Russian Officials Scramble For Solutions As Low Oil Price And Economic Problems Bite
By Howard Amos @howardamos On 02/02/16 AT 1:10 PM
MOSCOW — Sergei Glazyev has made his name with a series of forthright and frequently outlandish proclamations on everything from intervention in Ukraine and Syria to Russia’s dwindling oil profits. Tuesday proved no different as the hawkish economic adviser to President Vladimir Putin told reporters in the Russian capital that currency speculators had made billions of dollars forcing down the value of the ruble.
“The monetary authorities have lost control over the macroeconomic situation,” Glazyev said as he urged the government to take over Russia’s main stock exchange, impose currency controls to halt ruble volatility and raise taxes to boost revenues.
Glazyev is a controversial figure within Russia’s economic establishment, and his proposals are unlikely to be taken seriously — but his intervention is an attempt to influence discussions in Russia over how to revive the struggling economy.
With Russia’s economic crisis deepening and little hope that the price of oil, Russia’s chief export earner, will rise significantly in the near term, Moscow officials are increasingly desperate in their search for new revenue streams and feverishly casting around for ideas to kick-start the economy.
Debates over economic problems have become more urgent as the price of benchmark Brent crude oil collapsed to below $30 a barrel last month and the ruble hit new historic lows against the U.S. dollar. Preliminary figures indicate Russia’s gross domestic product shrank 3.7 percent last year and it is forecast to continue its contraction through 2016.
Russia’s central bank last week kept interest rates on hold at 11 percent in an effort to rein in the inflation that has spiraled with the currency’s plunge. The level of interest rates has been heavily criticized by company executives unable to afford credit.
The government in Moscow is currently embroiled in a discussion over the details of an anti-crisis plan unveiled last week, and President Vladimir Putin gathered the heads of some of Russia’s biggest state-owned companies Monday to discuss privatization plans for the year ahead — a potential source of extra revenue.
“In 2014-2015 the market fell and fell and we waited for the situation to change. We now realize that we can’t wait any longer. The situation with the budget is critical,” Russian Economic Development Minister Alexei Ulyukayev said Tuesday, the Tass news agency reported.
Russian ministers assembled Tuesday to discuss the $35 billion anti-crisis plan first revealed on Jan. 28, but the proposals have already run into trouble, with the Finance Ministry refusing to find a quarter of the cash required, according to a report by the RBC news website. Putin traditionally entrusts domestic economic management to a group of fiscally conservative and more politically liberal ministers, but their freedom of action is limited by the Russian leader’s own pledges not to reduce the defense budget or social spending. And policy hawks like Glazyev are challenging their dominance as the economic situation continues to deteriorate.
The slated raft of anti-crisis spending, which is significantly more modest than the sums Russia committed in the financial crisis of 2009, has met with a lukewarm response, with critics arguing that Russia’s economy requires a major overhaul.
“If it’s a structural crisis then it is important not just to hand out money here, there and everywhere but to create a mechanism so that the economy starts to generate income,” said Dmitry Belousov, an analyst at Moscow think tank the Center of Macroeconomic Analysis and Short-term Forecasting.
Russia’s budget for 2016, which was approved at the end of December, was based on an average oil price of $50 per barrel and a deficit of 3 percent; but officials warn that the January fall in oil prices means this will need to be significantly revised.
There is little detail on where spending cuts will fall, but the Kremlin will be careful to avoid provoking anger among ordinary Russians already hit hard by a sharp fall in real incomes. Both poverty and unemployment have risen steadily in recent months.
One possible extra source of revenue is a sell-off of stakes in state-owned companies. “This process [of privatization] plays an important role in changing the structures of the Russian economy and stimulating an inflow of private investment,” Putin told a government meeting Monday, although he said assets should be sold only to domestic investors and urged transparency.
Privatization has often been discussed over the past decade, but there have been few successful major sales and the word stirs painful memories of the 1990s among ordinary Russians when they witnessed state enterprises being handed to well-connected tycoons at a fraction of their real value.
