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Thread: The Russian economy (catch all)

  1. #281
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    Dayuhan--more on the falling Russian economy:

    Ruble Drops to Record as Russia Sanctions Fuel Dollar Shortage


    By Vladimir Kuznetsov and Ksenia Galouchko Sep 16, 2014 11:48 AM ET

    The ruble fell to a record for a fourth day as sanctions over the Ukraine crisis exacerbated a foreign-currency shortage in Russia, while the government canceled its ninth straight debt sale. Stocks advanced.

    The exchange rate tumbled 0.9 percent to 43.8454 against the central bank’s dollar-euro basket at 7:10 p.m. in Moscow, depreciating for a seventh day to a record low. That’s within 56 kopeks of 44.40, the level that would trigger the central bank to intervene. The Micex Index climbed 1.6 percent to a two-month high, led by OAO Sberbank, the nation’s biggest lender, which was named under expanded U.S. sanctions last week.

    Foreign-currency liquidity has come under pressure as the European Union and U.S. imposed new penalties to curtail access of Russian companies to their debt markets. The one-week dollar-ruble swap rate traded at the widest discount to the central bank’s main interest rate in six months today, signaling traders are willing to pay a premium for the U.S. currency.

    “Sanctions and closed access to foreign-exchange liquidity from the West” is feeding demand for dollars, Dmitry Polevoy, the chief economist for Russia and the Commonwealth of Independent States at ING Groep NV in Moscow, said in an e-mailed note. “The market is now targeting the upper boundary of the ruble corridor at 44.40.”

    The ruble, which has lost 15 percent of its value against the U.S. currency this year, depreciated as much as 1.4 percent to 38.9300 per dollar, before trading at 38.7145. It lost 1 percent versus the euro.

    Dollar Shortage

    The implied yield on a one-week swap fell for a third day to 6.43 percent, taking the spread over the central bank interest rate to minus 157 basis points, compared with minus 105 basis points yesterday.

    Foreign-exchange liquidity has “virtually dried out,” with volumes sinking to about $100 million per day, compared with $1 billion to $2 billion previously, according to Natalia Orlova, the chief economist for OAO Alfa Bank in Moscow.

    The currency pared declines after Deputy Finance Minister Alexey Moiseev said the ministry and central bank were discussing ways to alleviate the “structural” shortage of foreign currency in the market.

    “An injection of dollar liquidity by the central bank could push the ruble higher, back to 38 versus the dollar,” Moscow-based Sberbank CIB analyst Iskander Abdullaev said by e-mail.

    Auction Pulled

    Companies have $22 billion in dollar-denominated payments to make in September and local banks are “anticipating demand for hard currency from retailers and accumulating additional dollar liquidity,” Abdullaev said.

    “The geopolitical background remains unstable,” Dmitriy Gritskevich, an analyst at OAO Promsvyazbank, said in an e-mailed note. The ruble may move “without any serious obstacles” straight to the upper limit of the dollar-euro basket, he said.

    Government bonds due in February 2027 climbed, sending the yield down four basis points to 9.66 percent, trimming the increase since President Vladimir Putin started his incursion into Ukraine’s Crimea region in March to 130 basis points. The Finance Ministry cited “unfavorable” market conditions today for pulling a domestic bond auction.

    Tougher penalties were announced last week even amid a cease-fire between pro-Russian separatists in eastern Ukraine and the government in Kiev, stoking concern Russia would retaliate with measures of its own and deepen the six-month crisis.

    Stocks rose after Ukraine’s parliament approved a law giving special status to two regions controlled by pro-Russian separatists. That boosted optimism the crisis may ease and sanctions would be lifted, Vadim Bit-Avragim, who helps oversee about $4.1 billion at Kapital Asset Management LLC in Moscow, said by phone.

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    Now the Yukos Two case:

    After the arrest of the Basneft oligarch owner yesterday the stock dropped this morning by a whopping 26%.

