Economic News in Review
Crisis, Sectors, and Domestic Policy in Russia
July-Aug, 2009

 

Agriculture / Food

 

State Should Monopolize Alcohol Production - Audit Chamber

Audit Chamber chairman Sergei Stepashin called for introducing state monopoly over alcohol production, as the share of illegal vodka on the Russian market is estimated at 30 to 50 percent, worth 70 bln roubles.

 

Banking

 

93 Percent Of Russians Plan No Borrowings For Next Six Months – Poll

Ninety-three percent of Russians do not plan borrowings in the next six months, the Russian Public Opinion Study Center (VTsIOM) said with the reference to a poll of 1,600 adults in 42 regions on June 6-7.

 

Business Commentary

 

1,103 Data Points On Russia's Development As A Market Economy & Rule Of Law Society

Albeit only a snapshot in time, they speak to the normalcy of the business of law in contemporary Russia.

 

Russia One Of Toughest Countries For Business - Report

Russia ranked as one of the most closed economies in the world in a report issued on Tuesday that coincided with U.S. President Barack Obama's visit to Moscow which sought to boost trade and investment ties.

 

Domesticating Russia's Economic Crisis

In a recent conference in Moscow, participants were asked to suggest policies that could get Russia out of its economic crisis. None of them, economists included, said much about the economy. The focus, rather, was on politics…

 

Currency

 

Ruble Drops for Seventh Day as Russia Predicts Deeper Recession

The ruble fell for a seventh day against the central bank's basket of dollars and euros as Russia said the economy may shrink more than previously estimated.

 

Ruble Gains Most in Decade as Oil Tops $64, Copper Rallies

The ruble gained the most against the dollar in a decade as oil above $64 a barrel and rising metals prices spurred optimism the world's biggest energy exporter will benefit from a global economic recovery.

 

Domestic Policy

 

Russia Aims to Lift Economy With Spending Boost as Growth Slows (full text available for subscribed users)

Russia will allow a bigger budget deficit next year in an attempt to revive its economy, according to a proposal approved Monday by the government.

 

Russia Missed Out On Chance To Improve Its Roads

Infrastructure spending rose during boom times but failed to trickle down to the roadways partly due to graft. The abysmal network has become a drag on the economy and a horror story for truckers.

 

The Russian Road To China

Since Vladimir Putin rose to the pinnacle of power nearly a decade ago, the Russian elite has been fond of holding up the orderly Chinese model of authoritarian economic modernization as a better path to follow than chaotic and messy Western-style democracy.

 

Double Power

From one crisis to another - the number of government officials doubled.

 

Competitive Enterprises To Solve Single-industry Towns Problems – Aide

Problems experienced by single-industry towns in Russia can be solved not just by paying back wages and keeping the jobs, but by creating up-to-date and competitive enterprises there, Russian presidential aide Arkady Dvorkovich said.

 

Average Bribe Amount In Russia Tripled - Interior Ministry

An average amount of a bribe in Russia has almost tripled as compared to last year and exceeded R27,000 (about 900 dollars at the current exchange rate).

 

Present Structure Of Russian Economy Has No Future - Medvedev

Russian President Dmitry Medvedev says Russian economy will have no future unless its structure is changed.

 

Putin Urges Regions To Live According To Their Means

Prime Minister Vladimir Putin urged regions to live according to their means and stop inflating budget expenditures.

 

Foreign Business / Policy

 

Obama's Russian Business Plan

In meetings with Medvedev and Putin, Obama will seek an improved atmosphere for U.S. investment. That would benefit both nations, but the list of sticking points is long.

 

Russia – U.S. Joint Working Group On Investment And Institutional Integrity Presents Recommendations To President Obama

In Moscow, the Russia-U.S. Joint Working Group on Investment and Institutional Integrity provided its recommendations to President Barack Obama on cooperative efforts between the two countries to strengthen governance, integrity and transparency in Russia.

 

Gas and Oil

 

Turkey Hopes Russia, Iran Will Join Nabucco Gas Pipeline Project

Turkish Prime Minister Recep Tayyip Erdogan invited Russia and Iran to join the Western-backed Nabucco gas pipeline project intended to pump natural gas to Europe.

 

Pipeline To Nowhere

The recent signing of the Nabucco pipeline project is definitely a political rather than economic deal.

 

Indicators

 

Drop In Russian Industrial Output Slows

The steep drop in Russia's industrial output slowed in June, officials said on Wednesday, a development which the government touted as a sign that the crisis-battered economy is on the verge of recovery.

 

Russia Near Bottom, Faces New Risks In 2010 - EconMin

Russia's economy will likely take first steps towards recovery in the third quarter, but the start of 2010 will bring the risk of a second wave of economic crisis, Deputy Economy Minister Andrei Klepach said on Thursday.

 

Russia's Economic Decline Over Fairly Soon, Long Recovery

Interview with Shigeo Katsu, World Bank Vice President for Europe and Central Asia Region.

 

Withdrawal Of Capital From Russia To Offshore Cos Growing

Russia's federal financial monitoring agency registers a growing withdrawal of capital from the country to offshore companies' accounts, a Rosfinmonitoring official told Itar-Tass.

 

Investment

 

No Water, No Float – Russian Regulator Set to Revise Listing Rules

Although the desire to bolster Russia’s own floundering equity markets is an admirable one, the new regulations risk cutting off the nose to spite the face, in the end limiting rather than enhancing Russian companies' ability to raise capital and grow.

 

Foreign Investors In Russia Are Feeling The Squeeze

Moscow's key political objective of maintaining social stability despite dwindling revenues could begin to place regional officials between a fiscal rock and a political hard place. As that pressure mounts, foreign investors may be among the first to feel the squeeze.

 

Labor

 

Number Of Russians Unhappy With Their Finances Increases - Statistics Agency

The Russian Federal Statistics Service (Rosstat) has reported its latest figures for people's assessments of the current economic situation in Russia and consumer confidence.

 

Workers Are The Real Target

The crackdown against the Cherkizovsky market in northeast Moscow is another example of heavy-handed tactics towards migrant workers and traders in the city, and raises the prospect of a further rise in racism and ultranationalism.

 

Number Of Russians Drinking Alcohol Not Changing Significantly – Poll

The number of Russians drinking alcohol has not changed significantly over the past 13 years, and the number of those drinking alcohol every week has grown, especially in small towns and among young people.

 

Russians' Drinking Leaves Medvedev 'Breathless'

President Dmitry Medvedev has declared a war on yet another public evil - alcoholism this time -- and vowed to wage it "decisively but carefully", avoiding "stupid bans".

 

Russian Population To Decline To 110 Mln By 2050 - Survey

Russia's population is expected to decline to 110.1 million people by 2050, according to a survey of demographic trends by the Population Reference Bureau organization, published on Wednesday.

 

Pharmaceuticals

 

Conquering A Continent

"Russia isn't a market – it's a continent!" said Jostein Davidsen, general director of Nycomed Russia-CIS & senior vice president of the Nycomed Group, at a recent press conference in Moscow. How does one go about conquering a continent?

 

Real Estate

 

Putin Warns Against Return To Soviet-era Communal Flats

Prime Minister Vladimir Putin has called not "to breed" new communal flats when resettling tenants from shabby buildings, Putin declared, speaking at a meeting of the presidium of the Russian government.

 

Retail

 

What Will Become of Them?

The closure of Eastern Europe’s largest outdoor market in Moscow has sparked a row about the social consequences.

 

Travel

 

Russian Tourism Down … Except for Space Flights

While the tourist industry is set to experience a fall in revenues, Russia has vowed to continue offering a relatively new destination — space.