“Low oil prices actually increase the likelihood of privatization in Russia despite worsening market conditions,” analysts at Bank of America Merrill Lynch said in an investment note to clients Tuesday. “Putin’s remarks seem to suggest that the government is well on track to launch at least some deals.”
http://www.ibtimes.com/russian-officials-scramble-solutions-low-oil-price-economic-problems-bite-2290381
By Howard Amos @howardamos On 02/02/16 AT 1:10 PM
MOSCOW — Sergei Glazyev has made his name with a series of forthright and frequently outlandish proclamations on everything from intervention in Ukraine and Syria to Russia’s dwindling oil profits. Tuesday proved no different as the hawkish economic adviser to President Vladimir Putin told reporters in the Russian capital that currency speculators had made billions of dollars forcing down the value of the ruble.
“The monetary authorities have lost control over the macroeconomic situation,” Glazyev said as he urged the government to take over Russia’s main stock exchange, impose currency controls to halt ruble volatility and raise taxes to boost revenues.
Glazyev is a controversial figure within Russia’s economic establishment, and his proposals are unlikely to be taken seriously — but his intervention is an attempt to influence discussions in Russia over how to revive the struggling economy.
With Russia’s economic crisis deepening and little hope that the price of oil, Russia’s chief export earner, will rise significantly in the near term, Moscow officials are increasingly desperate in their search for new revenue streams and feverishly casting around for ideas to kick-start the economy.
Debates over economic problems have become more urgent as the price of benchmark Brent crude oil collapsed to below $30 a barrel last month and the ruble hit new historic lows against the U.S. dollar. Preliminary figures indicate Russia’s gross domestic product shrank 3.7 percent last year and it is forecast to continue its contraction through 2016.
Russia’s central bank last week kept interest rates on hold at 11 percent in an effort to rein in the inflation that has spiraled with the currency’s plunge. The level of interest rates has been heavily criticized by company executives unable to afford credit.
The government in Moscow is currently embroiled in a discussion over the details of an anti-crisis plan unveiled last week, and President Vladimir Putin gathered the heads of some of Russia’s biggest state-owned companies Monday to discuss privatization plans for the year ahead — a potential source of extra revenue.
“In 2014-2015 the market fell and fell and we waited for the situation to change. We now realize that we can’t wait any longer. The situation with the budget is critical,” Russian Economic Development Minister Alexei Ulyukayev said Tuesday, the Tass news agency reported.
Russian ministers assembled Tuesday to discuss the $35 billion anti-crisis plan first revealed on Jan. 28, but the proposals have already run into trouble, with the Finance Ministry refusing to find a quarter of the cash required, according to a report by the RBC news website. Putin traditionally entrusts domestic economic management to a group of fiscally conservative and more politically liberal ministers, but their freedom of action is limited by the Russian leader’s own pledges not to reduce the defense budget or social spending. And policy hawks like Glazyev are challenging their dominance as the economic situation continues to deteriorate.
The slated raft of anti-crisis spending, which is significantly more modest than the sums Russia committed in the financial crisis of 2009, has met with a lukewarm response, with critics arguing that Russia’s economy requires a major overhaul.
“If it’s a structural crisis then it is important not just to hand out money here, there and everywhere but to create a mechanism so that the economy starts to generate income,” said Dmitry Belousov, an analyst at Moscow think tank the Center of Macroeconomic Analysis and Short-term Forecasting.
Russia’s budget for 2016, which was approved at the end of December, was based on an average oil price of $50 per barrel and a deficit of 3 percent; but officials warn that the January fall in oil prices means this will need to be significantly revised.
There is little detail on where spending cuts will fall, but the Kremlin will be careful to avoid provoking anger among ordinary Russians already hit hard by a sharp fall in real incomes. Both poverty and unemployment have risen steadily in recent months.
One possible extra source of revenue is a sell-off of stakes in state-owned companies. “This process [of privatization] plays an important role in changing the structures of the Russian economy and stimulating an inflow of private investment,” Putin told a government meeting Monday, although he said assets should be sold only to domestic investors and urged transparency.
