India-Russia: News & Analysis

[vishvak]

We should be hedging our trade too, to reduce any damage from ongoing scams(example Libor scam) and also for future.

[arshyam]

Austinji - wasn't the SWIFT issue why India couldn't pay Iran for the oil we purchased, and had to work out some alternate arrangement through a desi bank in Kolkata?

[Cosmo_R]

India's foreign trade

Total exports: $300 billion

Brazil: 1.5%
Russia: 1%
China: 5%
South Africa: 1%
_______________

BRICS: 9%
_______________


Total imports: $490 billion

Brazil: 1%
Russia: 1.5%
China: 10%
South Africa: 1%
____________

BRICS: 14%
____________


The equation is far more skewed when it comes to other financials transactions (FDI, FII, remittances), so lets not get ahead of ourselves, nurturing alternatives to the SWIFT payment system. We're not in Russia's shoes, nor will we ever be.

If it ever comes to a situation where we've been excluded from the SWIFT, we'll have far bigger problems to worry about than the modalities of international trade.

Yup and this why we cock a snook at the rest of the world and show we mean business

[Niranjan]

Russia - A wounded economy



The Russian economy - The end of the line

Right now BRICS are doing lot of currency swap agreement

Swaps are a very common mechanism between companies too.

[Austin]

Austinji - wasn't the SWIFT issue why India couldn't pay Iran for the oil we purchased, and had to work out some alternate arrangement through a desi bank in Kolkata?

Yes some arrangement beyond swift had to be made , its not like you cannot pay if there is no SWIFT mechanism global trade used to run even before SWIFT but it would take a month or little more for transaction to be done via multiple banks or credit mechanism etc.

The issue is more deep here , US does not want any alternate mechanism that would challange their Economy might and BRICS is one of the fastest growing economy in the world and hence US would oppose overtly or covertly things like BRICS Bank or alternate to SWIFT or Payment Card System etc

You just have to look at US media on the hostile attitude towards BRICS or Chinas Bank etc.

ITs normal though no one wants to give up power easily unless its forced to do so.

Trading within BRICS using Mutual Currency would also reduce dependence on Euro and USD and would help in appreciating BRICS nation currency in the long run which is to say will make it stronger.

[Shankk]

Russia losing $140 billion from sanctions and low oil prices

The country is losing up to $140 billion per year because of falling oil prices and sanctions with Western nations, according to estimates from Russia's finance minister Anton Siluanov.

Siluanov said in a speech on Monday that falling oil prices were causing the most damage -- leading to $90 billion to $100 billion in annual losses. Russia, which is a major oil exporter, has suffered immensely as oil prices have fallen by roughly 30% since hitting a recent peak in June.

Meanwhile, Western sanctions are expected to lead to another $40 billion in annual losses, said Siluanov.

In October, he said Russia is living in an "alternative economic reality" by budgeting as if oil is still trading at $100 a barrel. (In fact, oil has been trading at or below $80 for much of the autumn.)

Silonauv also noted Monday that everyday Russians are converting their savings from rubles into other foreign currencies as the value of Russia's money has plummeted.

The Russian ruble has fallen by about 27% versus the U.S. dollar since the start of the year.

[Austin]

Russian Economy has no capital controls and its Currency has full capital account convertibility , the only BRICS country to have this which means its very easy for capital to come and leave the country without restrictions

As far as sanction goes , Even without Russia counter sanctioning Europe except for agriculture product , there is an eminent recession in Europe ..... and we still have interesting times ahead

http://au.ibtimes.com/articles/573714/2 ... sa-ecb.htm

[Austin]

Key Agreement on Rupee-Rouble trade and recognisation of mutual degree , the last was a key demand of many students should make them happy.

http://www.business-standard.com/articl ... html[quote]

India would push trade in national currencies, a long-standing demand of exporters in the pharmaceuticals and engineering sectors, officials said. India and the former USSR had used the rupee for bilateral trade. As India was low on foreign exchange at that time, it bought Russian defence equipment, as well as other products, in rupees through a ‘rupee account’. Russian importers bought Indian goods by using that account, where the money was parked.

Now, the two sides will also seek ways to increase purchase of artillery from Russia, which is increasingly warming up to China and Pakistan in terms of building robust military ties.

The Ministry of Finance is believed to be considering a proposal of making defence purchases in rupees.

