Another Big Win For Putin!!!

88m3

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Russia Braces for Longest Recession in Decades With $50 Oil
by Olga Tanas
July 22, 2015 — 2:50 AM EDTUpdated on July 22, 2015 — 11:23 AM EDT

Workers fit the body shell of a GAZelle Next vehicle onto a chassi on the production line at the Gaz auto plant, operated by Gaz Group, in Nizhny Novgorod, Russia, on Tuesday, June 16, 2015.




For an economy that lives and dies by crude prices, the latest downturn in the world oil market means Russia’s recession may stretch into next year for the longest slump in two decades.

Russia’s first economic slump since 2009 looked like it would plateau as oil gained 40 percent from a six-month low in January. Crude’s recovery has faltered in recent weeks, raising questions about government assurances that the economy will return to growth in 2016 and further squeezing a budget already on course for its widest deficit in five years.

Oil jitters will test the optimism of President Vladimir Putin, who’s declared that Russia had put the worst of the economic crisis behind it, and heap pressure on his regime before early parliamentary elections in September next year. Russia, which ING Bank NV estimates needs oil at $80 a barrel to balance its budget, will endure a two-year economic contraction if crude prices remain at $60 through 2016, according to the central bank.


“Russia will face a recession or stagnation next year” if oil is near $50, Dmitry Polevoy, a Moscow-based economist at ING, said by e-mail. “It will likely be necessary to cut spending more, to postpone a part of military spending and to use what remains in the Reserve Fund.”

Ruble, Sanctions
Reeling from a currency collapse last year and sanctions over Ukraine, the government has already cut budget outlays by 10 percent and dipped into one of its sovereign wealth funds, the Reserve Fund, to help cover the shortfall. Lower oil prices mean that Russia may potentially need financing from its other wealth fund, the National Wellbeing Fund, according to Polevoy.

The most severe stress test conducted by the central bank, which assumed oil at $40 and an economic slump of 7 percent, found that 187 lenders may face a capital shortage of 0.6 trillion rubles ($11 billion) while the share of non-performing loans more than doubles to 17.7 percent. The economy will contract for a third year in 2017 if oil remains at $40, the central bank said in June.

The government predicts economic growth at 2.3 percent in 2016 after improving this year’s forecast to a 2.8 percent drop from a previously projected decline of 3 percent. Growth averaged 7 percent during Putin’s first two terms as president in 2000-2008.


Why Russian Business Likes Sanctions
Exacerbate, Prolong
“Another oil price shock may exacerbate the recession and/or prolong it,” Tatiana Orlova, the chief Russia economist for Royal Bank of Scotland Group Plc in London, said in a report last week. “Although we currently expect the economy to post very modest growth of 0.5 percent in 2016, we think the economy may remain in recession throughout next year if the average Brent oil price remains below $60.”

report published on Monday by OAO Sberbank, the country’s biggest bank.

“An exit from the recession is postponed until 2017,” Sberbank analysts led by Julia Tsepliaeva said in the report.

Read this next:
Russia Braces for Longest Recession in Decades With $50 Oil
 

CHL

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I'm on my phone, someone post the story that Putin wants the former Italian pm to be his economic minister :dead:
 

88m3

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Russia may have to scrap its plans to build a fifth-generation stealth bomber

  • Jul. 23, 2015, 12:22 PM
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rtrkr9z.jpg
Viktor Korotayev/REUTERSTupolev TU-160 strategic bomber performs during the first day of the MAKS-2005 international air show in Zhukovsky outside Moscow August 16, 2005.

Russia's new fifth-generation bomber project has been put on the back burner and the plane won't enter production for nearly a decade, Zachary Keck reports for the National Interest citing Russian officials.

The Kremlin planned on introducing its fifth-generation PAK DA bomber into service starting in 2023. However, the PAK DA project has been pushed back and Russia will instead focus on production of an updated version of the Soviet-era Tu-160 supersonic nuclear bomber.

“According to the plans, serial production of the [Tu-160] aircraft new version [the Tu-160M2] is to be implemented starting from 2023,” Russian Deputy Defense Minister Yuri Borisov said at a press conference on July 17. "The PAK DA project will be somewhat shifted beyond [2023], otherwise there is no sense in it."

According to Russia Beyond the Headlines, the decision to begin constructing the updated Tu-160M2 at the expense of the fifth-generation PAK DA was made by Russian President Vladimir Putin in May.