Privatization has often been discussed over the past decade, but there have been few successful major sales and the word stirs painful memories of the 1990s among ordinary Russians when they witnessed state enterprises being handed to well-connected tycoons at a fraction of their real value.
“Low oil prices actually increase the likelihood of privatization in Russia despite worsening market conditions,” analysts at Bank of America Merrill Lynch said in an investment note to clients Tuesday. “Putin’s remarks seem to suggest that the government is well on track to launch at least some deals.”
http://www.ibtimes.com/russian-officials-scramble-solutions-low-oil-price-economic-problems-bite-2290381
Today at 5:20 pm by Bama Diva
» BREAKING: Mayor Pete orders citizens to stop using drones to find stranded victims as feds fumble hu
Today at 5:07 pm by Bama Diva
» MM&C 10/3/24 Central Bank comments on preparing the budget for next year
Today at 3:05 pm by Rocky
» MM&C 10/3/24 World Bank: Iraq has made progress in improving the business environment, making it glo
Today at 12:26 pm by Rocky
» Elon Musk obliges Trump, reconnects disaster areas to the internet for free via Starlink
Today at 12:15 pm by Bama Diva
» utube 10/1/24 MM&C Iraq Dinar News - Iraqi Stock Exchange - Private Sector - Water - Infrastructure
Today at 7:17 am by Rocky
» utube 10/3/24 MM&C Iraq Update-Iraq Securities Exchange- Transform Iraq-Export Oil - Federal Co
Today at 7:16 am by Rocky
» MM&C 10/3/24 Amending the Oil Law: A Step Towards Reform or Just Another Promise?
Today at 7:11 am by Rocky
» In less than half an hour, Washington sends three messages via Baghdad to Tehran
Today at 7:04 am by Rocky
» "Soon" .. Iraqi-Kuwaiti negotiations to resume to end differences
Today at 6:58 am by Rocky
» On the seventh anniversary of Talabani’s passing, Al-Sudani recalls his national legacy and his role
Today at 6:55 am by Rocky
» Planning: The general census will show the rates of enrolment in education and unemployment.
Today at 6:50 am by Rocky
» Economist: Zionist bombing exacerbates economic conditions, calls for urgent intervention by governm
Today at 6:47 am by Rocky
» Iraq, Kuwait to resume negotiations "very soon" to resolve outstanding issues
Today at 6:46 am by Rocky
» Iraq and China take the largest share of Iranian goods
Today at 6:43 am by Rocky
» Advisor Mazhar Saleh: No concern about Iraq's financial situation
Today at 6:41 am by Rocky
» Amidst the Storms: Baghdad and Washington Support Regional Calm
Today at 6:39 am by Rocky
» MP reveals reasons for delaying the approval of the Personal Status Law
Today at 6:37 am by Rocky
» Al-Surji: The Union is capable of forming the next regional government
Today at 6:36 am by Rocky
» Government measures to control the region's import of gold
Today at 6:34 am by Rocky
» Central Bank comments on preparing the budget for next year
Today at 6:33 am by Rocky
» Anbar citizens threaten to demonstrate over private generator pricing
Today at 6:32 am by Rocky
» Dollar trading halted in Anbar due to high exchange rate
Today at 6:31 am by Rocky
» Iraqi Parliament Prepares to Pass “Most Important” Law to Recover State Funds from Corrupt People
Today at 5:14 am by Rocky
» World Bank identifies key issue for sustainable development in Iraq
Today at 5:12 am by Rocky
» World Bank: Iraq has taken steps to develop human capital
Today at 5:11 am by Rocky
» Electricity: Loss of 7,100 megawatts due to a decrease in the release of national gas and the supply
Today at 5:09 am by Rocky
» Work: Issuing more than 220 thousand national cards for those covered by social protection
Today at 5:08 am by Rocky
» France: Recommendation to eliminate 100,000 jobs to reduce government spending
Today at 5:07 am by Rocky
» Iraq, Turkey sign MoU on migration and voluntary return
Today at 5:05 am by Rocky
» Al Mazrouei: The world needs additional investments in the energy sector
Today at 5:03 am by Rocky
» Agriculture announces compensation for livestock farmers’ losses, plans to control diseases
Today at 5:02 am by Rocky
» Moscow advises its citizens not to travel to a country neighboring Iraq
Today at 5:01 am by Rocky
» Holidays cost Iraq 34 trillion dinars annually!