It is expected Russia will also push for recovering the money it had invested in a joint venture with India to produce titanium here. The plan was stuck during commercial negotiations. India plans to propose an out-of-court settlement and ask the Indian partner, Indian Rare Earth Ltd, to refund the Rs 50 crore it has already been paid.India might also announce investments in Russia’s hydrocarbon sector.

During Putin’s visit, two countries might also sign a pending ‘mutual recognition agreement’, under which both sides will recognise each other’s educational degrees for better job prospects.[/quote]

[Niranjan]

There is no need to build a competing protocol to SWIFT. All one needs is a competing clearinghouse to process SWIFT traffic to a group of banks. One can retain the SWIFT protocol. Which is perhaps what Russia is doing, else no way she can build a competing system in a few months. Not possible.

Silly to rebuild a complete competing protocol.

[habal]

Russian Economy has no capital controls and its Currency has full capital account convertibility , the only BRICS country to have this which means its very easy for capital to come and leave the country without restrictions

As far as sanction goes , Even without Russia counter sanctioning Europe except for agriculture product , there is an eminent recession in Europe ..... and we still have interesting times ahead

http://au.ibtimes.com/articles/573714/2 ... sa-ecb.htm

then why don't they impose some controls. These guys are living in some alternate reality world.

even earlier, all Russia had was some oligarchs and some other bums who wanted everything best the west had to offer and as soon as possible and as much as possible. This greedy class has done a lot of damage to Russian independence and even then they do not want to restrict the freedoms of this class.

If Russia establishes a SWIFT bank, then not only Russia but India, Iran & China can trade on that also. This one move will curtail USA ability to impose terrorism on third world countries more than anything else.

India has very slyly introduced the Rupay credit card payment system, to marginalize MasterCard and Visa terrorism that Russia got to see in a week of sanctions. If Russia can manage SWIFT then we can latch onto that also.

[Niranjan]

Austinji - wasn't the SWIFT issue why India couldn't pay Iran for the oil we purchased, and had to work out some alternate arrangement through a desi bank in Kolkata?

SWIFT is a protocol, in which there is a field for routing - to a bank. All you have to do is disable that routing number from your table and your transaction goes nowhere. In the case of Iran they disabled their routing number, which prevented Indian banks from reaching Iranian banks.

If Russia can manage SWIFT then we can latch onto that also

India will need to have two systems in her tables. One for the West and one for the East. Doable. Cannot say what the repercussions would be. SWIFT could be proprietory.

[Austin]

then why don't they impose some controls. These guys are living in some alternate reality world.

even earlier, all Russia had was some oligarchs and some other bums who wanted everything best the west had to offer and as soon as possible and as much as possible. This greedy class has done a lot of damage to Russian independence and even then they do not want to restrict the freedoms of this class.

If Russia establishes a SWIFT bank, then not only Russia but India, Iran & China can trade on that also. This one move will curtail USA ability to impose terrorism on third world countries more than anything else.

India has very slyly introduced the Rupay credit card payment system, to marginalize MasterCard and Visa terrorism that Russia got to see in a week of sanctions. If Russia can manage SWIFT then we can latch onto that also.

It takes a lot of effort for a country to get to a level where they have no capital controls and full current account convertability.

The former they achieved in 2008 and latter in just this month.

Even in 2008 during global crises they did not put capital control , its more of a question on confidence on Countrys monetary policy and reserves to back it up. ( Reason why they also receive highest FDI after China )

Imposing Capital control will undo the work and reduce investors confidence.

Free floating currency means Rouble will appreciate and depreciate according to economic factors which puts less pressure on budget due to currency depreciation due to global Oil Prices as budget is in Rouble and not in USD.

According to an analysis done by Wall Street Russia has the highest resource by Value of around $75 Trillion.

http://247wallst.com/special-report/201 ... ies/print/


You see Madam Albright was complaining why Russian resource belongs to the World

[Deans]

Russia losing $140 billion from sanctions and low oil prices

The country is losing up to $140 billion per year because of falling oil prices and sanctions with Western nations, according to estimates from Russia's finance minister Anton Siluanov.

Siluanov said in a speech on Monday that falling oil prices were causing the most damage -- leading to $90 billion to $100 billion in annual losses. Russia, which is a major oil exporter, has suffered immensely as oil prices have fallen by roughly 30% since hitting a recent peak in June.

