13 May 2008
Economic News in Review April/May
Economic News in Review
for April/May, 2008
The following resource is meant to quickly introduce the reader to some of Russia's major business news for the month. Please note that we strive to focus on more specific, less-well-covered issues. This news review is developed in conjunction with The School of Russian and Asian Studies, which also produces several other reviews ("obzori") each month.
Please note that this month's edition is intended as as a supplement to the accompanying USRCCNE newsletter. To subscribe to this newsletter, input your email address on our homepage (in the bottom left corner).
The Cyrillic Alphabet as an Obstacle to Economic Development
It took Microsoft more than two years to embark on a localization process of the Windows XP Professional operating system and the Office Suite in Serbia where the Cyrillic alphabet is still widely used. Even so, the first version was in Latin letters.
Russians march in May Day anger at rising prices
The cost of everything from bread to fuel and apartments is soaring as record prices for oil -- Russia's biggest export -- flood the country with petro-dollars.
Moscow police break up unsanctioned protest rally
Police in Moscow have arrested some 35 people over an unsanctioned protest rally in the center of the city, a police spokesman said Thursday.
Inflation to Remain 2-Digit
The inflation will be above 10 percent this year-end.
Why is Moscow so expensive
Its oil wealth, high inflation rate and shortage of mid-range hotel rooms make Moscow a wallet-busting place to visit - let alone live.
Cold Compress for the Russian Economy
If nothing is done, we run the danger of once again running into double-digit inflation this year, while the economic situation is characterized by the imbalance between the growth of labor productivity and labor costs and a widening gap between domestic supply and demand.
Kremlin Joins Russians Keeping an Eye on Prices
The Kremlin must take measures to contain inflation quickly lest Mr. Medvedev lose the support of Russians accustomed to the steady wage increases and economic growth that made Mr. Putin so popular.
Ukraine Has Highest Inflation in CIS
In the first three months of this year, consumer price growth in Ukraine reached 9.7 percent. In the same period of last year, inflation was 1.3 percent in Ukraine.
Banking & Banking Services
Third of Banks' Foreign Loans in Rubles
According to Central bank data published yesterday, foreign assets in the Russian banking system as of January 1, 2008, had reached $95.3 billion, of which 88 percent were in foreign currency ($63.4 billion in U.S. dollars and $16.4 billion in euros).
Poll Shows More Russians Saving Money
Half of the respondents stated that they spend their entire income on living expenses and save nothing, as opposed to 60 percent in 2005.
VTB Issues Its 2007 Annual Report
Then bank's net profit increased 28.4 percent over the previous year to $1.514 billion by unaudited international accounting standards, thanks to higher volumes of crediting.
Russians Learn to Avoid Financial Risk
Only 5 percent of Russians were inclined to take financial risks while making personal investments in 2008, the National Financial Research Agency has determined.
Money for Crediting Running Out
The assets of the banking system in Russia practically stopped growing in January of this year. According to the website of the Central Bank of Russia, the assets of credit organizations increased in January by just 0.01 percent, that is, by 20 billion rubles, to 20.145 trillion rubles.
Crisis with Home Delivery
One of the leaders of mortgage loans, Bank VTB 24, hiked yesterday the rates for all range of mortgage product.
Sberbank Aims at Top 10
Sberbank counts on advancing to the Top 10 list in the nearest five years, intending to attain this purpose by widening the international presence.
The Bank Bureaucrat
Outgoing aid to Russia’s president Sergei Yastrzhembsky will head the project for creating an investment bank of Russia and Italy, while Intesa Bank Group and Development Bank (VEB) will implement that project. The idea was backed up at the highest level, when Vladimir Putin met with Italian entrepreneurs April 2.
Swiss Bank Arrived for Millionaires
One of the leading private banks of Switzerland, Pictet & Cie, has announced the arrival on Russia’s market of big capital management. With no strong competitors around, Pictet will be earning a few hundred million dollars a year, the analysts speculate.
Russians to Be Allowed to Declare Bankruptcy
Russia’s Economic Development Ministry has submitted to government a bill enabling the Russians to declare themselves bankrupt and, therefore, avoid property seizure, Vedomosti reported.