Today at 5:00 am by Rocky
» OPEC awaits global production estimates to confirm Iraq's compliance
Today at 4:59 am by Rocky
» This is why oil traders are betting on it rising to $100
Today at 4:57 am by Rocky
» Why are the social protection amounts not released for the current month?
Today at 4:56 am by Rocky
» Baghdad and Washington discuss the need to protect sea lanes to ensure the export of Iraqi oil
Today at 4:55 am by Rocky
» Iraq and the United Arab Emirates review procedures for judicial assistance files to recover persons
Today at 4:53 am by Rocky
» Parliamentary-governmental meeting to discuss double taxation avoidance agreements
Today at 4:51 am by Rocky
» Iraq and the United States stress the need for a ceasefire in the region and resolving crises throug
Today at 4:50 am by Rocky
» Al-Mandlawi: The late President Talabani was keen, after the change, to play an honorable role in al
Today at 4:48 am by Rocky
» The Iraqi-Turkish Joint Planning Group discusses the framework agreement concluded following Erdogan
Today at 4:47 am by Rocky
» Baghdad and Washington discuss enhancing joint cooperation in the fields of energy, oil and economy
Today at 4:46 am by Rocky
» Malekshahi: Successive regional governments faced local and regional difficulties and pressures
Today at 4:43 am by Rocky
» Kurdistan: Starting to pay August salaries to employees tomorrow, Friday
Today at 4:42 am by Rocky
» Iraq and America agree on the need for calm and not to expand the circle of conflict in the Middle E
Today at 4:40 am by Rocky
» Dollar storm hits local markets.. Only half a point left for 155 thousand - Urgent
Today at 4:39 am by Rocky
» "Serious and significant" economic risks await Iraq if it becomes involved in the Iran-Israel confli
Today at 4:37 am by Rocky
» Total 140 days.. Financial costs of holidays in Iraq
Today at 4:36 am by Rocky
» Within (8) months: The Al-Abbas’s Holy Shrine spends about (7) billion dinars on reducing the costs
Today at 4:34 am by Rocky
» After "Noon News Agency" published its most important needs: Karbala Council forms a group of commit
Today at 4:33 am by Rocky
» Government moves to build 6 new refineries
Today at 4:31 am by Rocky
» Civil Service Council: Creating 6,000 job positions
Today at 4:30 am by Rocky
» A project worth 16 billion dinars was seized by the Integrity Commission in Kirkuk
Today at 4:28 am by Rocky
» Al-Sudani orders suspension of work tomorrow, Thursday, and confirms that the region is entering a d
Today at 4:27 am by Rocky
» In two separate calls with Sisi and the Jordanian monarch...the Prime Minister stresses the importan
Today at 4:26 am by Rocky
» Transport: Completion of preliminary designs for the railway line and topographic survey of the deve
Today at 4:24 am by Rocky
» Salaries are secured.. Finance Committee: Discussing 2025 budget schedules to begin next month
Today at 4:23 am by Rocky
» Ports announces completion of work on the five berths project at the Grand Faw Port
Today at 4:22 am by Rocky
» Contrary to the instructions, the Integrity Commission monitors violations in the implementation of
Today at 4:21 am by Rocky
» The dollar exceeds 153 against the Iraqi dinar
Today at 4:19 am by Rocky
» Parliamentary Committee Reveals "Exciting" Details Concerning Border Crossings
Today at 4:15 am by Rocky
» The cost of "unofficial" holidays in Iraq is equivalent to the Syrian budget!