Meanwhile, Western sanctions are expected to lead to another $40 billion in annual losses, said Siluanov.

The headline is misleading. If the Oil price has fallen 30% and the rouble has also depreciated 27%, then Russia is getting roughly the same amount of roubles per barrel of Oil as it was earlier.
The figure of $40 Billion loss from Western sanctions, is just the reduced level of import/export from the West, there is a corresponding increase in Russian production of sanctioned items, which helps the economy.

Despite the current crisis and the doomsday predictions about Russia, Russia's GDP grew 1.3% in 2013 vs. 0.1% for the
whole of the EU (removing Germany EU growth would have been 0). Similarly, unemployment in Russia is far lower than EU.
In 2014, which has been Russia's worst year for a while, GDP growth in Russia and EU will both be sub 1%.

[Tuvaluan]

India should continue to do business with Russia after establishing some Rs-Ruble rate or some mechanism for establishing such a rate, but then US will ensure that Rs.-$ conversion gets worse...tough one. The more fundamental point is to get cheap oil/fuel, and ask the US to go suck its own schlong if it starts to make a noise about "global warming" or "ozone layer".

[Philip]

Will it happen?

http://english.pravda.ru/society/storie ... 0-vanga-0/

Society » Real life stories
Vanga: Russia will be world's only superpower

31.01.2011
On January 31st, legendary Bulgarian mystic and clairvoyant Vanga would celebrate her 100th anniversary. Vanga became world-known for her incredibly precise prophesies which she made in many fields, including politics.

Vangelia Pandeva Dimitrova's interest in politics was not incidental. She was born on the territory of modern Macedonia - the land which was an apple of discord for years between Turkey, Greece, Bulgaria and Serbia. Her native land experienced two World Wars in which the Bulgarians and the Serbs were struggling in different camps.

Vanga settled in Bulgaria's Petrich during the 1930s, where she predicted the beginning of WWII. Her fame spread very quickly throughout Bulgaria, and one day she was visited by King Boris III. Vanga warned the king against Bulgaria's participation in the war. Bulgarian politicians did not listen: the country joined Hitler and then found itself among the defeated. It was only the post-war patronage of the USSR that rescued Bulgaria from the territorial dismemberment.

The Bulgarian politicians, who visited Vanga, spread the news about the prophetess to their counterparts from other countries. As a result, Vanga became known in the whole world. The list of events, which she predicted so precisely, is really impressive.

King Boris III visited her again in 1942 and 1943. The blind woman (she was in her thirties back then) told the king that he would die on August 28, 1943. In February of 1943 she told the king that she could see a red flag above his palace. Her predictions came true. King Boris III died on August 28, and the red flag was raised above Sofia in the autumn of 1944. Bulgaria became a socialist country.

In socialist Bulgaria, where Vanga spent most of her life, people treated clairvoyants and mystics mostly negatively. Communists believed that Vanga was spreading superstitions, distracting people from the building of socialism. In the autumn of 1952, the prophetess found herself in big trouble when she said that Josef Stalin would go into the nether world. Vanga was jailed as a result of that prediction, albeit not for long.

The prophesy came true - the Soviet generalissimo died indeed. Stalin's death did not save the prophetess from political persecution, though. The fact that Vanga was a native of Macedonia (Yugoslavia) was haunting the minds of Bulgarian special services. Bulgaria was having very tense relations with Josip Broz Tito's Yugoslavia, which gave Bulgarian secret service a reason to believe that the prophetess was an agent of the western neighbor.

During the 1970s, Bulgarian special services continued to collect compromising materials against Vanga. They searched her home once and found 90,000 levs, which was a huge amount of money for a socialist country. Vanga was not jailed, but she was described in reports as an underdeveloped and impudent woman.

There were high-ranking officials in the country, who defended Vanga. Many in Bulgaria still remember the story when an official lost his briefcase with important documents. The police and the special services could not find the case, so they had to ask Vanga's help. The case was found, and the prophetess was awarded with a letter of gratitude.

In general, one may say that the authorities of socialist Bulgaria treated Vanga differently. On the one hand, the communist ideology made the authorities struggle against the "witch." On the other hand, the local elite realized that they could make profit on Vanga. Special services took her visitors under control and began to collect 10 levs from Bulgarian and $50 - from foreign visitors. Economists calculated that Vanga brought 9 million levs to the Bulgarian treasury.

