Economy & Politics

SPIEF 2018 Omits Mentioning the US by Name but Points Fingers at “Global Betrayer of Trust”

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spiefThe St.Petersburg International Economic Forum (SPIEF) opened in Russia today with the theme “Building An Economy Of Trust”. The forum is a renowned annual think-tank looking at concerns within the global economy and is attended by high ranking international politicians and academics from around the world. This year, key speakers are the French President Emmanuel Macron and Japanese Prime Minister Shinzo Abe. They aim to add geopolitical meaning to the discussion and will be an attempt to depoliticize investment, business and trade, and economic cooperation. Previous attendees have included Xi Jinping, Angela Merkel, Narendra Modi, Ban-Ki Moon, Jean-Claude Junker, among many other dignitaries.

This year’s SPIEF has an additional angle to it as it also introduces a new group of Russian politicians in the wake of President Putins’ recent re-election as President. Continue reading…

Russian Bridge to Crimea Opens and is Immediate Success

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President Putin takes part in Crimean Bridge openingThere was not a small amount of photo ops and swagger with Russia lording it over the Ukraine in the opening of the Kerch Strait Bridge linking Russia with Crimea for the first time. President Putin kicked off proceedings in driving and heading up a convoy of bright orange trucks across the Straits, before declaring he had managed to do what the Tsars had not in completing the project. That’s some bluster.

However, among all the pomp and ceremony and braggadio, is the Kerch bridge anything more than a symbol of Russian might and a finger at Kiev, or is it actually of any use?

The latter seems to be the answer as within the first 12 hours of its opening, almost 14,000 vehicles crossed the Crimean Bridge on Wednesday during the first 12 hours of its operation, surpassing the earlier record of the Kerch Strait ferry line, the Crimean Bridge information center stated.

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Transhipping China Trains and Ships to Europe – Understanding Russia’s Economic and Trade Performance in 2018 and Beyond

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freight-container-train-from-china-to-europe-516x315-72Since the sanctions were imposed on Russia back in 2014, the Western media position on reporting about the country has taken an almost complete step towards demonization. It is routine now for negative news and opinion to be the common viewpoint, in every regard. Sometimes, this reaches ridiculous heights. I recall reading a Washington Post article about how sanctions imposed by the United States on Russia had left Russian supermarket shelves bare, and how ordinary Russians were about to revolt against President Putin. It even featured a photo of appropriately empty supermarket shelves to illustrate the piece. The only problem with that report is that the day it was published, I had just completed a weekly shop at one of Moscow’s supermarkets, which was packed to the roof with product. There was some complaining about the price of potatoes and beetroot, but that was as far as it went in terms of rebellion. (Incidentally, Russian supermarkets remain full, and I stopped reading the Washington Post).

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Russia Targets Mercedes Benz and Rolls Royce with New Luxury Cortege Aurus Brand

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cortege-1Russia has taken the first steps in launching its prestigious Cortege project of high end automobiles with Russian President Vladimir Putin debuting the Cortege Aurus at his inaugration in Moscow last week. President Putin stated, “A country like Russia must produce a line of cars that the country’s top officials will use. We are working on this. I hope that by the end of 2018 this will materialize, and this will be a line of cars not only for top officials, like limos, but also SUVs, minibuses, hatchbacks, and others”.

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Eurasian Economic Union Ratifies Observer Status to Moldova, Could Become Low Cost European IT Hub

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The Supreme Eurasian Economic Council, the main leadership body of the Eurasian Economic Union (EAEU), has agreed to grant observer status to Moldova. Russian President Vladimir Putin made the statement yesterday. The proposal and acceptance was originally made in August, last year.

“I would like to point to our decision to establish observer status at the EAEU,” he said, summarizing the results of the Council’s private meeting. “We have agreed to grant such status to the Republic of Moldova,” Putin added.

In this connection, the Russian leader extended a welcome to Moldovan President Igor Dodon who joined the meeting. “We expect that as an observer state, the Republic of Moldova will actively participate in our union’s activities,” Putin said. “We are ready to consider applications of other countries, first and foremost, our CIS neighbors,” he added.

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Russian 2018 Public Debt to GDP Ratio among World’s Lowest

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russia-debtRussia has been reducing its public debt as measured against GDP, with this now standing at just 33 percent and a 7 percent decrease from last year. Net debt figure is the cumulative total of all government borrowings, less repayments that are denominated in a country’s home currency. Gross government debt is the most relevant data for discussions of government default and debt ceilings. It is different from external debt, which includes the foreign currency liabilities of non-government entities.

“As of January 1, 2018 the debt burden on the Russian economy remained moderate: the debt-to-GDP ratio amounted to 33 percent”, while a large share of Russian external debt obligations (86.5 percent of the total external debt) accounted for the private sector and totaled US$448.6 billion.

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Russian GDP Growth Accelerating Faster than EU and US

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Russia’s GDP growth is expected to reach 1.7 percent in 2018 versus 1.5 percent in 2017, the European Commission (EC) reported on Thursday in their annual spring economic outlook.

“Going forward, the impact of higher oil prices recirculating throughout the economy is likely to further support domestic demand and thereby GDP which is expected to grow by 1.7 percent in 2018,” the document says.

The growth rate may decline to 1.6 percent of GDP by 2019, reflecting lingering effects of Western sanctions, according to the European Commission. “Improved confidence, contained inflation and accommodative monetary policy are set to support domestic demand in the near term, although structural bottlenecks hamper stronger rebound,” the EC reported.

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Russian E-Commerce Boost as Tax Threshold on Imported Parcels Reduced

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Russia’s e-commerce industry and those who sell to Russia online received a timely boost with the Ministry of Economic Development permitting a reduction in the import tax threshold for imported parcels to duty-free for all packages valued at 500 euros or less.

Deputy Minister of Economic Development Oleg Fomichev said to media this week: “We will reduce the cost of parcels exempt from the duty step by step. It is 1,000 euro now and will be 500 euro later. We must reach the level of developed economies, so that customs duties are levied on a greater portion of products. Russian online stores are actually paying all these duties. The Russian government wants to create conditions for development of the domestic online commerce. It appears now that domestic participants are in less beneficial conditions versus foreign ones because of taxes and requirements to certification of products”.

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Legitimate Russian Businesses in China Unable to Establish Banking Facilities

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complementary-or-competitive-bannerLegitimate Russian businesses and investors in China are reporting difficulties in being able to open or operate their bank accounts in the country, apparently due to the effect US sanctions are having on the international business environment. Dezan Shira & Associates report that their Russian clients in Beijing and elsewhere in China are unable to access banking facilities, or establish accounts as Chinese banks are unwilling to operate them under threat of retaliatory punishments from the US. For the small number of Chinese banks that are prepared to offer services, the corresponding (clearing) bank is declining transactions.

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Chinese Premier Says Russia-China Trade to Hit US$100 Billion

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russian-china-tradeChinese State Council Premier Li Keqiang has stated that trade between Russia and China will reach US$100 billion. “There are huge prospects for Russian-Chinese trade and economic cooperation and there is no doubt that trade can reach $100 billion,” Li said at a press conference.

China was Russia’s largest trade partner. In 2017, trade between Russia and China grew by 20.8 percent year-on-year to reach US$84 billion. Chinese exports to Russia increased by 14.8 percent to US$42.9 billion, while imports from Russia increased 27.7 percent to US$41.2 billion, according to China’s General Administration of Customs. That means Russia is one of the few countries to have a relatively balanced trade accord with China.

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