Finance minister warns Russia can't afford military spending plan

originally posted by: sosobad
Phew I thought I had missed your anti-Russian propaganda thread but here it is bang on time. There is 3 things certain in this life, death, taxes and Xcathdra posting an anti-Russian thread every 2-3 day's.

Back to the topic and he question -

What should Putin do?

a reply to: Xcathdra

Nothing out of the ordinary, I would say.

They can sure trim the expenses. This is good actually as this will push them to focus on what they really need.

A lot of military spending is inherently wasteful as it is intended to sustain military industrial complex.

Russia is a continental power and it must focus on weapons to fight on land and air. Russia can curtail expenses on the Navy. Shipyards can be sustained by export orders.

I am sure Russian leadership will deal with the situation.

I doubt it will make any difference in Ukraine.

The East Ukrainian are very clear they do not want to live under Kiev.

Nobody can force them, short of genocide by the West.

originally posted by: Xcathdra
Back to the topic and he question -

What should Putin do?

I want to thank you.

You made me join ATS, I've been reading off and on for 6 months and I thought you are some kind of local expert or intellectual on Russia-US matters, but your bias is a rather large blinking red fog light.

A lot of people are lazy to click join and go through the hassle of links in email and things like that. So on behalf of all those readers out there, I want you to know that your opinions are taken with iceberg size grain of salt.

Don't get me wrong you are welcome to post your opinions, just don't expect large majority to believe it. As a matter of fact you should be glad that is so, because if you managed to get majority on your side it would create an even bigger karmic impact, or rather Dark karmic impact in your multi-life evolution.

As for you constantly demanding what should Putin do. Here is your answer.

Putin should cut down 15 % on military, contrary to what you think, that he and Russia will somehow curl into corner and die.

15 % cut just will still leave plenty for upgrades and war preparations

There

Happy ?

So Putin do not have money to buy all the toys he wants. He has two options:

1 Borrow like crazy and waste a lot of money and become indebted for all times.
2 Be a reasonable spender and buy the most important things while using mutually assured destruction (MAD) as a tool to keep the west from doing the most insane things. Both China and Russia seem to be following this plan to some extent.

Since Putin is decoupling Russian economy from western influence US and EU will in the end not matter much for Russian growth and China, India and South America will be their trading partners.

This will of course give China a big leverage over Russia. China is playing the game like a champ slowly taking over and letting Russia and US/EU wear each other down and at the same time creating a schism in US to EU relations.

a reply to: Xcathdra

Dear Xcathdra,

I don't think I've seen such a clear case of thread derailment in a long time. You post a news article from Reuters, a couple of other links, and ask "If their economy has gotten into such bad shape, how should Putin fix things."

You received a couple of answers; print or borrow more money, cut the military, or cut the Navy. While these people tried, and I give them credit, still they only looked at "How can Putin afford an army big enough for his needs?"

Just about everybody else said "You're biased and uninformed for even raising that question," or "Your question is stupid, I'm going to ignore it and tell you why the US is terrible." (from the poster whose name contradicts his words)

I can't tell whether people just refuse to admit that Russia can do anything wrong, although they can find fault with every other country, or whether they're just getting a head of stem up so they can be completely obnoxious for the election season.

My opinion, pull back from foreign incursions for a couple of years (Obama isn't going to do anything against Russia), and play the withdrawal for all the publicity benefits and international trade concessions they can get. It's worked so far for Iran, why not Russia?

Then he has to do something about his domestic economy. He could use a few high level corruption trials, they would leave his closest friends alone, but get rid of some opponents. It would also give the citizens the idea that something was changing for the better. Then, as much as it goes against his beliefs, change the system to provide positive rewards for production, investment, and creativity which are commensurate with the effects on the economy.

Then offer to serve as a mediator in every dispute that will have them. Putin pulled a massive mistake in invading and conquering Crimea and Eastern Ukraine. It was illegal, treacherous, and made everybody a little less willing to deal with them. They certainly didn't win any friends in Europe. It's time for an image makeover.

Of course, if Hillary wins the election, he can go right back to grabbing land and threatening people.

a reply to: ExSmokerYes

Thanks for the reply and answering the question asked.

As for the rest of your post -

You seem to fall into the category where you think popularity trumps facts. I am not concerned if people don't like me, my posts, or my positions. What does matter is debating a topic intelligently and on topic, in order to burn away the bs and hopefully find the right answer somewhere in the middle.

I also appreciate you joining because you don't agree with me or m opinions / facts. This world would be boring as hell if we all thought the same. Unlike Russia, I prefer to have spirited debates / conversations.



