Russia 01 (May 08 - Jul 10)

Re: Russia

Postby winston » Tue Jun 03, 2008 9:41 am

Russia 2008 Inflation May Accelerate to 14%, IMF Says (Update2)
By Alex Nicholson

June 2 (Bloomberg) -- Russian inflation may accelerate to 14 percent this year and the risk of the economy overheating is mounting, an International Monetary Fund official said.

Consumer prices rose an annual 14.3 percent in April, a five- year high, stoked by global food price increases and rising domestic wages. The economy grew 8 percent in the first quarter, the Economy Ministry said in a preliminary estimate on April 17. Gross domestic product rose 8.1 percent for all of 2007.

``The risk is that inflation gradually increases to such a level that it requires a sharp tightening of monetary policy that could cause a slowdown in growth,'' Poul Thomsen, head of the IMF mission in Russia, told reporters in Moscow today. The risk of the economy ``overheating'' is increasing, he said.

The economy may expand 7.8 percent this year because oil prices will remain high and the IMF doesn't expect any ``serious impact'' on Russia from global financial-market turmoil, Thomsen said. In 2007 inflation picked up to 11.9 percent, overshooting the government's target by more than three percentage points.

``If demand grows by 15 percent in real terms in an economy with potential growth of around 7 percent, you are rapidly using up what spare capacity is available out there and you will see growth of inflationary pressures,'' he said.

Increasing Risk

The government should re-focus monetary policy on controlling inflation by increasing the flexibility of the ruble's exchange rate, Thomsen said. Any delay may hurt growth, he said.

``Delaying a tightening now increases the risk that there will be the need for a more stronger monetary tightening in the future that could cause a period of below-potential GDP growth,'' Thomsen said.

Russia's central bank buys and sells rubles daily to manage the currency against the basket, which is made up of 0.55 dollars and 0.45 euros. On May 14, the bank said it will intervene at other unpublicized levels to reduce speculative interest in the currency and curb inflation. The bank may let the ruble rise this year, Chairman Sergey Ignatiev said on May 29.

Manufacturing expanded in May at the slowest pace since September amid accelerating inflation, a gauge of industrial production showed today.

The ruble fell against the dollar and the euro, leaving it at the weakest for four days versus its basket of currencies.

The currency slipped to 23.7508 per dollar by 10:54 a.m. in Moscow, from 23.6840 late on May 30. The ruble extended its 0.6 percent drop last week, the first since the beginning of May. The ruble decreased to 36.8627 per euro, from 36.8427 last week.
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Re: Russia

Postby LenaHuat » Thu Jun 05, 2008 10:21 am

MM and SM are both in Moscow now. Wonder if there will be an announcement abt a Singapore industrial park in Russia. It's time to introduce the Russian language in some schools here. She will speed up in economic prowess for the next 30 years.
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Re: Russia

Postby blid2def » Thu Jun 05, 2008 11:54 am

Maybe they're looking to import Russian ladies to represent Singapore in future beauty pageants. Foreign talent scheme and all that. :D

I think she approves of this idea.

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Re: Russia

Postby LenaHuat » Thu Jun 05, 2008 4:39 pm

Bring 1 Maria Sharapova and maybe we can attract 10 billionaire suitors who will invest here.
Why not?? :lol:

Singapore should not miss this opportunity. Our govt kept humming abt the Chinese and Indian economies and missed Dubai and Qatar. Now they know they've got to work really hard on the Gulf States, Saudi Arabia and Russia. Lee Hsien Loong spoke and wrote Russian as a boy. I think the Education Ministry should introduce the language and at least an appreciation of Russian literature in our schools.
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Re: Russia

Postby kennynah » Thu Jun 05, 2008 7:27 pm

dear L :
great idea about importing a couple of russian women here... i thought if we could ever "buy" some of these tennis champs...it would certainly be better than those half-baked ping pong and bedminton players we have been feeding for some time now... but again, to get these top notch players... we have very little to offer in return...so, we end up having half-cans-of-dung here..

in any case, i am not particularly proud that we need to "purchase" medals... cannot get medals thru our own sports system, so be it... not everything has to be a No. 1 in life...

just some pre-dinner gibberish... :mrgreen:
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Re: Russia

Postby winston » Mon Jun 09, 2008 10:05 am

Goldman's O'Neill Says Russia Economic Growth to Slow
By William Mauldin and Alex Nicholson

June 8 (Bloomberg) -- Goldman Sachs Group Inc. Chief Economist Jim O'Neill said Russia's economic expansion will slow in the decade from 2010 as gains in the oil price decelerate, a prediction that clashes with the government's forecasts.

