Windows to Russia

Russia’s GDP fall to be similar to that elsewhereThe anticipated decrease in Russia’s GDP is expected to reach 2.2 percent in 2009, which is comparable with other countries’ performance, Economy Minister Elvira Nabiullina said during the ministry’s extended board meeting today. GDP is projected to drop between 2.6 and 3.5 percent in the United States, 2.1-3 percent in EU countries, and by a maximum of 5.8 percent in Japan. Meanwhile, export-oriented countries, particularly transition economies, may face a deeper recession, she said, with GDP likely to plummet 9-11 percent in Ukraine, 11 percent in Latvia, and 7-7.5 percent in Hungary.

Russia, Transnistria to ink economic cooperation pact
Russia and Transnistria plan to sign a comprehensive agreement on the grounds for economic cooperation, Transnistrian leader Igor Smirnov told journalists today. The need for such an accord was on the agenda at his meeting with President of Russia Dmitry Medvedev, and it is currently in the works. According to Smirnov, the accord is of the utmost importance, as it would allow Russia and Transnistria to cooperate on a broad range of issues.

Russian shares finish up steeplyRussia’s benchmark indices closed sharply higher on Monday, with the Micex index up 7.29 percent from the previous close, at 849.82 points, on a trade volume of RUB 65.81bn (approx. USD 1.97bn), and the RTS index up 5.78 percent at 737.19 points amid a trade volume of USD 6.79m. On Micex, Sberbank surged 10.17 percent, Gazprom jumped 8.26 percent, VTB soared 9.49 percent, Tatneft rose 6.68 percent, and Polyus Gold climbed 6.95 percent. On the RTS, Lukoil gained 7.53 percent and Norilsk Nickel advanced 7.35 percent.

Gov’t to mull plans for making Moscow global financial hubThe Moscow government plans to make the city a huge international financial hub, a Moscow committee responsible for state borrowings has announced. On Tuesday, the Moscow government is set to consider a decree outlining a plan for the Russian capital’s development as a national and global financial center. The draft document highlights the considerable changes in the geography of global financial hubs that took place over the recent years. New financial centers such as Hong Kong and Singapore have joined the top ten list of the recognized leading financial hubs including Tokyo, Frankfurt, and Geneva. Furthermore, other financial centers in emerging economies, such as Shanghai and Mumbai, are seeking to achieve this same feat. This trend reflects the new realities of the rapidly changing world, where emerging countries, having considerably strengthened their positions on industrial and commodity markets, are now claiming leadership in global finance, the document reads.

Aeroflot launches bid to buy into Czech AirlinesAeroflot – Russian Airlines has submitted documents to the Czech Republic’s Finance Ministry that confirm its interest in participating in a tender for the privatization of a 91.5-percent stake in Czech Airlines (CSA), the Russian company’s press office has announced. The bid was submitted by a Czech legal entity on behalf of Aeroflot, in full compliance with the terms of the tender. The bid contained a general business plan confirming Aeroflot’s intentions to maintain CSA’s status as the Czech Republic’s national airline based in the Ruzyne Airport serving Prague. The plan also outlines the general areas of both airlines’ joint development in case of the deal’s completion.

Russia to slash spending on gov’t staff: The administration of Russia will be cut by RUB 38.7bn (approx. USD 1.14bn), or 22 percent, Russian Finance Minister Alexei Kudrin told a briefing following a cabinet meeting on Thursday where amendments to the federal budget for 2009 were under discussion. The figure includes all expenses connected with public management, Kudrin explained. He stressed that the cuts would not affect the court system, however, which would be funded in full.

Budget revenue to shrink in Russia: According to revised data, Russia’s budget revenue will drop 27.6 percent in 2009 compared to 2008, Deputy Prime Minister and Finance Minister Alexei Kudrin told a press conference following a cabinet meeting on Thursday. In 2008, Russia’s budget revenue stood at some RUB 9.258 trillion (approx. USD 273.7bn), while budget surplus amounted to roughly RUB 1.697 trillion (approx. USD 50.2bn). The amendments to the federal budget for 2009 have yet to be refined, Kudrin said, adding that they were purely technical amendments with no particular significance. He also explained that subsidies earmarked for various Russian regions might be reallocated in a number of areas, and the government would determine the possible ways to use its budget reserves.

Russian retail sales slide in February: Retail sales decreased 2.4 percent to RUB 1.05 trillion (approx. USD 30.51bn) in February 2009 compared to the same month a year earlier, the Federal State Statistics Service (Rosstat) reported. In the first two months of 2009, however, retail sales inched up 0.3 percent to just shy of RUB 2.129 trillion (approx. USD 61.85bn) against January-February 2008. Enterprises and individual entrepreneurs operating out of fixed premises accounted for 86.4 percent of total retail sales, while retail markets and fares represented 13.6 percent. Food products, including beverages and tobacco, made up 48.5 percent of total retail sales, while non-food items accounted for 51.5 percent (against 46.7 and 53.3 percent, respectively, in February 2008).

Russia’s unemployment rate creeping up menacingly: Russia’s total number of unemployed jumped 20.6 percent in February 2009 year-on-year, to over 6.4 million people (8.5 percent of the economically active population), the Federal State Statistics Service said today. This also shows a 4.9-percent increase from January 2009.