In 1967, Vanga was employed for a non-existent position as a "state official." Her life took such a turn owing to the efforts taken by the daughter of then Bulgarian leader Todor Zhivkov, Lyudmila Zhivkova. Lyudmila was interested in esoteric teachings and visited the prophetess many times. Lyudmila enjoyed great popularity in the country. She developed a very warm friendship with Vanga herself.

In the beginning of 1979 Vanga said that Lyudmila Zhivkova would die in a car accident. Special services tried to prevent the tragedy, but it did not help. Zhivkova survived the car accident, but then died two years later.

In 1987, when Todor Zhivkov was still ruling the country, Vanga predicted major changes for the nation to come. She said that Bulgaria would soon have another leader, a prominent scientist, who would not be a proponent of Lenin's doctrine. In 1992, Bulgarian philosopher Zhelyu Zhelev came to power in the country. The socialist regime in Bulgaria collapsed, and the country continued its development following EU and NATO standards.

Vanga was predicting major political events happening in the whole world. She predicted the incursion of Soviet troops in Czechoslovakia, the assassinations of US President John F. Kennedy, Indian prime ministers Indira and Rajiv Gandhi, the collapse of Anastasio Somoza's dictatorship in Nicaragua and many other historic events.

Nowadays, many Russians wonder if Vanga's prophecy about Russia is going to come true some day or not. In 1979, during her meeting with writer Valentin Sidorov, Vanga said: "All will thaw, as if ice, only one remain untouched - Vladimir's glory, glory of Russia. Too much it is brought in a victim. Nobody can stop Russia. All will be removed by her from the way and not only will be kept, but also becomes the lord of the world."

Before her death in 1996, Vanga predicted glorious future for Russia again. According to the Bulgarian clairvoyant, Russia will be the world's only superpower. Specialists calculated that 68 percent of her prophecies had come true. We only can wait and see if her other prophecies become real or not.

Vadim Trukhachev
Pravda.Ru

[member_20317]

As is their wont, the west is lying.

Russian oil production began going down in absolute terms since November 2013 while the prices have started to come down only since June 2014. In effect the Russians are saying that we knew we will have to starve you off oil so here is what I do.

If now somebody manipulates the prices of the lesser quantity of oil downwards then obviously there would be payback some other place. And that is not Russia. On top of that, the manipulation only puts cheaper oil in the hands of Chinese and Indians while forcing the Araps to revise their strategy also. And on top of that pushing the fracking in US into the ground. Now if we treat this as a CT then obviously the EU sources would also have discounted this CT while putting out this report.
http://euobserver.com/economic/125118

According to an EU source familiar with the legal texts, the economic effect of the sanctions will hurt the Russian economy by €23 billion this year (1.5% of its GDP) and €75 billion in 2015 (4.8% of its GDP).

The Economist meanwhile has calculated that the pain Russian firms will suffer from these sanctions could go up to one trillion US dollars (€744bn).

But the EU will also be hurt by the capital markets restrictions and trade bans for defence, high technology and goods that can be used both for military and defence purposes.

The EU commission expects the EU to lose €40 billion (0.3% of GDP) this year and €50bn in 2015 - the equivalent of 0.4 percent of the EU GDP - as Russia is expected to retaliate with trade bans of its own against EU countries, the source said.

The admitted counter-losses merely to EU, over 14+15 are almost the same as it is to Russia . Mind you this much is admitted most likely without the CT of hidden losses. And the west is not above putting out CTs among its minions is obvious from the figure of €744bn – Ghantpal I say. EU is reaping the rewards of being the US chum. While we Indians are enjoying some respite from mehngai. I am loving it. Thank you Putin. Thank you Obama.

[Aditya_V]

I hope we can export food items and other stuff the Euro bloc was exporting to Russia.

[Austin]

Good Read Interview intersting part

http://rbth.com/science_and_tech/2014/1 ... 41719.html

RBTH: Is eavesdropping on computer networks a real thing or a myth about spies?

I.S.: You can meet with both unintended and subversive defects in all devices – smart phones, tablets, personal computers, and even network formation tools such as servers and routers.

