- Russia forces kill two suspected militants in Dagestan raid - Reuters May 20, 2012
- Russia Against Meddling - Manila Bulletin May 20, 2012
- Red Wings' Pavel Datsyuk, Russia to play for world championship gold - Detroit Free Press May 20, 2012
- Joel Brinkley: Under Putin, Russia's relations with US turn icy again - Lincoln Journal Star May 20, 2012
- Russia plays Slovakia in hockey worlds final; Russia tops Finland 6-2 behind 3 ... - Washington Post May 20, 2012
The Russian Economy Has Undergone Massive Changes
The Russian economy has undergone massive changes since the fall of the Soviet Empire, transitioning from a state controlled, socialist structure to a more market-based and globally integrated economy. Economic reforms in the 1990s privatized most industries, and some energy and defense related sectors.
The Russian economy underwent tremendous stress as it moved from a centrally planned economy to a free market system. Difficulties in implementing fiscal reforms aimed at raising government revenues and a dependence on short-term borrowing to finance budget deficits led to a serious financial crisis in 1998.
Lower prices for Russia’s major export earners (oil and minerals) and a loss of investor confidence due to the Asian financial crisis exacerbated financial problems. The result was a rapid decline in the value of the ruble, flight of foreign investment, delayed payments on sovereign and private debts, a breakdown of commercial transactions through the banking system, and the threat of runaway inflation.
Russia, however, appears to have weathered the crisis relatively well. As of 2009 real GDP increased by the highest percentage since the fall of the Soviet Union at 8.1%, the ruble remains stable, inflation has been moderate, and investment began to increase again. In 2007 the World Bank declared that the Russian economy had achieved “unprecedented macroeconomic stability”.
Russia is making progress in meeting its foreign debts obligations. During 2000-01, Russia not only met its external debt services but also made large advance repayments of principal on IMF loans but also built up Central Bank reserves with government budget, trade, and current account surpluses. The FY 2002 Russian Government budget assumes payment of roughly $14 billion in official debt service payments falling due.
Large current account surpluses have brought a rapid appreciation of the ruble over the past several years. This has meant that Russia has given back much of the terms-of-trade advantage that it gained when the ruble fell by 60% during the debt crisis. Oil and gas dominate Russian exports, so Russia remains highly dependent upon the price of energy. Loan and deposit rates at or below the inflation rate inhibit the growth of the banking system and make the allocation of capital and risk much less efficient than it would be otherwise.
In 2003, the debt has risen to $19 billion due to higher Ministry of Finance and Eurobond payments. However, $1 billion of this has been prepaid, and some of the private sector debt may already have been repurchased. Russia continues to explore debt swap/exchange opportunities.
In the June 2002 G8 Summit, leaders of the eight nations signed a statement agreeing to explore cancellation of some of Russia’s old Soviet debt to use the savings for safeguarding materials in Russia that could be used by terrorists. Under the proposed deal, $10 billion would come from the United States and $10 billion from other G-8 countries over 10 years.
On January 1, 2004, the Stabilization fund of the Russian Federation was established by the Government of Russia as a part of the federal budget to balance it if oil price falls. Now the Stabilization fund of the Russian Federation is being modernized. The Stabilization Fund will be divided into two parts on February 1, 2008.
The first part will become a reserve fund equal to 10 percent of GDP (10% of GDP equals to about $200 billion now), and will be invested in a similar way as the Stabilization Fund. The second part will be turned into the National Prosperity Fund of Russian Federation. Deputy Finance Minister Sergei Storchak estimates it will reach 600-700 billion rubles by February 1, 2008. The National Prosperity Fund is to be invested into more risky instruments, including the shares of foreign companies. Shyhkin, Maxim. “Stabilization Fund to Be Converted into National Prosperity”. Retrieved 2007-08-02.