"[Putin] and the Russian defense minister have taken a decision on reviving production of the Tu-160M aircraft," Commander-in-Chief of the Russian Air Force, General Viktor Bondarev said in May.

This decision to stall the development of the PAK DA and instead focus on the modernization of the Tu-160 reflects the broader difficulties that the Kremlin is facing in modernizing the country's military. Economic sanctions stemming from Russia's aggressive policies in Ukraine and a plunge in oil prices have undercut the Russian economy, leading to defense procurement problems across the military as a whole.

"The objective reasons for the failure to meet state defense procurement orders include restrictions on the supply of imported parts and materials in connection with sanctions, discontinuation of production and the loss of an array of technologies, insufficient production facilities," Borisov said on July 17 according to The Moscow Times.

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RIA Novosti/REUTERSA Tupolev Tu-160 Blackjack strategic bomber flies over the Red Square during the Victory Day parade in Moscow, Russia, May 9, 2015.



According to the National Interest, this decision to modernize the Tu-160 in conjunction with Russia's economic distress could ultimately lead to the complete abandonment of the PAK DA. The improvements that the new TU-160M2 will feature include many designs that were intended for the PAK DA, and the modernized aircraft is "also expected to have a service life of around 40 years."

Among the upgrades for the TU-160M2 are a newly modernized engine that will increase the plane's flight range by over 600 miles, along with several new missiles that will enhance the plane's combat capabilities, IHS Jane's 360 notes.

"This will be essentially a new airplane, not a Tu-160 but a Tu-160M2," Borisov said in early June. "According to the plans, this will most likely happen sometime after 2023."

ap413697370516.jpg
Ivan Sekretarev/APNew Russian Armata tank is driven during the Victory Parade marking the 70th anniversary of the defeat of the Nazis in World War II, in Red Square, Moscow, Russia, Saturday, May 9, 2015.

This isn't the only recent instance of Russia having to scale back on its military modernization ambitions. The Kremlin is also having problems financing its hulking third-generation Armata tank. Harvard scholar Dmitry Gorenburg estimates that Russia will only be able to field a maximum of 330 Armata tanks by 2020, a fraction of the 2,300 originally planned.

The Kremlin's failure to follow through on projections for high-end weaponry is a common theme. There's a pattern of Russia announcing colossal projects before drastically scaling back its plans. In March, for example, Kremlin media outfit RT announced that Russia would eventually be able to deploy 80 massive PAK TA transport superplanes — even though Russia not having constructed a single prototype of the aircraft.

In scaling back the Armata and these two advanced aircraft, the Kremlin clearly realizes that it is significantly easier and more cost efficient to continue to modify existing systems for future use — even if that isn't as exciting from a propaganda standpoint.

SEE ALSO: Russia's huge military upgrade hit another snag — and Putin is not happy


Read more: Russia may have to scrap its plans to build a fifth-generation stealth bomber
 

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Crimea Is Now Putin's Problem Child
Russian security services are cracking down on alleged corruption in the newly annexed peninsula
by Carol Matlack
July 24, 2015 — 12:01 AM EDT

Russian President Vladimir Putin attends a meeting of the Russian Geographical Society’s Board of Trustees on April 27, 2015, in St. Petersburg.




President Vladimir Putin likened Russia’s 2014 annexation of Crimea to a family welcoming home a long-lost relative.

Now the family is showing signs of strain. Russia’s federal security service, the FSB, has opened criminal investigations of three high-ranking Crimean government officials, accusing them of graft and other misdeeds. Four regional cabinet ministers have been forced from office in the past few months over allegations of corruption. And Kremlin auditors reported in June that two-thirds of the money Moscow sent Crimea last year for road building couldn’t be accounted for.

Crimean Governor Sergey Aksyonov, elected in April 2014 with Putin’s blessing, has reacted angrily to the allegations. Addressing Crimean cabinet ministers on July 7, he accused Moscow of trying to “destabilize” Crimea and using “fabricated” evidence against those under investigation, who include the region’s industrial policy minister, its chief tax inspector, and the director of the port of Yalta. “No one will make victims of our officials,” Aksyonov said.


forced nationalization, enacting legislation last year that gave it broad powers to seize companies, real estate, and other private property. In some cases, hooded gunmen ejected people from their land and businesses. Russian citizens were among those whose property was taken; the country’s courts are now flooded with complaints by people seeking redress. The Crimean government said that forced property seizures ended in March, but by then investors had fled the region and its economy was in shambles.