As a rule, unintended bugs are a result of developer errors, as well as ordinary manufacturing mistakes. Subversive defects are software and hardware implants that are planned in advance. These defects make leaks of confidential information possible.

A whole host of testing laboratories in Russia is involved in searching for these defects. Since 2008, just one of these labs has detected more than 40 subversive defects in foreign-produced hardware and software.

Programmable chips that are outwardly identical but function differently depending on the state of their memory are becoming more and more widespread. What this means is that not only the circuit, but also the program inside the memory needs to be analyzed. We perform that kind of analysis.

[RSoami]

Every time Russia has a problem, the oil prices are gonna crash. India must create a strategic reserve. If the govts play smart, they can stock up on petroleum and save billions.

[krishnan]

do we have such a facility to stock up huge reserve ?

India

In 2003 India started the development of a strategic crude oil reserve[16] sized at 37,400,000 barrels (5,950,000 m3), enough for two weeks of consumption.[17] Petroleum stocks have been transferred from the Indian Oil Corporation (IndianOil) to the Oil Industry Development Board (OIDB).[18] The OIDB then created the Indian Strategic Petroleum Reserves Ltd (ISPRL) to serve as the controlling government agency for the strategic reserve.[19]

The facilities are:

Mangalore, State of Karnataka. Capacity of 10.995 million barrels (1,748,100 m3).
Padur village, Udupi in the state of Karnataka. Capacity of 18.7 million barrels (2,970,000 m3).[20]
Visakhapatnam, State of Andhra Pradesh. Capacity of 1.33 million tonnes.[21]

On 21 December 2011, it was announced that India planned to greatly augment their crude reserve capacity to 132 million barrels by 2020, a senior oil ministry official stated.[22]

wiki...not sure how the planned augmentation is going

[Austin]

Every time Russia has a problem, the oil prices are gonna crash. India must create a strategic reserve. If the govts play smart, they can stock up on petroleum and save billions.

It does not affect the budget as Rouble has devalued according to Oil Price , So Export becomes more competitive and import becomes expensive

Read this to understand how budget works Oil prices of 70$ per barrel not to have adverse impact on Russian budget - Ulyukayev

[Austin]

do we have such a facility to stock up huge reserve ?

India

In 2003 India started the development of a strategic crude oil reserve[16] sized at 37,400,000 barrels (5,950,000 m3), enough for two weeks of consumption.[17] Petroleum stocks have been transferred from the Indian Oil Corporation (IndianOil) to the Oil Industry Development Board (OIDB).[18] The OIDB then created the Indian Strategic Petroleum Reserves Ltd (ISPRL) to serve as the controlling government agency for the strategic reserve.[19]

The facilities are:

Mangalore, State of Karnataka. Capacity of 10.995 million barrels (1,748,100 m3).
Padur village, Udupi in the state of Karnataka. Capacity of 18.7 million barrels (2,970,000 m3).[20]
Visakhapatnam, State of Andhra Pradesh. Capacity of 1.33 million tonnes.[21]

On 21 December 2011, it was announced that India planned to greatly augment their crude reserve capacity to 132 million barrels by 2020, a senior oil ministry official stated.[22]

wiki...not sure how the planned augmentation is going

The Gain wont be much in terms of reserves those are very short term gain but the major gain would be in long term contract/future trading for Oil.

When Oil was like $80 WTI per barrel some weeks back Saudi had signed future deliveries for $90 so if Oil falls to says $70 you can expect future oil contract would fall too by $5-10 barrel

[vishvak]

Between 2007-2009, crude went up 130 and fell to 40. So probably crude is profitable for certain countries even at 40. But since 2009, prices have stayed above 75 consistently. link. Point is if Russians are going to sell oil anyway (to Chinese for example) why not buy some and add to reserves.

[Austin]

Between 2007-2009, crude went up 130 and fell to 40. So probably crude is profitable for certain countries even at 40. But since 2009, prices have stayed above 75 consistently. link. Point is if Russians are going to sell oil anyway (to Chinese for example) why not buy some and add to reserves.

Probably because we import mostly the WTI brand which is crude of Gulf , The Russians export the Ural Blend which has lower sulphur content compared to the Gulf blend and its expensive trades a $ 1.5 less than Brent price.