Stocks, Funds, and Securities
Russians square up to western rivals
Renaissance and Troika are winning battles for talent and business.
Lawmakers Sanctioned Placement of Non-Resident’s Securities on Exchanges
Russia’s State Duma has passed in the first reading the bill sanctioning non-resident companies to place securities on Russia’s exchanges.
Stock Markets Rise after Putin Named PM
The RTS and MICEX stock indexes fell at the beginning of trading on May 8, then gradually regained their places.
RAO UES: No Longer a Blue Chip
Russia’s market has lost a blue chip first time in history. The stocks of RAO UES of Russia shed by over 26 percent from early this year and were crossed out of the RTS and MICEX indices. Their place was taken by the stocks of HydroOGK and some other companies of hydrogeneration.
Russians Buy Foreign Currency on Denomination Rumors
The experts say the purchase surged on rumors about forthcoming denomination of Russia’s rubles. Another reason was the U.S. dollar’s decline below 24 rubles.
Troika Dialog Creates Japanese Fund
The Shinsei Troika Russia Fund will be set up in conjunction with Shinsei Bank Ltd. of Japan. That fund will be available to investors through open subscription that will take place May 12-29.
Russia Stocks Cheapest in Europe on Higher Inflation
Russia's stock market is telling Dmitry Medvedev that investors are losing confidence as inflation accelerates and taxes curb profits at the nation's biggest oil producers.
Gazprom Has Third Largest Capitalization
OAO Gazprom has become the third largest company in the world by market capitalization. Gazprom stock gained 5.34 percent on the MICEX on May 8, raising the monopoly’s market value to $348 billion and knocking the Chinese cellular communications operator China Mobile, worth $341 billion, out of third place in the world ranking.
Arbat Prestige Missed Festal Days
The brand outflow from Arbat Prestige chain store commenced straight after the arrest of its co-owners Semen Mogilevich and Vladimir Nekrasov. According to the web, the revenues of retailer shed by over a third on year to $28.9 million in March, which is traditionally one of the most profit-yielding months in Russia.
Market Analysts Believe in Russia More than Statistic Authority
The turnover of Russia’s retail was 10.7 trillion rubles in 2007 and 8.7 trillion rubles in 2006, showed reports of the country’s statistics authority Rosstat.
Wal-Mart Eyes Russian Market
Wal-Mart Stores Inc. is moving closer to a possible expansion into Russia with the appointment of an experienced European executive to scope out possibilities in a vast retail market worth more than $140 billion a year in food sales alone.
Russia a prime location for retail invasion
British retailers, facing fragile prospects in their domestic markets, may be missing out on a "unique" expansion opportunity offered by Russia, according to senior figures at Ernst & Young and KPMG.
Red Tape and Corruption Hamper Retailers in Russia
"Bureaucracy has been one of the main problems historically. Corruption, which is everywhere, is in retail as well.''
Media, Film, and Advertising
Cramer's 'Mad Money' Recap: Russia's TV Bonanza
Russian TV is where America was 40 years ago, as the explosive growth of advertising is propelling the expansion of television programming and viewership.
Russian billionaire to set up magazine for snobs
Mikhail Prokhorov plans to spend $150 million setting up a magazine, website and television station called "Snob."
National Mediagroup to Clinch $1 Bllion Deal with Cable TV
National Mediagroup, where Rossia Bank of Yuri Kovalchuk is the principal holder, is buying out from Suleiman Kerimov the majority stake in Russia’s biggest operator of cable TV, National Telecommunications.
Russia's Studio System
Gorky Studio, the country's oldest film studio complex, is slated for privatization by the end of this year, raising fears that a potential buyer could acquire it for the land, which could be used as a site for a shopping center or residential complex.
Hollywood studios bullish on Russian bear
Co-productions bloom as territory’s output expands.
Technology & Telecom
Internet & Tech Issues
Number Of Russian Blogs Up 23% In 6 Months
About 200,000 entries are made to Russian blogs every day and more than 450,000 comments are entered, women making up the majority of bloggers and men the majority of commentators, Yandex said in a survey.