Putin slams money printing as inefficient : Russia’s Prime Minister Vladimir Putin finds printing more money an inexpedient and even dangerous way to cover the budget deficit amid the economic turmoil. Budget deficits are in store for Russia not only this year, but for a few more years afterwards, he stressed at today’s government meeting. This, in the PM’s opinion, confers even greater responsibility on the government and calls for a conservative budget strategy, as well as maintaining confidence in the national financial system. The budget deficit, therefore, must be tackled in a civilized manner, with the help of globally accepted means – that is, from reserves stashed away during the previous year or, if necessary, through loans obtained on market terms.

Russian President Dmitry Medvedev on Tuesday during a Defense Ministry meeting claimed that NATO is continuing its attempts to broaden its military infrastructure towards Russia’s borders. Russia does not like the candy coated actions that have no meaning. NATO will not learn…

Russia is telling Europe that we have our own gas project to supply you with gas:

Gazprom has received an invitation to join the Nabucco pipeline project to pump gas from Central Asia to Europe, but will not take up the offer, a deputy head of Russia’s energy giant said. “Yes we said – NO!”

That killed the Nabucco pipeline:

The Nabucco gas pipeline project to pump natural gas from Central Asia to Europe bypassing Russia has been removed from a European Union list of priority projects, a source in the EU Council of Ministers said on Tuesday. (Oy)

Russia has been sending huge amounts of aid to Afghanistan and now to Tajikistan:

Russia will send three airplanes with humanitarian aid , including food, blankets, tents, and electric generators, a spokeswoman for the Federal Agency for State Reserves said on Tuesday.Seems server weather has destroyed much of the country energy network.

Bad news from Vietnam:

A Russian emergencies ministry plane has arrived in Moscow carrying 14 Russian tourists who were injured in a Vietnamese bus crash that left nine Russians dead, a senior health official said on Tuesday. Very similar to the crash last year in Israel. (A tour bus)

That was not good, Russians are going to have to watch out for these cheap tour bus excursions.

Last but not least the changing of the attitudes that I see in Russia and the world. At one time the world had this starry eyed out look about America, a Hollywood rose colored glasses vision! That has changed and now the world has more realism in their outlook.

Just another day in Russia…

Kyle & Svet

comments always welcome.

Wage arrears rising in Russia: Wage arrears for a range of monitored economic activities reached RUB 8.087bn (approx. USD 232.12m) as of March 1, 2009, up 16.1 percent from February 1, 2009, the Federal State Statistics Service said. Wage arrears accounted for 2 percent of the total monthly payroll. In the area of education, health care and social services, overdue salaries were at just 0.2 percent. In agriculture, the debt stood at 5 percent.

Russia to continue support for Abkhazia, S. Ossetia: Russia is set to continue financial support for Abkhazia and South Ossetia in 2010-2011 in the framework of a three-year budget, Deputy Finance Minister Anton Siluanov stated today. He did not specify the exact amount of funds to be allotted in 2010-2011, however, noting simply that it would by no means be smaller than in 2009. This year, RUB 2.36bn and RUB 2.8bn (approx. USD 67.74m and USD 80.37m) will be allotted to the budgets of Abkhazia and South Ossetia, respectively. Furthermore, Siluanov noted, Russia is pondering loans to the two republics to finance profit making projects.

Russia estimates Pension Fund’s surplus in 2009: Russia’s Pension Fund surplus is estimated at RUB 241.5bn (approx. USD 6.93bn) in 2009, according to the documents prepared for the fund’s upcoming board meeting. Meanwhile, the share of budget funds allocated to the fund is expected to go up from 52 percent to 63 percent. The documents also state that the fund’s budget will be revised, and its total revenue is projected at RUB 3.282 trillion (approx. USD 94.2bn), and expenditures at RUB 3.040 trillion (approx. USD 87.3bn). The share of the fund’s revenue and expenditures is expected to amount to 81 percent and 7.5 percent of GDP, respectively.

Russia, Afghanistan join forces to fight drug trafficking: Russia and Afghanistan have signed an agreement on fighting drug trafficking and the illicit trade of psychotropic substances and their precursors. The accord was signed by Russia’s Foreign Minister Sergei Lavrov and Afghan Foreign Minister Rangin Dadfar Spanta during the Russian minister’s visit to Kabul. Both sides stressed the particular importance of the document as a major incentive for joint efforts in the area. They also underscored the significance of regional cooperation in counteracting terrorism and drug trafficking, especially between Afghanistan and Pakistan, and hailed the upcoming ad hoc conference to be held in Afghanistan under the aegis of the Shanghai Cooperation Organization.

Russia calls for changes in international budgetary policies: Russia has called upon the leaders of G20 to develop and adopt internationally agreed standards in the field of macroeconomic and budgetary policies which would be mandatory for leading global economies, including countries issuing reserve currencies. These suggestions are listed in the proposals circulated by the Russian president’s press office for the upcoming G20 summit in London, scheduled for April 2009.

Russia urges reserve currency diversification: Russia insists on settling accounts and setting prices on the international market in the currencies of countries that meet certain global requirements for their economic development and financial systems. The idea has been expressed in Russia’s suggestions for the G20 summit in London that will take place in April 2009.