Global Crisis Hurts Russia

[Qdos]

Protests against Putin sweep Russia as factories go broke...

I've heard some claims about Russia weathering the global financial recession better than some other nations; however there's growing evidence this was merely an illusion created by the lesser ratio of business lending, against capital assets, inside the country and that the hammer is still falling on Russian businesses on a devastating scale.

I have personal friends who work at Kamaz in Naberezhnye Chelny that were laid off without notice and without pay several months ago, and are still out of work - and they have told me they're amongst many workers facing the same workplace sanctions.

Ironically Putin himself visited the same Kamaz plant in January this year, assuring the workforce that they had nothing to worry about and their jobs were as safe as houses...

From Vladivostok to St Petersburg, Russians are taking to the streets in anger over job losses, unpaid wages and controls on imported cars...

Protests against Putin sweep Russia as factories go broke | World news | The Observer

Russian prime minister, Vladimir Putin, is facing the most sustained and serious grassroots protests against his leadership for almost a decade, with demonstrations that began in the far east now spreading rapidly across provincial Russia...

The Russian press seems strangely devoid of the claims which are being put into print by foreign journalists; well it would be stranger still if the press were not majorly controlled by the state that is.

Oddly enough the press themselves are also affected, with workers for one oligarch, Alexander Lebedev (yes, the same man who bought the London Evening Standard for the princely sum of £1 a few months ago) claiming the billionaire has thrown many of them out on the streets without severance pay, or even salary arrears he owes them.

Evening Standard owner Alexander Lebedev sued over unpaid wages by Russian journalists | Media | guardian.co.uk

A group of Russian journalists who are taking legal action against the London Evening Standard owner, Alexander Lebedev, for failing to pay their wages, have accused him of "behaving like a bandit" and a "1990s oligarch".

The staff claim that Lebedev "threw them on the street" in March when he froze plans to launch a Russian edition of the British magazine Dazed & Confused. They allege that the billionaire is refusing to pay them their last month's salary, for February – or give them compensation.

[Carbo]

Luke Harding, the man who wrote the Observer article, is absolutely rubbish.

I could do a better job, which is saying something.

That latest article is indicative of all that is bad about his work: nebulous prose; tired cliches; subjective reporting; wooly logic; flacid, monotonous conclusions; over-sensationalization that misleads*; and general content which seems little more than an aggregate of articles already written by the usual anti-Putin op-ed suspects, punctuated by the occasional rent-a-quote.

He’s hopeless.

Meantime, whatever Harding wants to hype, Russia has seen fewer protests and has maintained greater political stability than any other country in Europe during this time. The protests are tiny compared to those in Britain, France, Italy and Spain – and don’t even bear comparison to the Baltics. That’s the real story, but of course Harding, instead of hunting out something original and honest, has already made up his mind, and so uses his column space to regurgitate the views of anti-Russia polemicists like Ed Lucas, Anne Applebaum and Robert Amsterdam.

Pathetic.

*eg the headline and sub-header "Protests against Putin sweep Russia as factories go broke: From Vladivostok to St Petersburg, Russians are taking to the streets in anger over job losses, unpaid wages and controls on imported cars"

The Vladivostok car protests were months ago; "sweep" grossly exaggerates; The protests are not necessarily against Putin per se; etc.

[Kvartiraokhotnik]

Originally Posted by Carbo Luke Harding, the man who wrote the Observer article, is absolutely rubbish. I could do a better job, which is saying something. That latest article is indicative of all that is bad about his work: nebulous prose; tired cliches; subjective reporting; wooly logic; flacid, monotonous conclusions; over-sensationalization that misleads*; and general content which seems little more than an aggregate of articles already written by the usual anti-Putin op-ed suspects, punctuated by the occasional rent-a-quote. He’s hopeless. Meantime, whatever Harding wants to hype, Russia has seen fewer protests and has maintained greater political stability than any other country in Europe during this time. The protests are tiny compared to those in Britain, France, Italy and Spain – and don’t even bear comparison to the Baltics. That’s the real story, but of course Harding, instead of hunting out something original and honest, has already made up his mind, and so uses his column space to regurgitate the views of anti-Russia polemicists like Ed Lucas, Anne Applebaum and Robert Amsterdam. Pathetic. *eg the headline and sub-header "Protests against Putin sweep Russia as factories go broke: From Vladivostok to St Petersburg, Russians are taking to the streets in anger over job losses, unpaid wages and controls on imported cars" The Vladivostok car protests were months ago; "sweep" grossly exaggerates; The protests are not necessarily against Putin per se; etc.