Russia Requires Wi-Fi Registration
Setting up a home Wi-Fi network or a hotspot would require what sounds like vast amounts of paperwork, akin to putting a cell tower.
Back in the USSR: Soviet Internet domain name resists death
Yan Balayan registered a number of high-profile addresses, including "ussr.su," "stalin.su" and "kgb.su" -- he's asking for $30,000 each, but stands ready to haggle.
Russia should promote hi-tech, not just space services
"We need to significantly expand our presence on the global market for space products and services."
Moderation on Policing Internet
Russia should take a measured approach to policing the Internet, president-elect Dmitry Medvedev said on Thursday in a speech that may ease concerns about a crackdown on free speech in cyberspace.
Russia most pirated country worldwide
The U.S. copyright industries estimate that they lost in excess of $1.4 billion in 2007 due to copyright piracy in Russia.
ITC & Tech Companies
Software Producers Leaving Russia
The Russian software developer Luxoft, part of the IBS IT holding group, announced yesterday that it had opened a development center in Ho Chi Minh City, Vietnam.
Mail.ru Tops Yandex in Daily Visitors
The TNS Gallup Media market research company has released the first results of its national measurements of the Russian Internet audience at the "Internet and Business" conference in Moscow.
The EBRD Will Invest in Russian WiMax
The Norum venture fund, which belongs to the European Bank for Reconstruction and Development, has decided to create a wireless broadband provider from the paging company Tascom.
VimpelCom Seen on the Other Side of Equator
Russia’s cellular giant VimpelCom is approaching the markets of Africa.
Rostelecom Buys 68% in RTComm.RU for $66m
Rostelecom is buying out 68.41 percent in RTComm.RU from Sinterra to become the single owner of this operator, INTERFAX.RU reported.
Khrunichev Center Ready to Design New Super-Heavy Booster
If necessary, Russia’s Khrunichev Center will design a new super-heavy booster able to launch into orbit the cargo of 45 tons to 175 tons, said Vladimir Nesterov, general director of the enterprise.
Russia's PR Agencies Generated ˆ160m in 2007
Russia’s PR-agencies yielded past year only to their Turkish and Indian counterparts in terms of the revenues growth (roughly 20 percent), according to the report of ICCO.
Managers Pool Strategies at Marketing Forum
While some marketing professionals readily interpret negative political trends as beneficial for business activities, others find unexpected barriers in the seemingly prosperous regions.
Demographics and Health
Number of abortions falling in Russia, still three times higher than in the West
"A total of 1.582 million abortions [40.3 abortions per 1,000 women] were performed in Russia in 2006."
Easier to Move to Russia Now
The procedure for ethnic Russians to receive Russian citizenship has been simplified, under amendments to several laws passed in their second readings on Friday.
Court rules Russians can register at allotments
Russia's Constitutional Court ruled on Monday to allow Russians to register their homes built on allotments as their place of residence following appeals from a number of Russians.
Russia "Not Ready" For HIV Measures
Gennady Onishchenko said regulations were not strong enough to allow measures such as methadone replacement therapy for heroin addicts to work properly. Health advocates say such therapy is vital because of the particular way HIV has spread through Russia.
Russia joins global anti-smoking convention
The ratio of smokers and non-smokers in Russia is twice as high as that of Western Europe, and 400-500,000 people die of smoking-related diseases in the country every year.
Labor and Class
Unemployment Lowered to 4.8m
In Russia, the number of unemployed lowered to 4.8 million as of late March of 2008, equaling 6.4 percent of the economically active population.
A Labor Code In Bad Need Of Revision
There is growing realisation that it is better to renegotiate the pro-business Russian Labor Code than to face the consequences of spontaneous and uncontrollable strikes.
Income Gap Between Russian Strata Keep Increasing
Income differences between various Russian social strata increased somewhat in the first quarter of 2008, as they did before, the Federal State Statistics Service said on Wednesday.
Russia has Two Middle Strata but No Middle Class
Whether Russia has a middle class is one of the most highly charged issues in political and intellectual life there.
A billion dollars not enough for Russian rich list
Ten billionaires failed to make Forbes magazine's annual list of the 100 richest Russians that is led by those who built their fortunes on the country's metals resources.