    Who needs sanctions when Russians shot themselves in their own feet--which just adds to the current sanctions misery.

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    Are sanctions working?---this tends to prove they are in fact hitting Russia hard--will they change Russia's stance---check the last sentence and one sees the economy will truly tank before Putin accepts "failure".

    From NYTs 17/9/2014

    MOSCOW — President Obama has warned Russia that “there will be costs” for its policies in Ukraine. European leaders and the head of the North Atlantic Treaty Organization have done the same.

    On Tuesday, an influential figure in the Russian political elite and a longtime aide to President Vladimir V. Putin drove home this argument.

    European Union and American sanctions have pushed Russia to a tipping point between growth and recession, Aleksei L. Kudrin, a former finance minister, told an audience of Western executives at a conference in Moscow hosted by the American chamber of commerce. Mr. Kudrin then outlined, in unvarnished and detailed terms, what awaits Russia if a fragile cease-fire in the war in eastern Ukraine breaks down: possibily a contraction over 5 percent lasting one to two years.

    “The ceasefire is important for everybody, and for Russia most of all,” Mr. Kudrin said. “We should study these consequences, and avoid a worsening of the situation.”

    Already, Mr. Kudrin said, sanctions have trimmed about 1 percent from Russia’s $2 trillion gross domestic product this year, with the effects now being felt beyond the tight coterie of businessmen deemed close to President Putin who first felt the sting. Economic growth slowed to what Citigroup projects will be 0.5 percent this year. Since January, $110 billion has left Russia as capital flight.

    Aleksei L. Kudrin, a former finance chief for Russia, said sanctions have trimmed about 1 percent from Russia’s $2 trillion gross domestic product this year. Credit Olga Maltseva/Agence France-Presse — Getty Images

    Faint consumer demand caused car and other durable goods sales to contract. Rosneft, the state oil company has asked for a government bailout. Yevraziya, a chain of sushi restaurants, closed in Moscow after the price of salmon doubled.

    Bob Foresman, the chief executive of Barclays bank in Russia, in a speech to the gathering cited a survey of businessmen’s views on the Russian economy, highlighting phrases like “fatigue,” “caution,” “false hope” and “false dawn.”

    In Ukraine this week, Separatist gunmen and the Ukrainian army are exchanging artillery fire daily over military objectives like a regional airport and a strategic village, Debaltsevo, northeast of Donetsk, where Organization for Security and Cooperation in Europe observers came under fire Sunday.

    If European leaders decide the cease-fire has failed, they have vowed to leave in place financial and oil industry sanctions imposed last week, rather than repeal them. That, Mr. Kudrin said, would stall the Russian economy with zero growth in 2015, or push it into a mild recession.

    If the European Union and United States escalate sanctions on the banking sector by prohibiting Russian banks from accessing SWIFT, the international secure money transfer system, the Russian economy will go into deep recession with a contraction of at least 5 percent lasting one or two years, Mr. Kudrin said.

    Turning inward and relying on a revival of domestic manufacturing and agriculture helped by the weakening ruble, the plan to fortify the Russian economy of so-called import substitution outlined by an acting deputy prime minister who also spoke at the gathering, is unrealistic, Mr. Kudrin suggested.

    Soft-spoken and with a wry sense of humor, Mr. Kudrin seems at times to almost take pleasure in pointing out the dismal realities of the global economy, when nobody else here will.

    Europe and the United States, the governments imposing sanctions on Russia, spend about $1.5 trillion on research and development annually, while Russia spends $20 billion, he noted. As such, Russia can never hope to replicate a wide range of these nations’ imported goods. The Russian government should designate only select niches of the economy for this policy, he said.

    The Russian leadership, he said, understands the costs but may be willing to pay them. Earlier, he described the economic blow as the price for Russia having a foreign policy independent of the United States.

    “At a minimum, two or three years are needed to resolve the questions,” of the Ukraine crisis, he said, even if no escalation takes place.

