14.07.09
Economic News in Review
Crisis, Commentary, and International Outlook
June, 2009
Agriculture / Food
Agriculture Prepared For Crisis Better Than Industry – Medvedev
Agriculture in Russia turned out to be better prepared for the crisis than industry, said President Dmitry Medvedev in a conversation with Channel One Current Affairs Programme Anchor Kirill Kleimenov.
Russia's Medvedev Says Govt To Keep Aiding Auto, Farm Industries
Russian President Dmitry Medvedev the government would keep aiding the real economy, including the auto and agriculture industries.
Weathermen Forecast Record Harvests Of Grain Crops, Fruit, Vegetables This Year
Russia is expected to gather record harvests of grain crops, fruit and vegetables this year, the country's weathermen forecast proceeding from meteorological monitoring in various Russian regions.
Russia Could Become The World's Second-largest Grain Exporter
Russia is now the world's fourth-largest grain exporter – after the USA, the EU, and Canada. It should move up to second place in the next few years.
Russia plans leading food role, no grain OPEC
The United States warned aspiring WTO member Russia against a global grain cartel on Sunday as ex-Soviet states instead proposed a Black Sea trade bloc that could overtake Washington as the world's top exporter.
Russia's ambitious food plan needs big money
The Kremlin's pledge to ease a world food shortage needs investment in port capacity and farming know-how if Russia and its Black Sea neighbors are to usurp the United States as the world's biggest grain supplier.
Russia Profile: The Fast Food Godfather
Rostislav Ordovskiy-Tanaevsky Blanco came to the Soviet Union in the 1980s as a representative for Kodak. He now runs many of Russia’s most popular and successful restaurant chains, including Rostics, Planet Sushi, El-Patio, TGI Friday, Santa Fe, and Café De Artistes.
Russia Profile: The Butcher’s Sorrow
Russia will not be able to meet domestic demand for meat on its own any time soon.
Russia Profile: The Blessed, Cursed Grain
Despite boasting the largest amount of plowed land in the world, Russia fails to make finished products out of its own crops.
Russia Profile: A Battle of the Titans
In the past few years, both local and foreign food retail chains have seen extraordinary growth on the Russian market.
Russia Profile: On Foreign Territory
WalMart reaffirms its intention to enter the Russian market despite global financial turmoil.
Vladimir Putin humiliates Russian supermarket chiefs over expensive sausages
In keeping with a new strategy of deflecting blame for the country's economic woes onto the standard-bearers of Russian capitalism, Mr Putin excoriated supermarket executives for their greed as ordinary shoppers looked on in bewilderment.
Banking
Situation In Russia Stabilizing, Past-due Debt Still A Problem – Ignatyev
The situation in Russia is better than expected although problems remain with mounting debt on loans, CB Chairman Sergei Ignatyev said at a meeting with President Dmitry Medvedev in the Kremlin.
The Federal Tax Service’s Bad Lists
The Federal Tax Service (FTS) has decided to support banks in its own way.
Western Banks Woo Russia's Rich
Russia has been hit especially hard by the global economic crisis, with unemployment surging and incomes plunging. But that isn't deterring some Western banks, which are betting Russia's rich will be on the rebound soon.
Quarter of Russian families in debt, poll says
Survey conducted earlier this month by the authoritative All-Russia Center for the Study of Public Opinion has found that 26% of Russian families have outstanding debt, Prime-TASS reports.
Business Commentary
Former Judge Slams Medvedev's Plans To Appoint Constitutional Court Head
Presidential amendments to legislation concerning the procedure of appointing the Constitutional Court chairmen and their deputies have put an end to one of the most democratic procedures, the election of the Constitutional Court chairman, retired judge of the Constitutional Court Tamara Morshchakova has said.
Deripaska, Rebuked, Urges Russia to Fix Economy
Oleg Deripaska, the Russian billionaire rebuked by Prime Minister Vladimir Putin for wage arrears, said the government should do more to improve the economy if it wants businesses to succeed.
Summary of “Who governs the Russian economy?”
A cross-section of Russia's largest corporations. Electronic publication of Pan-European Institute.
