia will

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