    “Until then, we won’t know what investment climate we have and the final state of our relations with the West,” he added, and the Russian economy will be in a “period of instability.”

    Mr. Kudrin, whose ties to Mr. Putin stretch back two decades to the city hall of St. Petersburg, where both worked, is retired from government. His is a rare public voice of a liberal wing of the Russian elite on the mounting economic costs of the war and sanctions. Kremlin watchers, though, are divided on whether such sentiments carry any weight now with Mr. Putin.

    One attendee at the conference questioned whether the Kremlin, already hurt by sanctions, sees no point in changing its behavior in Ukraine, citing Winston Churchill saying “If you’re going through hell keep going.”

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    Chart depicting the anticipated fall rate of the Rubel out to 2017/2018--and the Russian CB cannot do anything to stop it---might help in the end for exports but Russia does not export tons of manufactured quality products outside of oil and gas.

    http://t.co/amjn6bHA7C

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    The question is whether the economic oligarchs, both licit and illicit, have sufficient influence to persuade Putin to change course. Not sure anyone knows the answer to that question... we'll find out.
    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”

    H.L. Mencken

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    Quote Originally Posted by Dayuhan View Post
    The question is whether the economic oligarchs, both licit and illicit, have sufficient influence to persuade Putin to change course. Not sure anyone knows the answer to that question... we'll find out.
    Dayuhan--arrest a major oligarch who many say did his business by the book and letter of Russian law after Yukos---his company takes a 27% loss on it's stock and this is the Russian governments response.

    Today from Interfax:

    09:07
    PESKOV: WE ACKNOWLEDGE POSSIBILITY OF EMOTIONAL MARKET REACTION TO YEVTUSHENKOV'S SITUATION BUT THIS IS NOT REASON TO HINDER INVESTIGATIVE PROCEDURES

    That "emotional market reaction" was a total of 27.3% loss in stock value in a single day on a company estimated before the arrest of 8.9B USD.

    Does any current Russian government official including Putin "understand" the law of the markets and basic economics 101?

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    Quote Originally Posted by OUTLAW 09 View Post
    Dayuhan--arrest a major oligarch who many say did his business by the book and letter of Russian law after Yukos---his company takes a 27% loss on it's stock and this is the Russian governments response.

    Today from Interfax:

    09:07
    PESKOV: WE ACKNOWLEDGE POSSIBILITY OF EMOTIONAL MARKET REACTION TO YEVTUSHENKOV'S SITUATION BUT THIS IS NOT REASON TO HINDER INVESTIGATIVE PROCEDURES

    That "emotional market reaction" was a total of 27.3% loss in stock value in a single day on a company estimated before the arrest of 8.9B USD.

    Does any current Russian government official including Putin "understand" the law of the markets and basic economics 101?
    Now down to 33% by 1330 today---that means roughly 3B USD of wiped out shareholder values--and the Russians really understand economics?

    Evtushenkov’s investment company, AFK Sistema, dropped 33 percent to 24.558 rubles as of 1:39 p.m. in Moscow.

    “This is the new Yukos,” Vadim Bit-Avragim, who helps oversee about $4.1 billion in assets at Kapital Asset Management LLC in Moscow, said by e-mail. “The economy is doing poorly, sanctions have been imposed, and all there’s left to do is to seize tidbits that are left in the country.”

    Evtushenkov has a fortune estimated at about $7 billion, according to the Bloomberg Billionaires Index, making him Russia’s 19th richest person. Moscow’s Micex Index dropped 2.2 percent today as investors deemed the arrest as a sign of political instability in the world’s biggest energy exporter.

    “This directly hits the investment climate,” Vladimir Tsuprov, the St. Petersburg-based chief investment officer of TKB BNP Paribas, said by e-mail. “Many investors saw geopolitical risks and Ukraine as the main problem, underestimating the internal situation.”
    Last edited by OUTLAW 09; 09-17-2014 at 02:40 PM.