``Oil prices will definitely not do what they've done the past 10 years, and that's not going to be great news for Russia,'' O'Neill said in an interview today at the St. Petersburg International Economic Forum.

O'Neill, who coined the BRIC acronym in 2001, said Russia ``doesn't have the same advantages over the next decade'' as China and India, which will benefit from larger workforces and greater productivity. Russia's economy will probably surpass Brazil's while falling behind India's by 2020, he said, adding that China will account for 15 percent of the global economy by that time, second only to the U.S.

Russia's gross domestic product will likely grow 3.3 percent a year from 2010 to 2015 and 2.9 percent a year during the following five years, making the economy the world's eighth biggest by 2020, up from 10th now, O'Neill said. The country's GDP will total $3 trillion in 2020, doubling its share to 4 percent of the world total.

Biggest Economies

First Deputy Prime Minister Igor Shuvalov said in St. Petersburg today that Russia's economy will become the world's sixth biggest by the end of this year. ``Russia has become a fully fledged member of the club of the biggest economies of the world,'' he said. The economy expanded 8.1 percent last year.

Russia is already the world's seventh-biggest economy by purchasing power parity, Prime Minister Vladimir Putin said on May 8. Purchasing power parity accounts for differences in the exchange rates of national currencies. Unadjusted, Russia's economy is the world's 10th biggest.

``If you want to be big, you have to have a lot of people working,'' O'Neill said.

Russia's population declined to 142 million last year from 148 million in 1991, when the Soviet Union collapsed, according to the Federal Service of State Statistics. President Dmitry Medvedev has made reversing the country's demographic decline a priority.

`Higher Trend'

While crude prices in New York jumped by the biggest dollar amount ever to a record on June 6, it would be ``dangerous'' to believe that the oil price will rise as quickly in the next decade as it has in this one. O'Neill said, adding that Russia's growth won't slow as much if the government bolsters property rights and the rule of law.

``These views expressed by Jim O'Neill will not be shared by the majority of people here,'' Mikhail Zadornov, chairman of VTB 24, the retail-banking arm of VTB Group, Russia's second- biggest bank, said during a panel discussion at the forum. ``We are in a position to achieve a higher trend.''

``People have gone from thinking I'm nuts to thinking I'm pessimistic,'' O'Neill said, referring to the probable slowing of Russia's economic growth.

Erik Berglof, chief economist at the European Bank for Reconstruction and Development, said in St. Petersburg that it ``won't be easy'' for Russia to reduce its dependence on energy exports ``given what it exports today.'' Russia is the world's largest energy exporter.

`Excessive Interference'

Shuvalov warned that a heavy state hand in the economy could harm the government's goal of modernization and growth.

The state must avoid ``excessive interference'' in the economy, he said. ``For an innovative economy the excessive presence of the state is just as dangerous as its absence.''

Medvedev has instructed the government to cut the number of state-controlled strategic enterprises and the government has plans to rotate officials on the boards of state companies, Shuvalov said.

Russia, the world's biggest energy exporter, created state- run institutions including the Development Bank in 2007 to help develop industries other than commodities extraction. Government spending, including on state-operated corporations, increased by 40 percent last year as Russia seeks to diversify the economy and become a global leader in nanotechnology and other high-tech industries by 2020.