You need different refineries to process these two different blend

But we would see some energy deals with Russia soon there are talks of extending the Pipeline from China to india and giving Indian companies access to Arctic reserves

[Shreeman]

Between 2007-2009, crude went up 130 and fell to 40. So probably crude is profitable for certain countries even at 40. But since 2009, prices have stayed above 75 consistently. link. Point is if Russians are going to sell oil anyway (to Chinese for example) why not buy some and add to reserves.

Probably because we import mostly the WTI brand which is crude of Gulf , The Russians export the Ural Blend which has lower sulphur content compared to the Gulf blend and its expensive trades a $ 1.5 less than Brent price.

You need different refineries to process these two different blend

But we would see some energy deals with Russia soon there are talks of extending the Pipeline from China to india and giving Indian companies access to Arctic reserves

The oil price issue is a long term game. Noit the once in a generation investment it used to be, but long term by todays standards. Low prices are here, use them to subsidise investment in alternate forms of energy for the future.

This is true for US, India, or China. And India may be best situated to benefit as the others have long term ongoing plans for fossil fuel exploitation.

[Austin]

The oil price issue is a long term game. Noit the once in a generation investment it used to be, but long term by todays standards. Low prices are here, use them to subsidise investment in alternate forms of energy for the future.

This is true for US, India, or China. And India may be best situated to benefit as the others have long term ongoing plans for fossil fuel exploitation.

Oil Prices are currently low but 6 months down the line it may rise as well , For eg the average price of Brent this year is around $98-99 for 2014 even though Brent currently trades at $70

So to consider the price to be low we need average price for the year.

To consider any alternate energy source realistically they are like small percentage of energy supply today may be like 1 % or even less.

Most of the big companies in Oil Business really wont let these alternate energy to prosper to the extent where it threatens fossil fuel business......any possible innovation considered radical would be just killed by them .....I mean we are talking big names like Exxon , Cheveron , BP , Aramco , Rosneft etc

[Austin]

New National Defence Management Center for Russia to track global events

Pictures http://icdn.lenta.ru/images/2014/11/29/ ... 4a6e07.jpg
http://icdn.lenta.ru/images/2014/11/29/ ... aa06f8.jpg
http://icdn.lenta.ru/images/2014/11/29/ ... 5537e2.png

Article http://lenta.ru/articles/2014/11/29/ntsuo/

[KrishnaK]

Most of the big companies in Oil Business really wont let these alternate energy to prosper to the extent where it threatens fossil fuel business......any possible innovation considered radical would be just killed by them .....I mean we are talking big names like Exxon , Cheveron , BP , Aramco , Rosneft etc

Yes yes, which is why use of alternative sources of energy is growing by the day. I mean they are well on their way to killing of electric vehicles for starters.

[Tuvaluan]

Austin:"Most of the big companies in Oil Business really wont let these alternate energy to prosper to the extent where it threatens fossil fuel business.."

It maybe less of a conspiracy than the fact that building infrastructure to support new forms of energy is expensive and a risky enterprise that few except for the likes of elon musk are willing to take. The Tesla series car for all its popularity can only come into use widely if charging stations exist all over the country like there are petrol stations today.

[Shreeman]

Austin, et al:

Oil wont rise in winter ( anbd its a cold winter!) because of seeriya and eeukraine. All those floating warehouses are providing the glut, add to that the OPEC vs shale agenda.

There is no hope for a summer rise because demand drops. And Russia budgetary issues are not a monthly strategy but multi-year.

So nothing points to markjet manipulation forces that traditionally raise prices in thge near term. A few years is eternity these days. A substitution of X% coal/oil to cleaner no import cost sources could go a long way towards balancing a budget. Not to mention good health side effects.

Tuvulan: 300 miles on a charge already is usable for commutes. energy densities continue to rise. 600 miles will kill gasoline/petrol cars.

[RSoami]

http://www.bloomberg.com/news/2014-11-3 ... eighs.html

Oil prices will hurt Russia. Although they will help India.
I wonder if this trick will force Russia to bring down some curtains on open door economic policy. Its attempted push towards political integration has failed.
Will Russia take steps back from economic integration too ?!