That leaves Moscow on the hook. It’s already paying 75 percent of the Crimean government’s budget, while subsidizing pensions and other benefits for local residents. And the graft allegations raise questions about how the Kremlin can keep tabs on the $18 billion in aid it’s promised Crimea over the next five years. The money is supposed to be used for economic development and infrastructure, including construction of a bridge from the peninsula to the Russian mainland.

struggle for control of “the main valves of corruption” in Crimea, says Andrew Foxall, director of the Russia Studies Centre at the Henry Jackson Society in London. “This same kind of thing happens in every Russian region.” Moscow tolerates some corruption among regional leaders, Foxall says, but expects them to share the spoils with Kremlin-backed interests. Those who don’t may be subjected to criminal investigation and arrest.

Crimea’s location on the Black Sea positions it to become “one of the main entry points for the shadow economy,” including smuggling of firearms and cigarettes, Foxall says. The FSB’s investigation of the Yalta port chief could reflect a fight for control of that facility, he says.

Accusations of rampant corruption could also give Moscow an excuse to scale back some of the $18 billion in promised aid. Keeping that pledge won’t be easy, with the economy in recession and the ruble’s value down almost 50 percent against the U.S. dollar since Crimea’s annexation. The Kremlin has failed to deliver promised aid to other regions, such as Russia’s Far East, which got only a small fraction of the more than $23 billion it was supposed to receive from 2007 through 2013.

For now, Aksyonov and his allies are talking tough. “We did not reunite with Russia to be subjected to the same horrors we had experienced” when Crimea belonged to Ukraine, regional lawmaker Sergei Shuvaynik said recently in a speech to the Crimean parliament. But in the end, Crimean officials will have to bow to the Kremlin or lose their jobs, Foxall says. “These are the rules of the game Crimea signed up for” when it voted for annexation. “It’s only now realizing this.”



No Banks, No Burgers: Life in a Russian Crimea
(Updates previous version to clarify that Kremlin auditors could not account for two-thirds of money sent to Crimea for road building.)
 

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The creeping Russian border in Georgia
Moscow-backed security forces recently moved the border fence with Georgia, taking more territory for Russian control.

27 Jul 2015 07:21 GMT | Politics, War & Conflict, Russia, Georgia


  • ABOUT THE AUTHOR
    Luke Coffey
    Luke Coffey is a research fellow specialising in transatlantic and Eurasian security at a Washington DC based think tank. He previously served as a special adviser to the British defence secretary and was a commissioned officer in the United States army.

    @lukedcoffey

    While the world has been focused on the eurozone crisis in Greece, the nuclear talks in Vienna, and Russia's continued aggression in eastern Ukraine, things have been heating up in Georgia.

    On July 16, Moscow-backed security forces moved the administrative boundary fence dividing the Russian occupied region of South Ossetia and the rest of Georgia - thereby placing more Georgian territory under Russian control.

    These same security forces, armed with assault rifles, were also seen crossing into Georgian-controlled territory and tearing down a Georgian flag.

    A history of conflict


    After a brief war between the two countries in August 2008, Russia occupied the Georgian regions of South Ossetia and Abkhazia. At one point, Russian forces bombed Tbilisi's civilian airport and advanced within miles of the capital city.

    Up until 2008, Russia recognised both regions to be part of Georgia's territorial integrity. Most of the international community still does.

    Soon after the war - and with Moscow's backing - Abkhazia and South Ossetia declared independence from Georgia. Only Russia, Nicaragua, Nauru, and Venezuela recognise their independence today.

    665003303001_3944848607001_vs-54900ebbe4b0b414dede2f3c-1083021587001.jpg

    People & Power - Georgia: Corridor of power


    In reality, both regions have puppet governments which depend wholly on Moscow for their economic survival and are currently occupied by thousands of Russian troops.

    The 2008 war ended after then-French President Nicolas Sarkozy brokered a five-point peace plan.

    Almost seven years later, Russia is still in violation of this peace deal because it refuses to allow international observers into South Ossetia and Abkhazia, while Georgia gives these observers unfettered access. Russia has also refused to move its troops to pre-war locations, which Georgia has already done.

    A rural Berlin Wall

    This most recent border creep is particularly alarming because Russia is in a position to directly threaten important transport links between Georgia and the outside world.

    Russia's actions now place the administrative boundary fence within 500m of Georgia's E60 highway, which is the main road linking the Black Sea to Azerbaijan.