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    Russian humor:

    Russians joke over latest currency slide by renaming 50 Rb note "One Euro"
    pic.twitter.com/WsV53a0lA6 v

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    Dayuhan---notice in this article the particular refrence by Gazprom of sinking nautral gas reserves---yes they are playing with the delivery numbers due to the Ukraine--bot on the back side not delivering in the face of sanctions hurts the Russian cash flow when they need dollars--so something is more ongoing than politics.

    Look at the estimated figures up through 2017---the gas volumes are actually sinking strongly.

    Having come fro an oil background and having worked the oil/gas fields when one was young--there is a direct relationship to oil production and gas production especially in joint fields---where there is oil is always gas to be found.

    There have been strong net rumors of sinking oil production also mentioning 2017--here is your prove and it is from Yahoo of the mentioning of sinking oil reserves.

    Remember I did indicate by 2020 massive oil prodution losses as compared to now and you questioned the comment since it came from the web.


    Gazprom says unable to meet rising gas demand from Europe for now
    Reuters

    19 hours ago

    * Gazprom says adheres to supply contracts with Europe

    Gazprom Said to Face Biggest Decline in EU Revenue in 5 Years Bloomberg
    ( A side article really worth reading if you find it)
    Gazprom's Q1 earnings hurt by Ukraine, exports outlook worsened Reuters
    (Second intetesting artile worth reading)

    By Alexei Anishchuk

    MOSCOW, Sept 17 (Reuters) - Russia's Gazprom said on Wednesday it is unable to meet rising gas demand from Europe while it builds up stockpiles ahead of winter, undermining the ability of Europe to supply Ukraine with gas.

    Slovakia, Poland, Romania and Austria have all reported slight falls in shipments in recent days from Russia, which is embroiled in a row with the European Union over the crisis in Ukraine.

    Some countries in eastern Europe send gas to Ukraine, to which Russia stopped gas flows in June over a pricing dispute.

    Gazprom's Chief Executive Officer Alexei Miller told Russian President Vladimir Putin that the company is pumping gas in accordance with contracts with European consumers, but was not supplying extra volumes asked for.

    "Gazprom is carrying out stable daily supplies to European consumers. We fully adhere to our contractual obligations," Miller said in a meeting at the Kremlin attended by reporters.

    "Once gas is collected in our underground storage, then we will be able to satisfy the (extra) demand of our European consumers," he said.

    EU industry experts and European Commission officials held the latest in a series of meetings on Tuesday to assess the security of the EU's energy supplies.

    EU sources, speaking on condition of anonymity, said the issue of how much gas Gazprom was supplying to the European Union had been raised and that EU officials had said Gazprom had been adjusting volumes but within contractual limits.

    The European Commission has repeatedly said that storage levels are comfortable for now, but they are concerned about the longer term.


    CHINA TALKS

    Miller said Gazprom will produce 463 billion cubic metres (bcm) of gas this year, which is down from a previous estimate of 496.4 bcm published in May and 487.4 bcm pumped in 2013.

    He also reiterated that Gazprom had been in talks with China on supplying gas on top of the previously agreed 38 bcm per year after 2019 via a so-called Western route.

    Russia set its sights on energy-hungry Asian markets a decade ago and struck a landmark deal with China in May to supply it with gas from Russia's east Siberian fields.

    Gazprom's previous discussions on delivering additional gas to China via the Western route have met with a lukewarm response from Beijing.

    Miller told Putin that Gazprom and China have been discussing an increase in supply volumes via the route by up to 100 bcm per year, an ambitious task given a decline in the company's production levels and China's tough stance in the negotiation process.

    Gazprom's chief added that the company would be able to satisfy gas demand both in Asia and in Europe

  10. #290
    Council Member Firn's Avatar
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    The Russian Economy: Can Growth be Restored within the Economic System? by Susanne Oxenstierna, hosted on the FOI of Sweden is well worth a read. Roughly forty pages.

    A bit of it's conclusions...

