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Posts Tagged ‘sanctions’
October 21st, 2016

We Can Go Screw Ourselves

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Picture by svobodnoslovo.eu

Economic sanctions imposed by the West on Putin’s friends and their enterprises, as well as on the most sensitive sectors of the Russian economy—the oil and gas industries and the capital market—have been in effect for more than two years. These measures, however, have failed to restore Ukraine’s sovereignty over the Donbass and Crimea, or to make the Russian military admit its obvious guilt in the crash of the Malaysian Airlines plane. Russian citizens, intoxicated by Kremlin propaganda, do not seem to be interested in the reasons behind the lack of accessible credits, the rise in prices, and the freezing of pension savings, but continue to largely support the aggressive international policy of their presumptuous rulers. So what is the result of the renowned Western sanctions?

In two and a half years, Russia has lost a considerable amount of foreign investments that the country was supposed to receive, and was forced to suspend indefinitely the exploration of new oil and gas fields due to the ban on the import of technologies and equipment. Both factors will continue to have a negative effect on the revenues of the Russian budget. Putin’s economic advisers—the market-oriented Aleksei Kudrin and the anti-market Sergei Glaziyev — both evaluate Russia’s losses resulting from the annexation of Crimea and the introduction of sanctions at no less than $200 billion. According to other experts, the largest part of these losses amounting to $170 billion was caused by Western sanctions. >> Read more

August 24th, 2016

SHOALING CREEK OF FDI

Picture by loanscanada.ca

Picture by loanscanada.ca

According to the recent statistics provided by the Russian Federal Statistics Service, foreign direct investments (FDI) in Russia have dropped in the first half of 2016 by 4.3% APR. In fact, shallowing of the investment inflow has continued for more than two years. Hunger for superprofits sharks of capitalism perceive the expropriation of Yukos in the mid-2000s as an isolated case, which does not affect the overall investment climate in the country. They continued actively flirting with the Putin’s regime, and only economic sanctions, entered by the Western governments in 2014 in response to the annexation of Crimea and support of separatists in Donbass, have forced transnational corporations to slow down its expansion on the Russian market.

Russia’s overall investment climate quickly turned from positive to negative. Russia was among the top three recipients of FDI with a record US$94 billion in 2013. This precipitously fell to only US$21 billion in 2014 and US$4.8 billion in 2015.

In 2014 just 178 new foreign investment projects worth US$13 billion were launched, compared to 396 projects worth US$23bn in 2011. Russia’s second biggest European investor (after Cyprus), the Netherlands, decreased its investment from US$5.7bn to US$1.23bn in 2014. Even though weak currency usually attracts foreign investors, as ruble weakened, FDI kept collapsing.

Ernst & Young sees the following issues negatively influencing the investment climate: inconsistent and selective law enforcement, non-transparent decision-making procedures, and corruption.

Historically, the main industries for FDI inflows in Russia have been wholesale and retail trade, banking, manufacturing, and the mining sector (mostly extraction of oil and gas). Surprisingly >> Read more