The Information About Great Russian Economy
Do you know about Russia? Russia is the largest producer of cars in Eastern Europe, and 11th among heavy truck manufacturers in the world. The country has dozens of auto factories that produce cars under the following major brands: Volkswagen, Skoda, BMW, Ford, Renault, Toyota, Chevrolet, Peugeot-Citroen-Mitsubishi, Nissan, Opel, Kia, and Volvo Truck. Russia dominates a number of spheres in the world: it’s 2nd by oil production and export; 1st by natural gas production and export; 1st by the production of aluminum, alumina, nickel, palladium, and titanium; 1st by diamond mining. It has one of the world’s largest uranium deposits, as well as copper and silver reserves. By electricity production, it’s 4th. By the length of railways, Russia ranks #2 in the world after the United States. By the length of highways, it takes 10th place in the world. Russia owns the world’s largest system of oil pipelines. The country is 5th in the world by the number of landline phones, 4th by the number of cell phones, and 8th by the number of Internet users.
Russia has numerous resorts, mainly on the Black Sea and in Caucasus. The popular tourist areas are: Saint-Petersburg, Moscow, the cities of the Golden Ring, Volga River, and Lake Baikal. Russian main exports are oil, gas, coal, steel, non-ferrous metals (aluminum, nickel, and copper), machinery, equipment, weapons, chemical fertilizers, and wheat. Russia’s main imports are: industrial machinery and equipment, cars and trucks, medicines, clothing and footwear.
The main food products produced in this country are: meat, sausages, fish products, vegetable oil, tea, wine, beer and mineral water. Russia exports beer to around 50 world countries. The country has one of the world’s leading agricultural machinery manufacturers; 10% of the world’s arable lands are in Russia. Main crops grown here are: grains, sugar beet, sunflower, potato, and flax. The main grain for export is wheat.
Russian economy is heir to the Soviet economy, which underwent substantial changes in the 90′s – after the collapse of the USSR. The main sectors of the Russian economy are: the service sector (49% of GDP), manufacturing (16% of GDP), mining (9.0% of GDP), construction (5% of GDP), agriculture, forestry and fisheries (4% of GDP), production and distribution of electricity, gas and water (3% of GDP).
Let’s take a look at this country’s wealth by area. Western Siberia is rich in oil and gas. Eastern Siberia is renowned for hydropower, nonferrous metallurgy, and the forest industry. The Far East is rich in gold, diamonds, and seafood. The Northern region has coal, oil, gas, metals, forests, and fish. The Central Black Soil Region and Northern Caucasus are known for their agriculture and food industry. North-West, Center, Volga-Vyatka, Ural, and Volga have prominent engineering, chemical industries, and energy production.
Russia’s poor are able-bodied inhabitants of villages and small towns, who have children. The country has a high proportion of residents at or below the official poverty line among education, culture and health workers. One of the major problems of contemporary Russia is a large difference in income between the rich and poor.
In late 2008 and early 2009, the Russian economy was hurt by the world crisis. Exports and imports declined, and cheap loans became out of reach. The crisis has triggered Russia’s stock market collapse, ruble devaluation, reduced GDP, lower income, and higher unemployment. Yet, the losses were lower than anticipated at the beginning of the crisis. In part this is due to the large-scale anti-crisis measures taken by the country’s government.
United Russia Pays PR Firm To Target Navalny
Given that Russian anti-corruption crusader Alexei Navalny coined “The Party of Liars and Thieves” as a euphemism for United Russia, it was only a matter of time before the Party of Power unleashed it’s “administrative resources” to discredit the blogger and his anti-corruption organization RosPil. According to Novaya gazeta, such a effort is already in the works as United Russia has given a Moscow PR firm 10 million rubles ($325,000) to unleash an black PR campaign against the blogger. The plot plans to include the following tactics:-
During a “brainstorming session” [at the PR firm] the idea was born to find a person who looks like Navalny and to hire a make-up artist to make him absolutely look like him, and shoot videos with him participating in various “compromising situations.” The idea was approved and the firm set to work on it. It was also agreed to launch a series of “exposés” using “documents” made with Photoshop.