``The state must concentrate on resolving only the tasks where we can be effective,'' Shuvalov said.
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Re: Russia

Postby LenaHuat » Sat Jul 19, 2008 4:08 pm

Rubles are spilling out of some Russians' ears.
Wife of Moscow's mayor buys London's mansion, second in size only to Buckingham Palace.
She paid US$100 million :roll: for it.
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Re: Russia

Postby winston » Sun Jul 20, 2008 9:36 pm

Ifo: Russian economy – state guided and dependent on oil exports

“In recent years, the Russian economy has grown at an average pace of 7% annually. Whether this pace can be maintained if the economy continues to be regulated by the state and dependent on exports of raw materials is questionable in the opinion of Philip Hanson, Royal Institute of International Affairs in London. In the current issue of CESifo Forum he points out the possible risks.

“The strong dependency on oil, especially at the currently high prices, can hamper the diversification of the economy and slow down economic growth in the long term.

“A further retarding factor to economic development Hanson sees in R&D policies, which are concentrated on state-run large enterprises. Technology co-operations and technology transfers of foreign firms with Russian enterprises are limited. This stands in contradiction to the intention of the Russian government to transform Russia into a modern and broadly diversified economy.

“In terms of patent applications, which are very modest in an international comparison, Russia is also not reaching this goal.”

Source: Ifo, July 2008.
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Re: Russia

Postby millionairemind » Wed Jul 23, 2008 9:03 am

Hmmm... who is really controlling Russia???

BP recalls its last staff from Russia
By Russell Hotten, and Adrian Blomfield in Moscow

BP's battle to stay in oil-rich Russia has been dealt a major blow after the UK company was forced to withdraw its last engineers and technical staff from the country.

After months of pressure the company bowed to the inevitable yesterday and withdrew the remaining 60 staff it had assigned to work at TNK-BP, the joint venture at the centre of a power struggle between BP and three Russian oligarchs.

The withdrawal marks a further slip in BP's grip on Russia's third largest oil producer, which accounts for 25pc of the UK company's annual production and last year made profits of $5bn on sales of $38bn.

Next week, Robert Dudley, chief executive of TNK-BP and a former employee of BP, may be forced to leave Russia in a row over his work permit, putting BP's partners in de facto control of the joint venture.

More on oil
In all, 148 BP secondees to TNK-BP have been forced to leave following a dispute over the renewal of visas that started in March.

The Moscow immigration office eventually approved the visas, but the employees were barred from TNK-BP's Moscow offices by security guards.

Then, in May, a previously unknown investment company, Tetlis, got an injunction in Tuymen, Siberia, blocking the visas, claiming that the BP staff enjoyed inflated salaries.

The Daily Telegraph tried to contact Tetlis, but a Moscow address listed on court documents housed a chemist shop and a grocers. A second address, registered with the authorities in Moscow, was a children's nursery.

Yesterday, BP said that the Tuymen court case had made little progress and there was no point having valuable employees idle in Russia when they could be redeployed on other business in the Middle East and Gulf of Mexico.

"We are taking this action reluctantly," Lamar Mckay, BP's executive vice-president, said. "These technical experts have played a huge part in making TNK-BP one of Russia's most successful oil companies in the past few years."

Analysts said losing the BP specialists would probably start to impact on TNK-BP's operations by the end of the year. "These people work on projects with long lead times. The impact will start to be felt in a few months."

However, Stan Polovets, chief executive of Alfa-Access-Renova (AAR), the consortium representing the Russian investors, welcomed BP's decision.

He said: "We respect BP's decision and are confident it will not have an adverse impact on TNK-BP's operations. The BP secondees have not been working for TNK-BP for many months now, and the company's operations have not been hampered in any way. In fact, production has been up for the past three quarters, as our colleagues from BP have noted."

In addition to the secondees, about 85 former BP employees, including Mr Dudley, are now directly employed by TNK-BP. All are facing problems with work permits and visas.

AAR claims that BP runs TNK-BP for its own benefit, rather than for all the shareholders, and has been campaigning for the removal of Mr Dudley. BP denies the claim.

AAR argues that he no longer has an employment contract, and therefore must leave Russia when his visa expires next week. BP says the contract is renewed automatically.
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Re: Russia

Postby HengHeng » Wed Jul 23, 2008 9:13 am

dirty bastards .. call people to go in to invest their technology and now once it is done now force people out.

Well this way no one will wanna do bussiness with them expecially if oil prices were to go down , russia sure kana creamed again.
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