Economy Develops Unevenly in Regions
In the Central District, it grew by 80.4 percent, while in the Far East, its growth was only 40.8 percent.
Russia Goes Through Demographic Boom
Russia experiences a real demographic boom, Health Minister Tatiana Golikova said.
Experts Doubt That Russia's Population Decline Can Be Halted
The Health Ministry has set a goal of halting Russia’s population decline by 2011, stabilizing the number at 143 million people. This, however, will be no easy task, even with the rebound in birthrates.
Accelerating Population Decline Threatens Russia's Future
Only days after Russian officials celebrated an uptick in the number of births in that country in 2007, demographers there have warned that this much cited figure does not constitute a trend and that "the depopulation of Russia will accelerate,"
Russia must do more to bolster population-UN
Karl Kulessa, U.N. Population Fund (UNFPA) chief in Russia, said in presenting the report that Russia's population could fall from 142 million as low as 100 million in 40-50 years.
Russians show little concern about global crisis
They are more worried about rising inflation and the falling dollar.
Russians take optimistic look at their consumeristic future
"In theory, this means that industries can build up production – consumers will be prepared to pay for more goods,” says Vremya Novostei. “But the Russian reality as it is, one has to make allowances for inflation, which distorts the picture, forcing people to go and spend instead of saving.”
Putin's Presidency A Period Of Achievements
An opinion poll has shown around 78 per cent of Russians are satisfied with the Kremlin chief’s eight-year era.
The Fins to Drive Luxury Brands to Russia
Finland’s Valmet Automotive is eyeing construction of assembling facilities in the Leningrad region, which annual capacity will reach 50,000 cars.
Ford Sales Recover from Labor Unrest
The Association of European Businesses has published sales data on new foreign car sales in Russia in the first quarter. A total of 454,000 foreign cars were sold in that period.
Chevrolet Lacetti Is Most Popular with Russians
Chevrolet Lacetti tops the list of the most popular foreign cars in Russia by results of the first three months, although it was only the number 9 in sales past year.
British Buy into Russian Car Dealership
Inchcape Plc, Great Britain's largest car dealer, announced yesterday that it would acquire 75.1 percent of shares in the Russian Musa Motors dealership by the end of the year for about $450 million.
Russian Cars Cannot Compete With Foreign Brands
Russian car makers lag behind their foreign rivals, and the share of domestic cars on the Russian market has reduced, Russian First Deputy Prime Minister Sergei Ivanov said.
GM to Launch Carmaker in St. Petersburg
General Motors will launch a plant in St. Petersburg on November 5, 2008.
Russia To Become One Of World's Top 3 Grain Exporters In 5 Yrs
Russia could become one of the world's top three grain exporters within five years, Russia's Agricultural Minister Alexei Gordeyev has been reported as saying.
Government Intends to Cut Meat Imports
Russia does not meet its demand for beef, and will be unable to for several more years to come. “We need to take account of our own resources for pork and poultry and restrict imports through a tariff quota,” Zubkov stated.
Belvedere Eager to Buy Russia’s Kristall Distillery
Kaluga Kristall distillery that is controlled by ex-chief of Rosspirtprom Sergei Zivenko (62 percent, the remainder belongs to Rosspirtprom) may change the majority holder in May. It emerged that one of Europe’s biggest alcohol holdings, Belvedere SA, is negotiating the buyout of Zivenko’s stake.
In recent decades, Swedish vodka maker Absolut has left many Russian liquor producers in the dust to become one of the world’s best-selling vodka brands.
Coca-Cola to Make Kvas, Top-Selling Russian Beverage
Coca-Cola Co., the world's largest soft-drink maker, began making traditional Russian beverage kvas, the country's best-selling non-alcoholic drink.
Russia Should Arrange Exports Of Drinking Water
United Russia leader Boris Gryzlov has proposed arranging export of drinking water out of Russia.
Russia Close to Privatizing Huge Electricity Producer
A plan to privatize the world’s largest electricity company is entering the home stretch, successfully it seems, in spite of its complexity and the general hostility toward privatization in today’s Russia.