How Will Russia's Economy Emerge from the Crisis
The United States faces historic challenges in surmounting the global financial crisis, adopting a strategy for long-term economic growth in the context of a rebalanced world economy, investing in the nation's intrastructure and productive economy and restoring the link between productivity growth and wages.
Russian Growth Won’t Resume on Higher Oil Prices, Goldman Says
Russia’s economic slump may deepen in the second quarter to an annual contraction of 10.9 percent because rising oil prices won’t spur growth without a recovery in lending, according to Goldman Sachs Group Inc.
Russian Federation - Russian Economic Report 19: From Crisis to Recovery
The global recession has deepened, with larger than expected declines in output and employment in many countries, Russia included. Global output is now expected to decline a full 2.9 percent in 2009, with high-income countries hit hardest.
Putin tells Russian casinos to cash in their chips
Nearly two decades after the Soviet collapse set Russia's roulette wheels spinning again, Prime Minister Vladimir Putin is calling in the chips on the gambling industry — a symbol of the glitz and excess of Russia's oil-fueled boom.
Energy-rich Russia Hit Hard by Global Financial Crisis
After a decade of economic growth due in large part to energy revenue, Russia is reeling from the global financial crisis and the drop in oil prices and production.
Currency
Russia's fiscal hawk reins in currency ambitions
The finance minister pulled back on Russia's aspirations for the ruble to emerge as a regional reserve currency in the near future, saying Saturday it would likely first happen in China.
Kudrin Says Russia Has Full Confidence in Dollar
Russia has full confidence in the dollar and there are no immediate plans to switch to a new reserve currency, Finance Minister Alexei Kudrin said.
Russia seeks currency debate at first BRIC summit
The leaders of the world's biggest emerging markets demanded a greater say in the global financial system on Tuesday at their first summit, but steered clear of any assault on the U.S. dollar's dominance.
Domestic Policy
Russia's Putin signs 2009 economic stimulus plan
Russian Prime Minister Vladimir Putin said Friday he had signed an economic stimulus plan for 2009.
Energy
Energy Saving In Russia Requires Economic Measures And New Mentality
President Dmitry Medvedev said energy saving in Russia would require not only organizational and economic measures but also new mentality.
Foreign Business / Policy
Russia's Putin Warns Against Becoming Obsessed With Import Substitution
Russian Prime Minister Vladimir Putin believes that it makes no sense to make achieving import substitution an end in itself for the Russian economy.
Gorbachev For Economic Space Of Russia, Belarus, Ukraine, Kazakhstan
Former Soviet President Mikhail Gorbachev has called for getting back to the idea of a free economic space of Russia, Belarus, Ukraine and Kazakhstan.
Russia Has Conditions To Become Leader In Terms Of Life Quality And Global Influence
Conditions for preventing internal and external threats to national security have been created in Russia, says the Russian National Security Strategy for the period up to 2020 approved by President Dmitry Medvedev.
Russia Stops Being Leading Trade Partner In Transcaucasia, Central Asia – IMF
Russia is no longer a leading trade partner in Transcaucasia and Central Asia due to the world economic crisis.
Only One Economic Leader Can’t Overcome World Crisis - Putin
Russian Prime Minister Vladimir Putin believes that only one economic leader cannot overcome the world crisis.
Customs Union Does Not Mean Russia Gives Up WTO Ambitions – President
Russian President Dmitriy Medvedev believes that the establishment of the Eurasec (Eurasian Economic Community) Customs Union, the treaty on which was signed in Moscow on Tuesday (9 June), does not mean that Russia is giving up on accession to the WTO (World Trade Organization).
Address to St Petersburg International Economic Forum’s Plenary Session
Most experts think that the global crisis has reached its peak and that we are in the middle of the deepest recession in decades. We discussed the economic crisis at last year’s forum, as those present last year will remember.
Answers to Questions during St Petersburg International Economic Forum’s Plenary Session
Excerpts from Meeting with Chief Executives of International Corporations and International Banking Community Representatives
But I think we still have a long way to go before fully emerging from the crisis. Perhaps even more important is the lessons that we learn from it. There are macroeconomic lessons to be learned, and they are perhaps the most obvious, since we have all realised just how interdependent we are today.