Sometimes Carbo, though not very often, but sometimes....you are absolutely right.

[Qdos]

These idealistic denials do nothing to restore the jobs of those I know whose employment has been axed, nor repay the hundreds of thousands of workers that are not receiving their salaries on a timely (or indeed any) basis at the present time.

Russia's problems stem from the fact it's diversity in manufacturing is wholly insufficient, forcing the petrodollar to prop up the entire economy, and whilst a demand for oil and gas are assured industry isn't requiring as much and the oil price is still far lower than the Kremlin would like. This isn't conjecture, it's simply the truth.

Russia finds itself mired in recession

With GDP shrinking by almost 10 percent in the first quarter this year, Russia is in deep recession.

Not since Putin came to power have high inflation and shrinking GDP caused such a fall in real incomes.

The risk for the Kremlin is not that it will lose control or collapse into internecine fighting -- Putin's grip is too firm. Nor is it that Russia will go bust, as the Soviet Union almost did in the late 1980s and Boris Yeltsin's Russia did in 1998. Foreign reserves of $380 billion mean there is enough money to pull through. But without legal, political and economic reform, Russia could well lapse into stagnation. It has squandered one oil-price boom. The price of doing nothing again would be to condemn Russia to the vagaries of the oil market. Putin and Medvedev must not make the same mistake twice.

[Russian Lad]

I've heard some claims about Russia weathering the global financial recession better than some other nations; however there's growing evidence this was merely an illusion created by the lesser ratio of business lending, against capital assets, inside the country and that the hammer is still falling on Russian businesses on a devastating scale.

I absolutely agree with Qdos. There are no protests on a large scale only because of the Russian mentality - the Russians start protesting only when they run out of food, verbatim. And besides, the Kremlin brainwashing machine has really subjugated the mind of your average Ivan - with pseudopatriotic bullshit and religion.

[Carbo]

Originally Posted by Qdos These idealistic denials do nothing to restore the jobs of those I know whose employment has been axed, nor repay the hundreds of thousands of workers that are not receiving their salaries on a timely (or indeed any) basis at the present time. Russia's problems stem from the fact it's diversity in manufacturing is wholly insufficient, forcing the petrodollar to prop up the entire economy, and whilst a demand for oil and gas are assured industry isn't requiring as much and the oil price is still far lower than the Kremlin would like. This isn't conjecture, it's simply the truth.

That's very simplistic, and I don't think that a diverse economy is really the root of the problem.

Obviously plummeting natural resource prices have played a big role -- bigger than if there was diversity -- but then look at GDP figures for countries with diverse economies and large manufacturing sectors. Japan, Germany, South Korea et al.

They're just as bad.

And I saw nobody giving idealistic denials. Just a few people criticising Harding and pointing to the fact that while Russia has been hard hit, there have been few protests compared to the rest of Europe.

[fenrir]

Originally Posted by Carbo Meantime, whatever Harding wants to hype, Russia has seen fewer protests and has maintained greater political stability than any other country in Europe during this time. The protests are tiny compared to those in Britain, France, Italy and Spain – and don’t even bear comparison to the Baltics. The Vladivostok car protests were months ago; "sweep" grossly exaggerates;

You sure about that? Latvia had pretty bad protests but things have been calm here in Estonia. In fact, the local expat community is frustrated with the locals because they DON'T protest against the foolishness of the current government and let each poor decision made by them slide.

[Russian Lad]

That's very simplistic, and I don't think that a diverse economy is really the root of the problem.

I would say that the root of the problem is the globalization, the Friedmanish doggy style capitalism, the current political regime aimed at stealing and dealing much more than at creating AND the lack of diversity in the economy.

[Qdos]

Originally Posted by Carbo Look at GDP figures for countries with diverse economies and large manufacturing sectors. Japan, Germany, South Korea et al. They're just as bad.

Nobody implied or said Russia was alone in this matter, but neither myself or those people I know who're suffering as a direct result happen to be bankers or economists - and nor do we necessarily believe either of the foregoing as we all know some predictions have been very inaccurate.

Good journalists, bad journalists, aside - I can find many more stories printed outside Russia pointing to the present dismal financial outlook in the 'here and now' sense inside the Russian economy than I can find contrary articles which are credible in the Russian press.

I will believe an improvement has occured when those I know receive their salaries in full, on time, every month; and when others who have been laid off without benefits are once again an 'employable' commodity.