Russia unveils oil, gas tax cut proposals
The Russian Finance Ministry unveiled on Monday a series of tax break proposals for oil and gas industries as part of its fiscal policy strategy for 2009-2011.
IEA says "gas OPEC" possible
An OPEC-style gas charter is feasible but could not come to market for at least 10 years, the International Energy Agency (IEA) said on Wednesday.
Gas Exchange Will Be Set Up in St. Petersburg
Gazprom, in conjunction with Gazprombank and the Interregional Gas and Oil Complex Exchange, plans to establish Europe's largest natural gas exchange in St. Petersburg.
RosUkrEnergo to Sell Fuel to Naftogaz on Russia's Soil
Swiss trader RosUkrEnergo, with which Naftogaz entered into the contract for 2008 gas supplies, will be selling gas to Ukrainian holding in Russia.
Russia's gas giant eyes US market, invests billions in new fields
Russia's state-controlled natural gas giant aims to become a significant supplier in the United States, expanding beyond the European market that it already dominates.
Gazprom Gets Deposit sans Competition
The Ministries of Natural Resources and of Industry and Energy have compromised and agreed that Gazprom can receive the Chayanda natural gas field in Yakutia without competition.
Gazprom Pays Rosgazifikatsia in Full
Russian President Vladimir Putin has signed an order establishing direct government control over Gazprom. After several years of negotiations, Rosgazifikatsia shareholders, who own 0.89 percent of the stock in Gazprom, will receive market price for their shares – $2.76 billion.
Gas Field Found in Hungary
Gazprom will have new competition in Europe. Exxon Mobil, MOL and Falcon Oil & Gas have announced plans to produce about 10 billion cu. M. of natural gas at a new Hungarian gas field and export the fuel to Austria and Serbia. That fuel will be an alternative to Russian exports.
TNK-BP comes under renewed Gazprom pressure
"We cannot wait endlessly," Alexander Medvedev, deputy chief executive of the state-controlled gas company, said on Wednesday. "We received a signal from the Natural Resources Ministry that if this continues they could return to the question of annulling the licence."
Gazprom Profits Rising Fast
It is estimated that the profit the company derives from exports will be quadrupled. The board of directors will consider pricing policy for the CIS and Baltic countries today.
Russia's Gazprom Seeks EU Politicians Amid Gas Boom
Outgoing Italian Prime Minister Romano Prodi said Monday he had turned down a Gazprom offer to become chairman of the South Stream natural-gas pipeline, which will pump as much as 30 billion cubic meters of Russian gas into the European market.
LUKOIL Sells American Filling Stations
LUKOIL had decided to sell some of the filling stations in the United States that it bought in 2004 from its strategic partner ConocoPhillips.
Russia Moves Siberia Oil Link Route, Raising Costs $846 Million
Russia will shift the route of an oil pipeline to Asian consumers on environmental demands, increasing project spending by 20 billion rubles.
Russia's oil industry. Trouble in the pipeline.
Despite booming demand and record prices, Russia's oil industry faces problems.
Credit dries up for Russia-focused oil firms
Small, foreign-owned oil and gas firms operating in Russia face a challenge financing projects, as tightening credit markets and persistent concerns about Kremlin field seizures prompt bankers to withhold lending.
Russian Output Slumps As Oil Hits New Highs
Russian oil production, for years a vital font of new crude for world energy markets, has begun to stagnate and even slump.
Oil prices soar to $120, and this is not the limit
The price was definitely urged up by speculators, who have opted for investing in oil contracts now that the dollar is falling. Denominated in U.S. dollars, these contracts are becoming more expensive by the day.
Oil Enriching Nenets, Bankrupting Traditions
One of Russia's newest oil-producing regions, the Nenets autonomous district is home to lucrative projects for LUKoil and Rosneft. It is also home to a population of 7,000 indigenous Nenets, whose livelihood and seminomadic way of life is being increasingly threatened by the region's growing oil industry.
Minerals and Mining
Tender-Free Mineral Rights May Return
The Russian Ministry of Natural Resources is preparing amendments to the law “On Mineral Wealth” that will allow a return to investment competitions, Deputy Minister of Natural Resources Vladimir Lozbinev told a parliamentary hearing at the State Duma yesterday.