Russia slams foot-dragging over IMF reform
Developed nations are dragging their feet over reforms of the International Monetary Fund, where Moscow wants to have a greater say, Russian Finance Minister Alexei Kudrin said on Saturday.
Money-Saving Measures Visible At Economic Forum
President Dmitry Medvedev did not miss the chance to make the connection between the weather and the crisis.
U.S.-Russia trade has grown, despite strains
President Barack Obama travels to Russia next week for talks with Russian President Dimitry Medvedev on nuclear disarmament and a range of other issues.
Gas and Oil
Review: Old Fields Or New? The Oil Tax Debate Continues...
Russian oil companies talked about the need to dispense with natural resource extraction tax (NRET), which taxes revenue, in favor of a new system of taxation based on earnings, towards the end of 2008, when the global financial crisis had started to take its toll.
Kudrin: Oil May Stay Near $50 A Barrel For 3-5 Yrs
The price of oil may hover near $50 a barrel for the next three-five years, Deputy Prime Minister and Finance Minister Alexei Kudrin said.
Ukraine Gas In Question
Gazprom will not stop gas deliveries to Ukraine even if Neftegaz fails full and timely payments for this May, Gazprom CEO Alexei Miller said on Tuesday.
Russian Ambassador To Ukraine On Modernization Of Ukrainian Pipelines
Steady operational maintenance of Ukraine's gas pipeline system requires an annual investment of 1.5 to 2.0 billion U.S. dollars, Russian ambassador in Kiev Viktor Chernomyrdin, who was one of the founding fathers of the gas producer and exporter Gazprom, said in an interview with Vesti news channel.
Gazprom criticises EU 'uncertainty' on gas supplies
Europe must decide if it wants more Russian gas pipelines, or else Russia's Gazprom may make more liquefied natural gas (LNG) that can be sent to Asia and America, a top company official said Tuesday.
Gazprom aims to supply 5-10 pct of US gas needs
Russian gas export monopoly Gazprom (GAZP.MM: Êîòèðîâêè) plans to raise deliveries to the United States and eventually supply up to 10 percent of the world's biggest economy's gas needs, a senior company official said on Tuesday.
Reports: Russia pledges to keep up oil output
Russia is not planning to reduce oil production in the next few years and is considering help for companies that discover sizable oil and gas fields, a top oil official said Wednesday, according to national news agencies.
New Era For Gazprom, As Gas Giant's Fortunes Plummet
Just a year ago, Russia's state-owned gas giant Gazprom was the third-most valuable company in the world, worth some $350 billion. Now, it has shrunk by two-thirds to about $120 billion, declining to the world's 40th-largest company, according to "The Moscow Times" on May 27.
Old Fields Or New? The Oil Tax Debate Continues...
The Finance Ministry and Energy Ministry have differing views on how to prioritize the tax stimulus. The Finance Ministry thinks the windfall earnings tax should only apply to new fields during the initial stage.
A Troubled Pipeline
Nabucco, the natural-gas pipeline running from Central Asia to Austria via the Balkans and Turkey, has run into trouble from an unexpected quarter.
Gazprom Warns Europe Against ‘Fetish’ for New Gas Suppliers
Europe should avoid turning its drive to diversify sources of natural-gas imports into a “fetish” that could alienate Russia, OAO Gazprom Chief Executive Officer Alexei Miller said.
Gazprom is losing Europe
European gas consumers are frantically looking for an alternative to Russian natural gas. At the same time, Russian energy giant Gazprom is doing its best to control all gas supplies from the Commonwealth of Independent States.
Indicators
The Economy Is Falling Faster
GDP drop reached double digits in April. Has Russia's economy hit bottom?
Medvedev Disagrees With Govt Ministers' Excessive Optimism
Russian President Dmitry Medvedev addressed the Cabinet to make public personally - for the first time ever - the highlights of his budget message for 2010, to be submitted to parliament next autumn.