[Carbo]

Originally Posted by Qdos Nobody implied or said Russia was alone in this matter...

Eh? I didn't say you did.

You said that a non-diversified economy and a lack of manufacturing was at the root of the problem. I said that nations with diversified economies and manufacturing sectors were suffering just as much.

That's all.

No need to be combative.

[Wodin]

Originally Posted by Russian Lad I would say that the root of the problem is the globalization, the Friedmanish doggy style capitalism, the current political regime aimed at stealing and dealing much more than at creating AND the lack of diversity in the economy.

Yes you probably would say that, but would be completely wrong. Not that that would be the first time, so I imagine you must be used to it, but anyway.

Globalisation and Capitalism, the latter which, incidentally, was proven to be a more appealing, better, system than any other politico-economic system (if it hadn't been then the disenfranchised masses, the communists, the maoists, the folowers of Ghaddafi...would have multiplied and conquered the world.,..instead...), is what enabled places like India, China, Brazil, Korea, Thailand etc to start to escape from their legacy of poverty and approach the liberties and affluence of the West. With some luck, that same globalisation and capitalism will do the same for Africa one day too.

Speaking of Africa...well...we all remember those places like Angola, Namibia, Zimbabwe, Ethiopia....All got 'independence" and all acquired a Soviet dictatorship (sustained by the USSR and Cuba more often than not)...all have starving multitudes, weak agrairian economies and not terribly good lifestyles for their people. Says a lot for the success of the alternative politico-economic system doesn't it?

[Carbo]

Originally Posted by Wodin Yes you probably would say that, but would be completely wrong. Not that that would be the first time, so I imagine you must be used to it, but anyway. Globalisation and Capitalism, the latter which, incidentally, was proven to be a more appealing, better, system than any other politico-economic system (if it hadn't been then the disenfranchised masses, the communists, the maoists, the folowers of Ghaddafi...would have multiplied and conquered the world.,..instead...), is what enabled places like India, China, Brazil, Korea, Thailand etc to start to escape from their legacy of poverty and approach the liberties and affluence of the West. With some luck, that same globalisation and capitalism will do the same for Africa one day too. Speaking of Africa...well...we all remember those places like Angola, Namibia, Zimbabwe, Ethiopia....All got 'independence" and all acquired a Soviet dictatorship (sustained by the USSR and Cuba more often than not)...all have starving multitudes, weak agrairian economies and not terribly good lifestyles for their people. Says a lot for the success of the alternative politico-economic system doesn't it?

Zimbabwe is the best example in Africa.

But there are far better comparisons elsewhere. In fact, some places in the world you can get as close to a like for like comparison as it's possible to find.

[Qdos]

Originally Posted by Carbo No need to be combative.

* Throws Carbo a chill pill... *

Nobody is out to get you... except Kvarti perhaps...

[Russian Lad]

Globalisation and Capitalism, the latter which, incidentally, was proven to be a more appealing, better, system than any other politico-economic system (if it hadn't been then the disenfranchised masses, the communists, the maoists, the folowers of Ghaddafi...would have multiplied and conquered the world.,..instead...), is what enabled places like India, China, Brazil, Korea, Thailand etc to start to escape from their legacy of poverty and approach the liberties and affluence of the West. With some luck, that same globalisation and capitalism will do the same for Africa one day too.

Wodin, there are many types of capitalism, just like the term food implies many nourishing substances. I am not against capitalism per se, I am against its Friedmanish cut-throat variant. You have mentioned China - great - I like a lot in their economic model. They are communists, though, if I may remind you. But they have proven that one can merge systems creating synergy.

Yes you probably would say that, but would be completely wrong. Not that that would be the first time, so I imagine you must be used to it, but anyway.

Rhetorics and demagogy. Spare the keyboard.

[Wodin]

Originally Posted by Russian Lad Wodin, there are many types of capitalism, just like the term food implies many nourishing substances. I am not against capitalism per se, I am against its Friedmanish cut-throat variant. You have mentioned China - great - I like a lot in their economic model. They are communists, though, if I may remind you. But they have proven that one can merge systems creating synergy.

China? Communist? wow! Last I checked communism was all about the centralisation of ownership of the factors of production in the hands of the State and the equal distribution of the fruits of the factors of production to the populace. Well, that was Marx's thesis anyway. This is demonstrably not the case in China.

I would describe China as a dictatorship politically and a capitalist society economically. In fact, it's the antithesis of communism.