U.S. approves $810 mln steel mill deal for Russia's Severstal
The U.S. Department of Justice has approved a $810 million deal allowing Russia's largest steel producer Severstal to purchase a U.S. steel mill from ArcelorMittal, local media reported on Wednesday.
Deal Consolidates More of Russia’s Mining Industry
The aluminum tycoon Oleg V. Deripaska said Thursday that he had bought 25 percent of the Arctic mining company Norilsk Nickel, a deal that furthers Mr. Deripaska’s quest to consolidate the Russian metals and mining industry.
Deripaska Fights Waste Claim as Putin Pledges to Protect Nature
Yury hoists a net caked with brown sludge from the waters of Russia's Lake Baikal and curses the pulp plant he blames for killing the omul fish he relies on to make a living.
The Arctic - melting ice reveals mineral wealth
The Russian Academy of Sciences has summed up the first results of its expedition to the Kara Sea in October 2007.
Gazprombank Buys 51% of Gold Deposit
The Canadian company Fortress Minerals, which owns the major Svetloe gold deposit, has found a partner for its gold production in Russia.
Mechel Buys Two Romanian Steel Plants
The Russian Mechel group is buying the Ductil Steel Buzau and Otelu Rosu plants
ALROSA Gets Iron Deposits in Yakutia
The ALROSA company has begun a massive project to develop iron deposits in Yakutia. It will have to spend an additional $10 billion to create ore processing facilities.
Real Estate and Development
Construction Authority Unveils the Estimate
Russia’s construction authority, Rosstroy, has unveiled the cost of housing construction in Moscow. It was just 34,692 rubles per a sq meter in 2007, while the market price averaged 161,784 rubles (by Miel estimate).
Set Back For Tower Opponents
The St. Petersburg City Court threw out a suit claiming that the project’s funding scheme is illegitimate.
Doubletree by Hilton to Launch in Russia
Doubletree by Hilton Novosibirsk expected to open in Fall 2008
Rosimushchestvo Wants More Money of East Line
Rosimushchestvo doesn’t view the amount of 92 million rubles sufficient as the annual lease.
President Signs Decree on Federal Land
On his first day on the job, almost immediately after his inauguration yesterday, Russian President Dmitry Medvedev signed an order directing the Vladimir Putin government to begin a large-scale redistribution of federal lands this year.
A Building Boom Brings Glitz to a Dowdy City
Five miles south of the Kremlin and Moscow's touristy center, there's a trash-strewn peninsula in the city's river. Stray dogs live by a scraggy patch of woodland, and salespeople while away the days in a remote market. It won't be there much longer.
Medvedev Plans to Build 1 Million Homes a Year
Nearly 80 percent of the country's 142 million people live in Soviet-era apartments, Medvedev said, according to a transcript of his remarks on his Web site. That compares to 10 percent to 30 percent in countries like the U.S., Canada and the U.K., he said.
Gambling Games More Expensive Than Olympic Ones
On aggregate, the creation of four gambling zones in Russia costs 727.5 billion rubles ($31.2 billion), which is twice as much as Russia will pay for Sochi 2014 Olympics.
Olympic Inspectors Won by Optimism
The Sochi visit of IOC Coordination Commission to monitor progress in the 2014 Winter Olympics preparation has revealed no grand difficulties.
Chief of Russian Olympic construction corp. resigns
Prime Minister Viktor Zubkov said on Thursday he had signed a resolution to relieve Semyon Vainshtok, an influential businessman, of his duties as head of Olympstroi at his own request, while also praising his performance at the post.
The Games plan of Rusal chief Oleg Deripaska
"Russia has great potential and tremendous opportunities. I truly believe that it’s the best place to be in as a businessman."
Other Economic Spheres
Insurers of Questionable Reputation Advanced to Top 25
Russia’s biggest insurers suffered collection decline in the first quarter. At the same time, two little-known insurers of St. Petersburg, Solo and Neva Alliance, emerged as the market leaders, posting collection of billions of rubles, the premium growth beyond any reasonable expectations and the actual absence of insurance payments.