    Market forces play only a limited role in the Russian economy and to improve the prospects for growth with ‘western’ economic policy or to improve the institutional framework will be difficult and have a limited effect. Only parts of the economy profit from market reforms and stronger institutions. The old rent dependent sector has strong political support. It follows that more substantial political reforms are needed to solve the structural impediments and efficiency problems of the Russian economy. Society needs to become more democratic and more transparent

    ...

    Today the Russian society is polarised on many political and economic issues, but civil society is weak and restricted and cannot fulfil its function either as watchdog or as a channel of ideas and entrepreneurship. Without political reform and a market-oriented democratic government it is difficult to see how the performance of the economy could improve.
    Last edited by Firn; 09-18-2014 at 10:19 PM.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

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    Speech at the Kriegsakademie, 1935

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    As some here expected Russia is facing a tough budget:

    Admitting that macroeconomic stability was a "fragile" thing, Prime Minister Dmitry Medvedev told his ministers the state will not borrow excessively and will keep spending tight.

    "This is the first time when work on the federal budget, the three-year budget, took place in such difficult circumstances, when an economic slowdown was exacerbated by the implementation of sanctions," Medvedev said.

    "The main problem that we face today is the high level of uncertainty when it comes to how fast trust will return, how soon businesses become interested in investing, how the consumer market grows and what steps our partners will take."
    It doesn't of course mean that the Russian balance sheet isn't still quite solid, but the Russian economy will continue to suffer and the some elements of the crisis and the sanctions will kick in with some lag.

    A little side-story:

    Economy Minister Alexei Ulyukayev said the arrest of billionaire Vladimir Yevtushenkov on money laundering charges had hurt, not helped, Russia's business climate. These marked the first critical comments by an official since the chairman of Sistema, a telecoms-to-oil conglomerate, was put under house arrest on Tuesday.

    "This is certainly reflected in the investment climate. It is clear that the suspicion that there is some economic motive behind this complicates investors' decision-making," Ulyukayev told reporters, adding that the situation could spur capital flight.
    Meanwhile, on the gas front:

    Russian gas producer Gazprom is likely to record its lowest output this year since its creation a quarter of a century ago after cutting supplies to Ukraine and losing market share to domestic rivals.

    Gazprom reduced its 2014 production forecast this week, and analysts regard even this figure as overoptimistic due to Moscow's battle with Kiev over gas prices and its role in the conflict in eastern Ukraine.

    Falling output could put further pressure on the economy, which relies heavily on oil and gas sales and is already slowing to a crawl partly as Western sanctions start to bite.

    At least war is mostly far from cheap and the Russians are already paying part of the price for Putin's invasions...
    Last edited by Firn; 09-18-2014 at 10:38 PM.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

  12. #292
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    Russian production isn't falling because of a shortage of reserves, it's falling because of a shortage of investment. In the short run the impact is the same, but a deficit of investment can be corrected, while a deficit of reserves cannot.

    Russia suffers from a syndrome common to oil producers... one might call it the Venezuela disease. The problem arrives when the government begins to depend on energy revenue, rather that a diversified tax system, to fund its operations. That typically leads to a place where the government ends up absorbing money that the energy industry needs to re-invest in operations in order to sustain its productivity. That inevitably leads to lower production, and to the government taking an ever higher percentage of falling revenue, leaving less and less money to reinvest. Venezuela looks to be entering the final stages of that death spiral; Russia has a way to go.

    It is worth noting that Russia could balance its budget with oil at $90. They could balance it with oil at $80. BUT... they would have to raise taxes, quite substantially. They have room to do that: Russian income tax is a flat 13% regardless of income, and other taxes are similarly low relative to developed countries. It would not be a popular move, though, especially dring a recession. That's the danger you get into when you rely on oil money and let the people get used to low taxes.

    It will be interesting to see what they decide to do.
    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”

    H.L. Mencken

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    Quote Originally Posted by Dayuhan View Post
    Russian production isn't falling because of a shortage of reserves, it's falling because of a shortage of investment. In the short run the impact is the same, but a deficit of investment can be corrected, while a deficit of reserves cannot.