People are quick to jump on the bandwagon on this topic where they feel only pro Russian conversations and articles should be posted while all others should be quiet and just accept their side.

I refuse to drop to drop down to Putin's level and totally reject the concept of a one sided conversation.


Again, welcome to the forums and thanks for taking the time to post your thoughts.



In other news = The leverage game begins as you suggested.
Russia offers India stakes in Siberian oilfields - sources

Russia Sanctions Compensation Bill Advances in Close Vote

Pain From Putin Sanctions Deepens as Ruble to Auction Suffer


Russia Faces Possible EU Tariffs on Aluminum Foil

There is a new article that I will find and post dealing with Putin and his refusal to accept the fact sanctions are having a severe impact on the Russian economy. The article discussed that top banks in Russia are now warning Putin there are issues. The Russian finance minister also made statements again to the media that the economic plan Putin put together is no longer feasible.

Russia will spend 30 billion by years end to prop up the ruble.
Oil is below $90 a barrel, which ripped into Russias income.
The IMF downgraded Russias economic outlook for 2015 down as well.

All because Putin wanted to show the west he's not an idiot.

well played Putin... well played..

/end sarcasm.

a reply to: Xcathdra

I can tell you exactly how it will play out. First, I have predicted in several posts in other threads that many people in Russia will feel uncomfortable, specially moneyed ones. Russia has built an economy in the last 20 years that looked Westwards. This economy relied on cooperation with Germany, France and Italy. So a setback to economy is natural and is NOT a news.

The events in Ukraine have been far beyond Russia's expectations (worse than worst case scenario). It is actually equal to a NATO war on Russia. The security considerations trump economic considerations. So yes, there will be economic pain in Russia.

Will it be a cakewalk for Ukraine? I very much doubt it.

That said, Russia will look eastwards now out of sheer necessity. Many people may doubt such strategy, and there are indeed risks. However these risks are far lower compared to shocks received from the West. The fact is Russia's strategy of integration with West has been a complete failure.

Russia's military can modernize with the budget (even if lowered) Russia has, Russia will change its strategy and go for joint production with China and India. It means that Russians will use equipment that will be partially built overseas (for example in China).

Russian shipyards can build ships for China and India. If a level of trust is there, these ships will ultimately protect Russian interests without loading Russia with the costs.

Here is the article I mentioned earlier.

Top Russian Officials Are Starting to Realize That the Country’s Economy Is in Big Trouble

MOSCOW—You wouldn’t know it from the Chanel boutiques and Maserati dealerships lining the boulevards inside Moscow’s Garden Ring, but economic conditions in Russia are becoming dire. The ruble has weakened to record lows not seen since the 1990s, capital is bleeding out of the country for the first time since the 2008 financial crisis, and the economy is projected to grow a piddling 0.5 percent this year.

You wouldn’t realize any of this from the statements of Russia’s president. At a forum last week, Vladimir Putin ensured investors that the country has enough reserves to implement all of its budget proposals, including an $80 billion increase in military spending next year. The president certainly seemed confident, telling investors that Russia’s “strategic course remains unchanged” and that he foresees “a country that is strong, flourishing, free, and open to the world.”

Putin’s optimism rests on some pretty big assumptions, including 1.2 percent growth next year—the World Bank thinks 0.3 percent is more realistic—and $100-a-barrel oil prices. Despite turmoil in the Middle East, the price fell below $90 last week. Russia relies on oil and gas revenues for about half of its budget.

click link for remainder of article.

There is nothing new or significant in this article.

Lets take items one by one:

OIL PRICE: Oil price goes up and down. If it is $90 today, that means nothing actually. An average price of $100 is a good assumption. If the assumption does not hold, Russia can always cut expenses OR print money, whatever is convenient.

CORRUPTION: Yes we agree that corruption in Russia is higher than normal. However this has always been the case. Corruption is a hard to control disease and it is unlikely to be controlled overnight.

WEAK ECONOMY: Russia's economy is based on oil and gas exports and military equipment exports. Russia imports consumer goods and a lot of engineering goods. The structure of the economy is such that it is not broad-based. Financial industry and computer software etc cannot do well in the current environment. The scope for civilian high tech industry is limited. This is the cause of stagnation and this was already visible before the Ukraine troubles.

However I argue that the situation prevailing in Russia is also visible in most of Europe. It is silly to single Russia out of this.

IMPACT OF SANCTIONS ON RUSSIA: OK there is capital flight. The capital flight cannot go on indefinitely as scared people take off with their money fast. So this will stabilize. The economy's performance will depend on the traditional factors which stay the same with or without sanctions.