Rosoboronexport to Step Up Armaments
Russia may step up overseas supplies of weapons in 2008.
Russia Elaborates Damage Suits to Noga
The RF government is elaborating damage suits to Noga, by which demand the accounts of Russia’s state companies were frozen in France in early this year.
Did Shock Therapy Help Russia?
Now that the Russian economy is doing well, many an economist would want to take credit for it. Anders Aslund, did just that…
Forget the new Cold War, we're all off to Russia
Relations may be frosty, but British tourist numbers are booming.
Tax and Legal Disputes
Barred From Russia, He Refocuses His Strategy on the Middle East
For more than a decade, William F. Browder built Hermitage Capital Management into a force in the Russian marketplace. But in 2005 Mr. Browder was denied re-entry into Russia after the government sent him a letter deeming him a threat to national security and public order.
Hermitage seeks to recover seized Russian assets
UK investment group Hermitage Fund has filed suit in a Moscow court to recover control of three Russian companies it says were seized from it last year, a Hermitage spokesman said.
PwC Facing New Investigation
A PwC spokeswoman said the firm, which is fighting back tax claims and has been fined for allegedly mishandling audits of bankrupted oil firm Yukos, complied fully with Russian auditing standards.
Russian court upholds decision on $10.8 mln PWC back tax claim
In a similar case, auditor Ernst & Young said last week it had received a back tax claim for over 390 million rubles ($16 million).
Rosenergoatom Faces Tax Charges
Federal-controlled Rosenergoatom Consortium that manages all nuclear power plants of Russia has been served with tax claims of 1.7 billion rubles for 2004 and 2005.
Russneft to Face Double Tax Claims
The tax inspection of Russneft for 2006 was completed. According to informal data, the amount of extra charges may reach 20 billion rubles, i.e the tax claims to the company will double.
Bank of NY Mellon seeks end of Russian case
Bank of New York Mellon Corp fought on Monday for the dismissal of a $22.5 billion Russian lawsuit, questioning the size of the claim and arguing that a Russian civil court cannot enforce U.S. criminal laws against it.
FT interview: Dmitry Medvedev
I think these priorities are completely obvious. The main one is to continue the social and economic course which has emerged and evolved in our country in recent years. The goal of this course is to improve the quality of life for all Russian citizens.
Russia’s Govt to Double Road Construction in 2010
Russia’s government intends to double the road construction in 2010 vs. 2008, Vice Premier, Finance Minister Alexei Kudrin announced April 8.
Weak Dollar Slows Down Stab Fund Growth
Finance Ministry has released data on the size of the RF Reserve Fund and the National Welfare Fund. They amounted to $162.5 billion on aggregate as of May 1. Both funds lost in April more than $1.5 billion on the U.S. dollar depreciation.
Economic Ministry Violated the Package Agreement
The Economic Development Ministry has refused to agree on the draft of the president’s ruling to transfer to the corporation the state stakes in more than 500 enterprises.
Tax Incomes Grows Even without VAT
In spite of the transition from monthly to a system of quarterly VAT payments, the Federal Tax Service was able to report growth of 25.03 percent in tax collection in the first quarter of the year, compared to the same period of last year.
Bureaucracy and Corruption
Gryzlov Calls for Bureaucrats Reduction
Reduction in number of federal bureaucrats is one of conditions for the development of democracy in Russia, said Boris Gryzlov, speaker of the State Duma and leader of United Russia.
Public Chamber Supports Psychological Tests Of Prospective Civil Servants
"Psychological tests must be compulsory for prospective civil servants, especially for judges, law enforcement officiers and bureaucrats distributing material resources."
There Is Nothing Normal About Corruption
Berkeley Professor Steven Fish noted that Russia was "just as corrupt as one would expect it to be, given the prominence of natural resources in its exports." The oil revenues are a cause of the country's authoritarianism and corruption, but both have become quite extraordinary.
Monetary and Fiscal Policy
Why get rid of the kopeck?
Arkady Tkachuk, Director of Goznak Association in charge of printing banknotes, said, "Kopecks cost more than their nominal value and do not return to banks. This is why there is no point in minting them."
