Economic News in Review
Crisis, Sectors, and Domestic Policy in Russia
February, 2010

 

Ag

 

McDonald's supersize profits conquer Moscow

McDonald's came to Moscow 20 years ago to kickstart a fast-food revolution in the city - but two decades on some rivals believe big breaks are keeping Big Mac on top.

 

Auto

 

Russia unveils own 'cash for clunkers' scheme

In January Russia unveiled a scheme similar to those employed in the West to encourage consumers to buy new cars by handing out cash in return for their own ageing vehicles.

 

New Junk for Old Junk

Starting March 8, the government will ask Russians who own old foreign-made vehicles to exchange them for a certificate worth 50,000 rubles (approximately $1,700), good for purchasing a new Russian car or a foreign model that is produced domestically.

 

Business

 

DAVOS - Fear, uncertainty cast pall over Russian business

Russian businessmen at the World Economic Forum in Davos struck a gloomy note this week, with many uncertain about the country's direction and others warning a climate of corporate fear could hamper growth.

 

Kalashnikov Gun Factory Offers Food In Place Of Salaries

The management at a factory producing Kalashnikov guns in Russia's Kirov Oblast is paying its workers in food in place of their regular salaries this month.

 

Checking out Russian industry

It's the BMWs in the car park that often give the game away. That's what Derek Weaving, an electricity analyst at Renaissance Capital, finds when he goes inspecting various Russian power companies, to see how investors' money is being spent.

 

'Sunny with a chance of thunder'

While booming commodities digging Russia out of a crisis may have a familiar feel to it, a sobering new "post-crisis reality" is the hot topic in business circles.

 

Steel magnate is Russia's new richest man: report

Steel magnate Vladimir Lisin is Russia's new richest man after a year which saw all the top oligarchs in the country defy the financial crisis and increase their fortunes, a report said Monday.

 

Russia's Modern Oligarchs

As Russia emerges from the recent financial crisis, the Kremlin turns to an unlikely group of loyalists to help modernize the economy.

 

Domestic

 

Kremlin Aide Defends Russia's Top-Down Modernization

Vladislav Surkov, the Kremlin’s political strategist, defended the system of state control he developed, saying Russia can only modernize if it has a strong central government.

 

Russian president backs criminal law reforms to keep corrupt police from harassing businessmen

Russian laws must be changed to keep corrupt police from extorting money from businessmen and to allow suspects in economic crimes to be released on bail instead of being jailed, President Dmitry Medvedev said Friday.

 

Energy

 

Putin May Fine Tycoons For Low Utilities Investment

Russian Premier Vladimir Putin threatened on Wednesday to slap heavy fines on some of the country's top tycoons for not investing enough in the power sector, while praising Western investors.

 

Foreign

 

Luring foreigners, not expat Russians, key to innovation – Kremlin

Russia needs to attract a few of the best foreigners rather than lure Russian expats home if it is going to create its own "Silicon Valley," a senior Kremlin official told Vedomosti newspaper.

 

American lawyer flees Moscow

Jamison Firestone, the colleague of deceased lawyer Sergei Magnitsky, has publicly announced that he will not be returning to his Moscow office as he seeks to battle corruption from London.

 

Gas

 

Medvedev backs tighter oil controls, no action yet

President Dmitry Medvedev lent support to the idea of tightening state control over oil and refined products exports but stopped short on Friday of adopting proposals that would have effectively restored the Soviet-era monopoly.

 

Unconventional gas poses market dilemma

Russia has the world’s largest gas reserves - but may still need up to $200 billion in investment over the next decade.

 

Gazprom to discuss strategy as U.S. market set to slip away

Gazprom top executives are to hold a key board meeting as the energy giant faces up to the possibility of losing the U.S. market.

 

'Decisive Year' for Delayed Nabucco Pipeline Project

A natural gas glut, weaker demand and a tough financing environment in 2010 will likely slow the launch of the Nabucco pipeline, an already-delayed project aimed at reducing Europe’s dependence on Russian supplies.

 

New Ukraine leader may still drive hard bargain on gas

Ukraine's likely new president has a more pro-Russian tinge but Kiev's desperate public finances may mean he drives just as hard a bargain on gas issues as his confrontational, Western-leaning predecessor.

 

Indicators

 

Soaring imports threaten Russia's economic recovery – paper

Soaring imports into Russia registered in the fourth quarter of 2009 threaten the country's economic recovery and may plunge it into a new economic decline, a business paper reported on Thursday.

 

Russia Suffered Record Economic Contraction in 2009

Russia’s economy shrank the most on record in 2009 after the price of oil slumped 77 percent from peak to trough and left businesses to start the year trying to adjust to smaller profits as banks cut off credit.

 

Investment

 

Russia is World's Cheapest Stock Market: Strategist

The Russian stock market is the cheapest major market in the world and will be driven higher by disinflation, as long as oil stays above $60 a barrel, Kingsmill Bond, chief strategist at Troika Dialog, told CNBC Thursday.

 

Opening Remarks at Meeting on Investment Climate in Russia

In his speech at the meeting the President stated that investment activity is a key factor in the modernisation of Russia's economy.

 

Russian markets have recovered with the oil price

Greater oil price stability should encourage investors to look afresh at Russian markets as a high-growth, low-debt story, linked to the Asian boom.

 

Foreign investment in Russia over $40 bln in 2009

The inflow of foreign investment into Russia exceeded $40 billion last year, the government press service said on Tuesday.

 

IT

 

Silicon Valley luminaries become technology ambassadors to Russia

Silicon Valley is playing a much larger role in international diplomacy in the Obama administration than in the Bush administration. That’s in large part thanks to Jared Cohen, who has played a role in both.

 

eBay opens shop in Russia

After several years of eyeing up the Russian market, US auction web site eBay is finally banging its gavel in Moscow, rolling out a Russian-language version that will enable users to buy and sell goods in roubles.

 

Russia to facilitate visas for foreigners in high-tech projects

The Russian government will simplify visa and migration procedures for foreigners involved in investment and high-tech projects in Russia, President Dmitry Medvedev said on Friday.

 

Labor

 

Russian unemployment: massaging the stats

The crisis hit Russia’s developed regions first and hardest and the government reaction to the situation was further proof of the shortcomings of the current system of government

 

Retail

 

IKEA sacks two executives over Russia bribes

Swedish furniture retailer IKEA sacked two executives for turning a blind eye to bribery by a subcontractor in Russia, just months after it halted expansion in the country because of bureaucratic hurdles.

 

State

 

Russia to offer stakes in state companies at auctions - Kremlin aide

The Russian government intends to hold auctions in the coming months to offer stakes in state companies as part of a program to privatize government shareholdings, a Kremlin economic aide said on Tuesday.

 

Russia's Medvedev seeks clarity on state firms pay, bonuses

Russian President Dmitry Medvedev wants state-run firms to put bonus and pay packages in place which would follow the latest global practices, however the timeline he has set may be too late for this year's bonuses.