Russian Economy/Finance : News and Discussion

[Shurik SST]

IMO Russia definitely has the potential to beat German GDP, both overall and per capita. I doubt Russia has the potential to beat China on overall GDP.

Russia just needs a few more years of stability and sustained investment which I firmly believe it will get with Putin in charge. Also, and this is the big reason for the Eurasian economic integration and WTO, as Russia engages a wider economic space in trade, it will likely be well set to grow its GDP. For all its shortcomings on not being geographically well positioned during the great economic growth in the Western Europe/North Atlantic area during late 1800s/1900s. I think Russia is well positioned to take advantage of the upcoming Chinese/East Asian developments. Russia is investing in their Far East, trying to build gas lines to Korea, has good ties to Vietnam, India, has projects and deal going on with China and is trying to exploit its position between China and Europe. There is good potential there.

[AustinJ]

Yes Russia overtaking German economy is a possibility if stable economic conditions and reforms are ensured in the next 6 years of Putin government , China seems to be long shot.

Which reminds me of another related question .

How much role does debt-to-GDP ratio plays in projecting true GDP figures , US has a debt of equal to GDP or a little more , German debt figures revised stands at 79 % of GDP , similarly China has a Debt of 16 % and India 60 %.

1 ) Russia has a low GDP/Debt ratio of 11 % , Doesnt these high public Debt hide the true GDP figures ?

2 ) Russia is also spending 23 trillion roubles on Military , How much percentage of Industry and Employment does MIC in Russia provides ?

[Mackie]

As long as they are one of the most corrupt country in the world and the Putin mafia tries to control the fragile economy, they will never play in the 1st league.
You need black suitcases with dollars to make a safe investment in Russia. I don't know a company who survives there without it.

[Mousepad]

You need black suitcases with dollars to make a safe investment in Russia. I don't know a company who survives there without it.

Microsoft and IKEA from the top of my head.

[Mackie]

Microsoft and IKEA from the top of my head.

You don't get it.
Where is the origin of corruption? In the country or the companies who want to invest?

[Mousepad]

You don't get it.
Where is the origin of corruption? In the country or the companies who want to invest?

I would say both (apart from 2 i listed - they operate clean) all worth foreign companies quite proficient at palm-greasing, who is more guilty, i say hosting nation fcoz, but to say that corruption is solely business-killer is overstatement, look at China. now that's corruption, in Russian case i blame logistics, it's nightmarish, rising oil is not helping either, and unlike China we don't demolish property left and right just for the foreign investor convinience and labor force demand pay on East-European scale, so for production of cheap rubber sh/t - Russia is not a place of choice.

[Breakfast in Vegas]

I would say both (apart from 2 i listed - they operate clean) all worth foreign companies quite proficient at palm-greasing, who is more guilty, i say hosting nation fcoz, but to say that corruption is solely business-killer is overstatement, look at China. now that's corruption, in Russian case i blame logistics, it's nightmarish, rising oil is not helping either, and unlike China we don't demolish property left and right just for the foreign investor convinience and labor force demand pay on East-European scale, so for production of cheap rubber sh/t - Russia is not a place of choice.

IKEA was one of (maybe the first) foreign major to challenge Russian corruption straight on and actually win. At least that is how the legend goes... there was a book written about it, and a documentary as well IIRC.

[Mackie]

I would say both (apart from 2 i listed - they operate clean) all worth foreign companies quite proficient at palm-greasing, who is more guilty, i say hosting nation fcoz, but to say that corruption is solely business-killer is overstatement, look at China. now that's corruption, in Russian case i blame logistics, it's nightmarish, rising oil is not helping either

I know several companies who either had to bribe local officials or high ranked ones of the Putin mafia.
And this experience goes hand in hand with the corruption index.
Russia has potential. But not with this bollocks in the government.

, and unlike China we don't demolish property left and right just for the foreign investor convinience and labor force demand pay on East-European scale, so for production of cheap rubber sh/t - Russia is not a place of choice.