    Russia suffers from a syndrome common to oil producers... one might call it the Venezuela disease. The problem arrives when the government begins to depend on energy revenue, rather that a diversified tax system, to fund its operations. That typically leads to a place where the government ends up absorbing money that the energy industry needs to re-invest in operations in order to sustain its productivity. That inevitably leads to lower production, and to the government taking an ever higher percentage of falling revenue, leaving less and less money to reinvest. Venezuela looks to be entering the final stages of that death spiral; Russia has a way to go.

    It is worth noting that Russia could balance its budget with oil at $90. They could balance it with oil at $80. BUT... they would have to raise taxes, quite substantially. They have room to do that: Russian income tax is a flat 13% regardless of income, and other taxes are similarly low relative to developed countries. It would not be a popular move, though, especially dring a recession. That's the danger you get into when you rely on oil money and let the people get used to low taxes.

    It will be interesting to see what they decide to do.
    Dayuhan---here is the same problem again---taken from the source you do not like but sometimes actually accurate the web.

    Here is an unusual admission from a Russian in the know concerning oil:

    Lukoil's Alekperov unusually open about hit to oil industry from sanctions - says 25% of oil from fracking - Interfax

    This goes to the loss in production by 2020---heavy fracking in the older fields in needed as they are losing both in volumes and production rates.

    25% is a heavy percentage--nowhere close to that in say older US fields.

    That is why this last round of sanctions was bad for Russia---it hit the fracking side of both gas and oil thus Russia in the long haul cannot even keep that percentage stable. It hit also the US oil/gas services companies Russia is heavily dependent on for their fracking and artic drilling--Russia simply does not have that capacity inhouse to replace them.

    They will be hurting production wise in about 9 months if these particular sanctions stay in place as it seems they will---there was also a side comment concerning OPEC--they sense that OPEC is keeping their production run rates on sour at record highs---almost contributing to the falling sour crude prices..
    Last edited by OUTLAW 09; 09-19-2014 at 04:24 PM.

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    And sanctions are not hurting the Russian oil/gas industry?---literally an flood of negative Interfax press releases today on the Russian oil industry.

    Ouch...it seems the Russian oil industry is screaming for Russian CB support.. almost a panic tone in the releases...from Interfax today

    18:48
    PRODUCING OWN OIL INDUSTRY EQUIPMENT WON'T RESOLVE BAN ON IMPORTS QUICKLY - MEDVEDEV

    18:46
    COLOSSAL MEANS NEEDED TO FULLY REVIVE PRODUCTION OF EQUIPMENT TO PRODUCE OIL IN RUSSIA - ALEKPEROV

    18:46
    TAX MANEUVER TO LEAD TO INCREASED TAX BURDEN ON OIL INDUSTRY - ALEKPEROV

    18:45
    LUKOIL NOT EXPECTING MONEY FROM ABROAD IN MEDIUM TERM, HAS TO DEPEND ENTIRELY ON ITSELF - ALEKPEROV

    18:45
    EFFORTS MUST BE MOBILIZED IMMEDIATELY TO PRODUCE HYDROFRACTURING EQUIPMENT IN RUSSIA - ALEKPEROV

    18:43
    LUKOIL'S ALEKPEROV SAYS 25% OF OIL PRODUCED BY FRACKING, BAN ON EQUIPMENT IMPORTS FOR THIS COULD HURT OIL INDUSTRY

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    In short so far it seems that the Kremlin is protecting it's budget while letting the economy suffer. We discussed the origins of that logic before.

    I think the Swedish paper is pretty good and has a nice picture about the dangers of Russian rent-seeking. If I find some time I may read Resource Rents and Economic Growth, 'A report for the Russian Presidential Academy of National Economy and Public Administration (RANEPA)'. I doubt that it was widely discussed in the Kremlin.