Ruble Gains Necessary, Former Central Banker Says
Russia's central bank will find it "very difficult" to slow inflation without allowing the ruble to appreciate as foreign investment increases, said Oleg Vyugin, a former central banker and deputy finance minister.
A guarantor of fiscal discipline
The softly-spoken Alexei Kudrin is a great survivor in the bare-knuckle world of Russian politics. Finance minister since 2000, and a deputy prime minister since last autumn, he is one of the longest-serving finance chiefs of the world’s big economies.
Russian Business Association Meets With Medvedev Over State Control
"We didn't seek any loosening of the rules for big business - we didn't pursue the logic that once small-scale business has got it, it's about time we got some too. It is not fiscal functions but observance of law that should be the central point of control."
Will Medvedev's Russia tread more lightly on business
The intense state scrutiny of private oil firm TNK-BP, now facing an environmental review, echoes Putin-era takeovers. The president-elect is reputedly more liberal.
The Diarchs and Big Business
Medvedev's first high level meeting with top leaders of big business (so called oligarchs) occurred a few days ago in the Kremlin where Putin used to meet them while he was president. A dozen-plus of the richest Russian individuals from the 'Forbes' list were there controlling quite a chunk of the nation's GDP. The tone set at the meeting is somewhat like a barometer of current relations between government and business.
Size of public sector in Russia is unjustified
Russian President Vladimir Putin has outlined the strategic state policy in the area of reforming the system of managing state property.
Russia WTO deal this year, "inshallah": U.S. aide
The use of the Arabic phrase for "God willing" echoed comments Andrey Denisov, Russia's first deputy minister of foreign affairs, made moments earlier in the describing the U.S.-Russia economic agenda.
The European Commission asked Russia’s Foreign Office to subdue its officials.
Russia Doesn’t Want a Tough Cap on Carbon
As much flak as the Bush administration gets for opposing calls for a touch new cap on gobal-warming emissions to replace the Kyoto Protocol, it’s instructive to remeber the administration is hardly alone.
Russian Wealth Fund Rattles West
For months, Russian Finance Minister Alexei Kudrin has been traveling the world to make a pitch: The Kremlin's new National Wealth Fund, which starts out with $32.7 billion to invest but could grow to many times that, will be all business. It's been a hard sell.
EU could get mandate for partnership talks with Russia on Apr 29
Poland, which had until recently blocked EU-Russia talks on a new Partnership and Cooperation deal over Moscow's embargo on Polish meat, said on Thursday it was ready to lift its objections to negotiations.
Russia to Pay World Bank Loans in Advance
Russia will probably pay off the World Bank loans in June of 2008; the amount of $3 billion will be settled ahead of schedule, Deputy Finance Minister Dmitry Pankin told reporters in Washington.
IMF sees growth cooling in Russia, emerging Europe
Economic growth in Russia and emerging European economies will likely cool this year as financial market turmoil curbs access to credit and demand for oil, the International Monetary Fund said on Wednesday.
Putin's $475bn jackpot could double economy by 2010
However, for Russian macroeconomic stability to endure, Russia needs to cut spending by 1%-1.5% of GDP over the next four years, Kudrin argued. He predicted the oil and gas sector's share of the economy would fall from 21% to 14%-15% in the next four years.
World Bank forecasts Russian GDP growth at 7% in 2008
Russian Finance Minister Alexei Kudrin said in February that Russia's GDP could grow by 7% in 2008 instead of the planned 6.6%.
Medvedev Boxed In by Oil as Putin Bequeaths Economic "Dead End"
The government has ignored advice from the World Bank and other organizations to invest in other industries, start-up companies and infrastructure.
President Medvedev's economic challenges
Russia's new president, Dmitry Medvedev, has inherited many economic problems, such as Russia's dependence on raw materials, monopolies, red tape and corruption, which are spurring prices and hindering economic development.
Ruble Cubed? Putin Puts Medvedev in Dilemma on Prices
Merrill Lynch & Co., Goldman Sachs Group Inc. and Deutsche Bank AG predict gains of as much as 4 percent in the next six months.