[JE Menon]

I doubt it. The Russians of today are no longer "communists" or even "socialists". They have seen the fruits of capitalism, and they have seen what India, China and others have done with carefully stewarded state control which is gradually then eased off into private hands. No, Russia today will play the standard game and will not foreclose options through ideological rigidity. And that is a completely different beast from the Soviets of yesteryear. Such an approach by Moscow can only be good for itself, and for the world. It simply diversifies everybody's strategic options and makes those who wish to limit others options think twice. Russia can function much more easily in a relativistic and fluid strategic environment than in bipolar or structured multipolar ones. This is already evident.

[James B]

Putin getting squeezed with both crude & gold prices slashing. Sanctions are only making things worst for Russia. Seems US has cornered him thoroughly, no wonder he is sending overtures to Pakistan.

[RSoami]

Putin getting squeezed with both crude & gold prices slashing. Sanctions are only making things worst for Russia. Seems US has cornered him thoroughly, no wonder he is sending overtures to Pakistan.

Pakistan with its rock solid economy is going to bail out Putin ?!

[RSoami]

I doubt it. The Russians of today are no longer "communists" or even "socialists". They have seen the fruits of capitalism, and they have seen what India, China and others have done with carefully stewarded state control which is gradually then eased off into private hands. No, Russia today will play the standard game and will not foreclose options through ideological rigidity.

I didnt mean it in an ideological sense. Not that Russia will increase its control over the economy. Only that it will try to insulate itself from manipulations by the west.
What are sanctions? They are the levers that west is using to hurt Russia economically. Russia is doing the same thing by banning products from EU. The whole thing is against the free trade concept of WTO. Nevertheless both sides are continuing, trying to hurt the other.
So, Russia even when continuing to stay capitalist may put up barriers to protect its economy. As a resource rich nation, it may pull it off. Putin might try it rather than living with the western albatross around his neck forever.

[Cosmo_R]

Every time Russia has a problem, the oil prices are gonna crash. India must create a strategic reserve. If the govts play smart, they can stock up on petroleum and save billions.

It does not affect the budget as Rouble has devalued according to Oil Price , So Export becomes more competitive and import becomes expensive

Read this to understand how budget works Oil prices of 70$ per barrel not to have adverse impact on Russian budget - Ulyukayev

It does affect the budget. Russia imports huge amounts of food and consumer goods. Consumers start tightening belts, economic activity slows, tax receipts fall. On the corporate/government side, the debt service cost of foreign currency loans increases—punching holes in the budget.

Devaluation is not a free lunch

[ramana]

http://www.bloomberg.com/news/2014-11-3 ... eighs.html

Oil prices will hurt Russia. Although they will help India.
I wonder if this trick will force Russia to bring down some curtains on open door economic policy. Its attempted push towards political integration has failed.
Will Russia take steps back from economic integration too ?!

One wise persons said the Russian took on the cloak of Communism to move from Feudal to Modern age super quick.

Having arrived they discarded the cloak.

[Austin]

Cosmo_R budget is different from import export or trade surplus , budget is in small surplus this year import hasfallen due to food import ban and food is imported from.alternate country

As russia is major exporting country devaluation would help n make product competive

inflation is risen to 9 % but thats managable jst few years back they were having 16 % inflation

its like devaluating your currency without having to face G20 pressure and rouble is full free floating and capital accont convertable

[Cosmo_R]

Cosmo_R budget is different from import export or trade surplus , budget is in small surplus this year import hasfallen due to food import ban and food is imported from.alternate country

As russia is major exporting country devaluation would help n make product competive

inflation is risen to 9 % but thats managable jst few years back they were having 16 % inflation

its like devaluating your currency without having to face G20 pressure and rouble is full free floating and capital accont convertable

Austin, look very carefully at what I have said. Budgets are very much part of of any petro-state's financial calculations. Venezuela's budget is dependent for 65% of revenues from oil. THey are going to crater as oil prices fall.

Russia in not a major exporting country for anything other than commodities (oil and metals) and arms to India.

India's budget deficit is directly tied to imports. We subsidize energy and certain food items, We run a huge deficit

The Russians cannot overcome economics.

[Austin]

Did you get what i said , whn.oil was USD 110 rouble was 32 now oil is 70 and rouble is 51 so budget is not impacted as ruble became 30% weaker as oil became 30 % lower and budget is in rouble not in dollar

Thats the natural equilibrim built for a full free floating currency

infact this year they hve small budget surplus , oil price lower hits investement of all oil companies it may or may not hit the budget if currency is artifically pegged at fixed rate or free floating versus dollar