They decided against the use of bots to spread the information. A headquarters was established with real users of social media and the recruiting of bloggers already began last week. The desired “qualifications”: the existence of a blog registered no later than January 2010 and having no less that 200 “friends.” On the next day, according toNovaya gazeta‘s source, almost 500 bloggers were already paid $100 per post on the Russian language section of Facebook, LiveJournal, and those that reside outside of Russia (the majority in Ukraine.)
- I, of course, assume that some of these bloggers for hire are affiliated with Nashi. After all, Nashi All-Father Vasilii Yakemenko denounced Navalny as an “enemy of the people” seeking to destroy the Russia. And dragging Navalny’s good name along the asphalt of the information superhighway was one of the ways they were going defeat his evil plot. So if you see a sudden uptick of anti-Navalny screeds on Nashi affiliated blogs, you’ll know why.
- Navalny, however, was hardly surprised. In response he told Novaya gazeta:
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“I read some kind of article from Alexei Chapaev, one of United Russia ideologes, that “Navalny feeds a great number of political technologists close to the Kremlin” for which they’ve allocated an enormous budget. I have no doubt that this struggle is not against me but against the movement that is associated with me, and it will grow as our work becomes more effective. I think that these people must go to prison. And we will apply all our strength so that they will sooner or later. You understand that the liars don’t want to go to jail and will defend themselves by any means.”
- In the meantime, Navalny has begun a contest for the best song about the “Party of liars and thieves.” You can see the entries here, here, here, here, and here. The winner gets 150,000 rubles (about $5000).
Russia Getting Meatier
There’s a lot of ways to measure the economic health of a country: per capita income, wealth, inequality, employment, poverty level, etc. The list is virtually endless. Another way is by measuring the average amount of meat a person consumes. Yes, meat, that juicy, protein filled delight, the consumption of which is a testament to people literally living off the fat of the land. Sure meat consumption can’t be reduced to wealth. A lot of other factors go into it too–culinary culture, religion, geographic location, climate, to name a few. Still per capita meat consumption statistics do seem to correlate to a population’s economic status.
Slon.ru reports that yearly per capita meat consumption in Russia is 63 kilograms per person. A respectable numbercompared to the rest of the world, but a good 40 to 50 kilos behind other meat-centric peoples like the Americans and Western Europeans. But where Russia’s carnivorousness places in global statistics isn’t the real point. What’s more revealing is how they compare to past Russian consumption.
As Slon.ru notes, the Putin years have witnessed a meat boom. In 1999, Russians consumed an average 41 kilos of flesh a year. That has shot up by 20 kilos in the last ten years. In this sense, whatever one says about Putin, he has brought home the bacon. Nevertheless, there are important regional differences. Assuming that the statistics collected by the Ministry of Health approach an accurate estimate, regional difference can be quite stark. For example, a person devours 99 kilos of meat in Kalmykia, while only 31 kilos in Dagestan. Or while the Ministry of Health says that the normal consumption of meat is 70-75 kilos a year, only 16 Russian provinces meet this norm. Only four regions average more than 80 kilos: Kalmykia, Moscow province, Yakutia, and Sakhalin. Slon.ru has provided a province by province breakdown.
The statistic that I find most interesting, and revealing about post-Soviet Russia is that while meat consumption has increased dramatically over the last ten years, it still falls short of the USSR peak of 69 kilos in 1989. A few other interesting things to note are that meat consumption rose a dramatic 10 kilos from 1985-1989, the perestroika years. Also, there were no statistics between 1989-1995, a sure indicator of the collapse of the Russian state. But when measurement of meat was resumed in 1995, consumption had plummeted to 50 kilos per person. It bottomed out in 1999, after the Russian economy crashed and burned, to around 41 kilos. Finally, meat consumption leveled off in 2008 when the economic crisis hit Russia, but began to rise a year later suggesting a strong recovery on an everyday level.