Today at 4:13 am by Rocky
» "Eagerly waiting" OPEC awaits global production estimates to confirm Iraq's commitment
Today at 4:12 am by Rocky
» Dollar prices against the dinar in the Iraqi markets today
Today at 4:10 am by Rocky
» National Day.. 92 years since Iraq acquired the “components of a state” as the first recognized Arab
Today at 4:09 am by Rocky
» "He uses American companies and does not pay them" .. American court ruling shows the importance of
Today at 4:07 am by Rocky
» Unprecedented’: Retired Border Patrol Chief Blows Whistle on How Biden-Harris Admin Hid Border Crisi
Yesterday at 11:09 am by Bama Diva
» Two new rounds of oil and gas investment
Yesterday at 5:12 am by Rocky
» Securities Commission: A strategy to transform Iraq into a regional investment center
Yesterday at 5:09 am by Rocky
» Political alliance talks about deciding the parliament presidency
Yesterday at 5:06 am by Rocky
» US forces hinder Iraqi forces' pursuit of ISIS
Yesterday at 5:04 am by Rocky
» Foreign Relations renews its call to preserve Iraq's sovereignty
Yesterday at 5:03 am by Rocky
» Abdul Wahid: Two ruling families seized the salaries of the region’s employees
Yesterday at 5:02 am by Rocky
» End of the state of alert among security formations in Iraq
Yesterday at 4:59 am by Rocky
» Inauguration of the first copper and cable factory in the Kurdistan Region and Iraq
Yesterday at 4:58 am by Rocky
» Kurdistan Regional Government reveals upcoming tripartite meeting to resume oil exports
Yesterday at 4:57 am by Rocky
» "Al-Eqtisad News" publishes the full decisions of the Cabinet session
Yesterday at 4:55 am by Rocky
» Finance Committee: Discussing 2025 budget schedules to begin next month
Yesterday at 4:53 am by Rocky
» 6,000 job positions to appoint top students and certificate holders.. These are the details
Yesterday at 4:51 am by Rocky
» Iraq.. Manufacturing oil well complexes by local hands
Yesterday at 4:50 am by Rocky
» Iraq is ranked 6th in the Arab world and 37th globally in labor force statistics 2024
Yesterday at 4:49 am by Rocky
» State Administration Coalition confirms unity of Iraqi position
Yesterday at 4:47 am by Rocky
» 6 thousand job positions to appoint top students and certificate holders
Yesterday at 4:45 am by Rocky
» 4 new industrial cities
Yesterday at 4:44 am by Rocky
» Implementation of 6 major projects in the capital
Yesterday at 4:42 am by Rocky
» Maysan trains 920 young people to find job opportunities
Yesterday at 4:41 am by Rocky
» Inventing an advanced device in the field of digital communications
Yesterday at 4:40 am by Rocky
» Planning receives 125,000 tablets for the general population census
Yesterday at 4:39 am by Rocky
» Committee to count the number of private public transport vehicles in the country
Yesterday at 4:37 am by Rocky
» Government moves to build 6 new refineries
Yesterday at 4:36 am by Rocky
» Cabinet approves national initiative to support energy and reduce emissions
Yesterday at 4:35 am by Rocky
» Al-Sudani receives the Spanish Ambassador to Iraq and stresses the need for the European Union to ta
Yesterday at 4:33 am by Rocky
» The Ministry of Oil discusses plans and programs to advance refinery sector projects
Yesterday at 4:32 am by Rocky
» The Council of Ministers decides to increase the capital of the Trade Bank of Iraq by 500 billion di
Yesterday at 4:30 am by Rocky
» The President of the Republic confirms to the National Security Advisor that the stability of Iraq i
Yesterday at 4:29 am by Rocky
» Benefiting from the ISIS experience... Türkiye exploits the tension in the region to expand in Kurdi
Yesterday at 4:26 am by Rocky
» Karbala.. Integrity Commission arrests a broker in the Real Estate Registration Directorate and moni
Yesterday at 4:24 am by Rocky