Growth In Prices Temporarily Slows
In agreement with Reuters’ prognosis for 2009, analysts expect inflation to decrease sharply.
The Land Of Statistical Paradoxes
Russia's statistics service is turning into a propaganda tool. Seeking reasons for discrepancies in economic statistics.
Economy Keeps Nosediving Despite Optimistic Forecasts
The crisis keeps pounding the Russian economy. The GDP in the first quarter of this year has shrunk by 9.5 in real terms. Analysts say the collapse of big industries was the chief factor.
Infrastructure
Russia Needs To Build Extra 250,000 Km Of Roads By 2030
Russia has to build extra 250,000 kilometres of roads until 2030 to ensure normal functioning of the economy, Deputy Transport Minister Oleg Belozerov said in an interview with the Vesti news channel.
Investment
Russia's dismal investment climate
Legal and bureaucratic caprice is still undermining foreign investment.
IT
Number Of Internet Users In Russia May Grow By 34% In 2009 – Minister
The number of Internet users in Russia may grow with last year's speed in 2009, Communications and Mass Media Minister Igor Shchyogolev said on Tuesday.
Innovative economy needs major reforms
Rosnano CEO Anatoly Chubais says developing an innovative economy involves major reforms, and thinking strategically.
Opening Address at Meeting of Commission for Modernisation and Technological Development of Russia's Economy
The opening meeting of the Commission of Russian Federation on modernization and technological development was held in a large conference room of old NAYADA partner, Kaspersky Lab.
Labor
Pundits disagree whether Putin's actions encourage protests in Russia
The deadlock in the town of Pikalevo, racked by local people's high-profile protests, has been broken after a visit by Russian Prime Minister Vladimir Putin on 4 June.
Russia suffering brain drain as talented youth move overseas
If the future of a country is its young, then it seems Russia has a problem. As the country's economy slumps, more and more qualified young Russians are heading overseas to study, work and live. The Government is trying to convince them to stay by releasing plans for social and economic development. But researchers say Russia needs to do more, not only to plug the brain drain but also attract skilled workers from overseas.
Russian Defence Ministry Has No Plans To End Conscription - Deputy CGS
The Russian Defence Ministry is not considering the possibility of switching to a fully contract-based army.
World Agenda: Putin's grand gesture cannot hide Russia's woes
Mr Putin has agreed to pay the unemployed cement workers 40 million roubles (£790,000)out of government funds. While the people of Pikalyovo are pleased by his intervention, those in thousands of other towns all over Russia are in equally dire straits and growing increasingly frustrated.
Fall in Russia jobless rate sparks recovery hopes
Russia's jobless rate unexpectedly fell for the first time in a year in May, data showed on Friday, in a sign that the country's first recession in a decade may have reached bottom.
Putin urges governors to control timely salaries at enterprises
Russian Prime Minister Vladimir Putin urged governors to supervise constantly timely payments of salaries at enterprises.
Making a Move
Even the economic crisis with its salary cuts and threat of unemployment is incapable of forcing people to change their habits.
Mining and Lumber
Russia, a Lumbering Giant, Asks
To help the unemployed, Vologda, the cash-strapped region where Mr. Boiko lives, is giving residents something it has in abundance: lumber. The idea is that they'll build houses with it.
Commodity Rally May Falter on Supply, Speculators
Commodities, heading for the first quarterly advance in a year, may struggle to repeat their gains in the next three months as supply expands and speculators sell.
Retail
City declares war on kiosks
Moscow officials have once again declared war on kiosks and street vendors, this time promising to slash the number of retail points by more than four times - from 16,000 to 3,000.
Ikea Plans to Halt Investment in Russia.
IKEA said Tuesday that it was suspending further investment in Russia, apparently because of pervasive corruption and demands for bribes.
Travel
Tax Debts May Be Paid In Airports
Specialized payment terminals for repayment of debts may soon appear in Moscow airports.
Airlines Continue To Deny Service To The Disabled
State Duma Deputy M.B. Terentyev, using the refusal of service to a blind passenger as a springboard, suggested a piece of legislation which would alter the Air Code, which prohibits the refusal of service to people based on their disability.