    The new fence also places a 1.6km segment of the BP-operated Baku-Supsa pipeline inside Russian occupied territory.

    Moscow has long sought to control the flow of oil and gas from the Caspian region to Europe and has never liked pipelines bypassing Russian territory.

    RELATED: Georgians guide Ukraine's reforms path away from Russia

    As far as Putin is concerned: If Europe isn't getting its oil and gas from Russia then they shouldn't be getting it at all.

    Russia's border creep is nothing new. Since the 2008 war, Russia has slowly been advancing further and further into Georgian territory by constructing fences and other barriers.

    In some cases villages are cut in half by fences. Locals have even gone to bed in Georgia, and after Russians installed a fence overnight, have woken up in occupied South Ossetia. This is a rural Berlin Wall.

    Russia's imperialism

    True to form, Russia acted when the West was distracted.

    It is no coincidence that Moscow decided to move the administrative boundary in the same week that the Iranian nuclear talks were reaching their pinnacle, or the same week that the EU was dealing with the fallout from the recent Greek referendum.

    As far as Putin is concerned: If Europe isn't getting its oil and gas from Russia then they shouldn't be getting it at all.



    Russia uses its occupation of South Ossetia and Abkhazia (amounting to 20 percent of Georgia's internationally recognised territory) as a way to exert its influence in the region.

    The 2008 war, and the subsequent Russian occupation, has displaced hundreds of thousands of people; not to mention the existential threat to the country posed by the thousands of Russian troops based on Georgian soil.

    Even under immense Russian pressure, Georgia has remained committed to its westward orientation.

    Regarding the occupied territories, Georgia has made a non-use of force pledge to get them back. Tbilisi knows that there can only be a peaceful end to the Russian occupation. It is a shame Moscow does not see it the same way.

    Keep an eye on Georgia

    Georgia is an island of democracy and stability in a very rough region. It is firmly committed to Euro-Atlantic integration which is something Moscow simply despises.

    Instead of letting the Georgian people choose their own destiny, Russia wants them to be under its sphere of influence.

    Anything Moscow does in the region is seen through the lens of Russia's recent annexation and invasion of Crimea.

    Georgians are nervous - and rightfully so. Under Russian President Vladimir Putin's leadership, Russia is a 21stcentury country with 18th century ambitions. There is no denying that Georgia is on Putin's imperial "to-do" list.

    RELATED: Russia's next acquisition

    The journey from the capital Tbilisi to the line of occupation only takes a couple of hours by car. Once there, one can see the divide between free Georgia and oppressed Georgia.

    Russian military bases are being built. Russian flags fly high at checkpoints. Families are divided. Local economies wrecked. Livelihoods destroyed. All in the name of Putin's imperialism.

    As the world heads into the sleepy days of August, we must wisely keep an eye on this region.


  • The creeping Russian border in Georgia
 

88m3

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Putin fired more than 100,000 people

  • Jul. 27, 2015, 8:44 AM
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rtr4wygb.jpg
Reuteres/Ivan Sekretarev/Pool
See Also

Expert: Putin's inner circle is increasingly military-minded

Here's how Vladimir Putin consumes and controls the news

Obama Announces More Sanctions On Russian 'Cronies' — And This Time They're For Real


Vladimir Putin has fired 110,000 people.

The Russian president signed a decree two weeks ago that reduced the number of full-time employees in the interior ministry of Russia by about 10% — or 110,000 people.

Most of the cuts will be to administrative staff. It will bring the total number of employees in the agency down to just above 1 million, according to CNN Money.

The interior ministry is in charge of the Russian police, paramilitary security forces, and road-traffic safety.

The interior ministry's press service also told RIA Novosti that these reduction plans would affect the management structure at the regional level and higher, according to Lenta.Ru.

"The number of departments at the district level will remain unchanged — that is, precisely those who work directly 'on the ground' and interact directly with citizens," the press service said.

Back in March, Putin signed three new decrees that slashed government salaries — including his own and that of Prime Minister Dmitry Medvedev — by 10% starting May 1.

Russia's economy has been badly bruised over the past year amid tumbling oil prices and Western sanctions over the crisis in Ukraine. Russia's gross domestic product has shrunk by 2.2% in 2015.



Read more: Putin fired more than 100,000 people
 

CHL

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Is that real or nominal GDP that has shrunk by 2.2% in 2015? :wtf:
 
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