The problem is that Russia is still a way higher risk than China.

[Flagg]

IMO Russia definitely has the potential to beat German GDP, both overall and per capita. I doubt Russia has the potential to beat China on overall GDP.

Russia just needs a few more years of stability and sustained investment which I firmly believe it will get with Putin in charge. Also, and this is the big reason for the Eurasian economic integration and WTO, as Russia engages a wider economic space in trade, it will likely be well set to grow its GDP. For all its shortcomings on not being geographically well positioned during the great economic growth in the Western Europe/North Atlantic area during late 1800s/1900s. I think Russia is well positioned to take advantage of the upcoming Chinese/East Asian developments. Russia is investing in their Far East, trying to build gas lines to Korea, has good ties to Vietnam, India, has projects and deal going on with China and is trying to exploit its position between China and Europe. There is good potential there.

I used to think the same.

After conversations with folks capable of making big investments in Russia and the Russian sphere kablamistans the best guess is that Russia and its sphere will be severely impaired in the next cyclical commodity downturn.

Too much emphasis and reliance on commodities, too corrupt and economically limited due to family and insider controlled economic activity.

Foreign investment capital views Russia and its sphere little different than a bunch of Nigerian scam artists it would appear.

[Mackie]

Overall the BRIC community has to reform and probably reinvent themself.
Along with growth, there was always a high inflation rate hurting the competitivness.
Now they have to improve other factor in the business enviroment.

[Ataman]

I know several companies who either had to bribe local officials or high ranked ones of the Putin mafia.
And this experience goes hand in hand with the corruption index.
Russia has potential. But not with this bollocks in the government.

Bribes are very common, not only in the Eastern part of Europe. It's usually only a way to accelerate the process (bureaucracy etc.).
While the government should do more about this (especially about the awful bureaucracy which makes it really hard to do business...) I don't agree with your idea of "Putin mafia".

[Mackie]

Bribes are very common, not only in the Eastern part of Europe. It's usually only a way to accelerate the process (bureaucracy etc.).
While the government should do more about this (especially about the awful bureaucracy which makes it really hard to do business...) I don't agree with your idea of "Putin mafia".

Sorry. But you can't compare the level. I talk about millions to bribe Russia officials just to get a licence to build a plant. I think even Putin knows this and if IIRC he also crtiticized it.
But even Putins needs the backing by his "family" and so we shouldn't expect a better situation in the near future.

[Herman the II]

Russia PM orders more action to halt ruble losses

Russian Prime Minister Dmitry Medvedev on Saturday ordered the central bank to step up currency interventions to halt the losses of the ruble, which this week hit its lowest level for three years.
The ruble came under its biggest attack since the 2008-2009 financial crisis as investors fled to safe havens amid the trouble in the eurozone and were also spooked by the falling price of oil.
Russia's central bank regularly intervenes to keep the ruble within a floating range against the euro and the dollar but Medvedev called for firmer action.

full:

http://www.google.com/hostednews/afp...7011c9673e.181

[geolocator]

But even Putins needs the backing by his "family" and so we shouldn't expect a better situation in the near future.

You don't understand. The whole system works to rip off business, so that no one, including Putin can make something to radically change it.
He doesn't need any support from what you call "family", actually it looks like he, like a typical FSB officer, keeps people on who he has compromat
and so he has complete power in the system. But in practice a single man can't control everything.
I'm highly sceptical that Putin is the man who can change the business environement in Russia.

[Breakfast in Vegas]

You don't understand. The whole system works to rip off business, so that no one, including Putin can make something to radically change it.
He doesn't need any support from what you call "family", actually it looks like he, like a typical FSB officer, keeps people on who he has compromat
and so he has complete power in the system. But in practice a single man can't control everything.
I'm highly sceptical that Putin is the man who can change the business environement in Russia.

I tend to agree with you.