The critical thing is availability of capital. Let us see what China does. I have a feeling China will replace IMF for Russia. The hesitation is on Russian side. If Russia decides to open up to China, the capital problem disappears.

Second is technology. Again the non-Western world can provide engineering goods to Russia. The Russians will have to look elsewhere.

The Western sanctions can affect Russia's military industries. The import of industrial machines and spares can become an issue. However this can be circumvented if other countries cooperate.

Russia does have friends.

I think the bleak predictions of Russia is just Western uneasiness about the ineffectiveness of sanctions.

The common Russian will actually welcome reduction in lifestyle of wealthy Russians. Good if their travel is curtailed.

More Russian tourists to India: "Despite slowdown, Goa expects maximum tourists from Russia." (news.oneindia.in...)

a reply to: GargIndia

It essentially all hinges on China. No other nation would consider backing Russia fully or at least no nation with any real power to change things. Unless they're secretly organizing all together. Germany is a wild card, but unlikely to leave the West.

It all hinges on China and more likely than not, China would rather go with America than Russia.

a reply to: tavi45

The China could go with America - sure; but would want something in return that America does not want to give. What China wants is supremacy is Asia. If USA can give that, it got a deal.

Like I said - Putin is all about Putin and doesnt care what countries he has to smash to keep it that way. Here is the mindset we have been pointing out that others have ignored -


Putin says ex-Soviet states must remember Moscow when getting closer to the West

MINSK, Belarus – Russian President Vladimir Putin says his country does not oppose ex-Soviet states seeking closer ties with Western countries, but has criticized them for not taking Moscow's interests into account.

Leaders from the 11-member Commonwealth of Independent States met Friday in the Belarusian capital, Minsk, to discuss closer ties. The president of Ukraine — which is facing the most violent conflict in post-Soviet history, between government troops and pro-Russian insurgents — did not attend.

Putin lashed out at the European Union for "not considering it necessary ... to discuss the risks" of political and economic integration with post-Soviet countries. Ukraine's decision to sign an association agreement with the EU in September provoked complaints from the Kremlin that it would hurt Russia's economy.

These countries do not answer to Putin. If Putin wants to develop the Russian economy then he needs to quit arresting those he doesn't like, throwing them in prison on trumped charges while handing out the business they just snagged to his inner circle.

The Soviet Economic system failed - miserably, yet Putin is running back towards it.

a reply to: Xcathdra

You talk as if you seem to dictate policy to ex-Soviet States.

These people are meeting means they want to hear each other.

What they do is their problem, not yours.

a reply to: Xcathdra

The Soviet Economic system failed - miserably, yet Putin is running back towards it.

The Soviet Economic system failed miserably? and how is that Grand Euporean Union Empire Project doing again? you almost sound as if you are a member of a foreign affairs organization.

These countries do not answer to Putin

Right sure if those countries dont answer to Russia whom they answer to then? America? Britain Germany? the few countries that already have closers ties with the west.

In those countries already there Economic systems are failing.

a reply to: GargIndia

not at all.. What I am stating, and you are missing, is Russia does not get to dictate to nations that used to be former SSR's. Its not the cold war and that mentality has no place in the real world.

Russia does not care about the countries it demands respect Russian interests.

Ukraine signs an agreement with the EU which will help its economy. Russia is trying to derail that because it would pull business from Russia because their economy is not based on supply and demand.

Russian wants to derail Ukraine's economy in order to protect its own. Its a 2 way road, something Putin does not seem to understand or comprehend.

What's Ironic is the Pro Russia supporters completely missed / ignored Putin's lie in the article I linked about former SSR's.

a reply to: Xcathdra

You are not getting the point. Your mind is shut.

They are meeting and talking. What does that mean?

Putin is not talking to you. Putin has a viewpoint and he is talking to people (States) that are listening to him.

You are not in this picture.

Every country talks about its interests. There is nothing strange about it.

The problem with Ukraine is NOT its desire for economic progress BUT its anti-Russia stance. That is the cause of war.

a reply to: Xcathdra

Read the following:

"Putin: Russia to buy $15 billion in Ukraine bonds."

www.usatoday.com...

This news is dated December 17, 2013. Putin also gave preferential gas pricing to Ukraine last year. That does not look like intention to destroy Ukraine's economy.

The events of 2014 in the Maidan came all of a sudden. This is a good question how that happened. Of course Russia failed in detecting the sources of trouble well in advance. But now after all that has happened, Russia has to worry about itself. Ukraine has taken an adversarial stance with Russia with a change of government, and just like any other State, Russia has to worry about its own security.