    The durability of networked authoritarianism is far shorter and more relevant at the moment. The author is now back from Moscow and the director of the Russian institute at the King's College, London. The graph at page three is rather neat...

    This memo takes a step back from the passions of the November 2011 parliamentary and March 2012 presidential elections and the protests that surrounded them. It argues that the consolidation of the underlying Russian political economy over the past 20 years has given rise to a system of rent-seeking and arbitration pursued successfully at various levels and supported by a robust network of interlocking interests. This ”networked authoritarianism” supports the status quo and militates powerfully against significant reform. It does so, I argue, at the cost of increasing inefficiencies and social friction, raising the possibility of catastrophic change in the future. This memo will explore the structure of the system, the pressures and constituencies for change, and the limits of reform.
    I fear that that catastrophic change might have already taken place in the propaganda fog of Putin's new war.
    Last edited by Firn; 09-19-2014 at 09:02 PM.
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

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    Council Member Firn's Avatar
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    After my link to that fine paper about the durability of networked authoritarianism around Putin the NYT has an excellent piece of reporting about how a private bank fuels the fortunes of his inner circle. Some has already be known, of course, but it adds new insights and puts all together. The graph about it's rise in assets is quite stunning...

    He had arrived in Moscow as a midlevel apparatchik in ill-fitting suits, had ascended to power as a thoroughly unexpected president and won his first presidential election in 2000 on the crest of war to suppress separatists in Chechnya. By 2004, Mr. Putin had become the paramount figure in Russia, winning a second term with 72 percent of the vote, in a race tainted by allegations of strong-arm tactics and vote rigging. Yet Mr. Putin probably would have won a fair election easily, too. The Russian economy, buoyed by high oil prices, was booming, creating huge fortunes and also lifting the middle class. The long era of post-Soviet gloom seemed done.

    Not many people yet understood that in the middle of Russia’s prosperity, the men in the tight circle close to Mr. Putin were becoming fabulously wealthy, and increasingly powerful, in what critics now consider a case study in legalized kleptocracy.
    Sadly for many Russians the shock will all be greater if the economy goes where it seems to be headed in the mid run...
    ... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"

    General Ludwig Beck (1880-1944);
    Speech at the Kriegsakademie, 1935

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    Putin's friend Arkady Rotenberg has problems in Italy due to sanctions.

    http://www.themoscowtimes.com/mobile...re/507663.html

    Navalny has studied his fortune there. In Russian, but a lot of pics.

    https://navalny.com/p/3845/

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    And.....here come the overall price increases which the Russian "common man/woman" on the street will definitely notice.

    More from that new Econ Min forecast from last week: food prices expected to jump 12-13% this year

    IMO---they will eventually come in between 15-225 more as the long term food delivery contracts run out and Russia has to look for more suppliers from overseas adding to the shipping costs and reduced quality.

    http://vedomosti.ru/~h1e

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    And.....the Rubel slide continues ever downwards.

    It seems that the super micro and marco economist Putin does not seem to see the connection between his actions in the Ukraine, the sanctions that he himself stated publicly they could survive with ease and the resulting disaster coming at his economy in the next six months as the winter hits and overall Russian economics slows down due to weather.

    Seems the attempted Russian FM Reset 2.0 was an attempt to row against the current and get back to business as usual.

    Ruble slides (again), inches toward central bank intervention levels. http://www.bloomberg.com/news/2014-0...ion-level.html

  20. #300
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    Russia is slowly ever so slowly getting to the point of confirming the slackening/drop off of oil production under the current figures starting in 2020 which means a hit for the finance side of the Russian budget.

    This Interfax press release from today will slowly start the march to 2020---if they are indicating a plateau now what is then due in 2020. 2014 and three years makes it 2017--slowly getting to the magic number of 2020.

    Interfax fro today:
    13:04 Russian hydrocarbons output to remain on plateau for at least three years - ministry

    Notice no mention that it going back up and "for at least" is not a good sign.

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