Kremlin ‘considering stimulus plan for Russian economy’

No surprise that 2016 has started off even worse for Russia than 2015. As oil prices continue to drop along with the Ruble the Russians have to do something so current plan Kremlin considers stimulus package

It involves spending 828 billion rubles (9.3 billion euros) to support – among others – the car industry, railways, construction and agriculture. But 134 billion rubles (1.5 billion euros) of that is not yet allocated from other budgets.

And the problem now being the same a before. Finding the money to pay for that stimulus. Russia has no credit so it can not borrow the money. It has to pay up front. This is why prior stimulus packages have failed.

Russian anti-crisis plans have a poor track record, only 17 of the 60 programmes in last year’s were fully implemented according to Russia’s Audit Chamber.

Their has been some talk off selling of parts of the state owned companies but, they do not want to sell to non Russians so that means they have few buyers even at bargain basement rates.

The other talk has been of finding a way out of Ukraine and getting a peace deal to lift Western sanctions. That has two problems, one Russia has to save face some how and two even with sanctions lifted will Western investors return to Russia with its track record?

Short term I have no idea what can be done for Russia. Its seems it is going to get much worse before it gets better. Right now Russia needs money and nobody seems willing to loan them any. An end of sanctions may help but, it may take time before Russia can lure Western capital back.

Long term it needs to develop an economy that is not almost completely dependent on oil and natural gas. And it needs a complete revamp of its arms industry as well. The Chinese are taking its low end weapons markets buy selling cheaper clones and the West taking its high end market because Russian orders are always late and defective. And with China investing in Ukraine's defense industry that means another competitor on the market. And something has to be done about the corruption. Big, problems but, if they could find the right leader they might get it done.

They'll just issue some more high interest bonds.

cbonds

Main Bond indices of Moscow Exchange

I honestly hate to see a great country like Russia fail. I wish them the best.

With an uptick in the number of protest, with the latest coming from the trucking industry, it makes one wonder how long putin can remain in power without having to put down a rebellion.

They need to just do what Sweden did and just arrest the crooked bankers

What they should do is sell temporary rights to extract resources to western countries like timber, etc. Make the foreign country pay for all equipment, come in for a few years, get what then can, and get out. That way they can sell out for money without it looking like a real sellout.

a reply to: CB328

I dont think China will appreciate other countries using its economic model.

originally posted by: Xcathdra
With an uptick in the number of protest, with the latest coming from the trucking industry, it makes one wonder how long putin can remain in power without having to put down a rebellion.

With an approval rating like Putin's it makes me wonder how he will ever not be in power.

We have protests everyday in my city. Rarely do they make local news. As long as that pretty girl on the evening news doesnt mention it then it never happened.

The amount of money they are talking about is small in the scheme of things, they will just borrow from China.

Once the sanctions are lifted and they will be soon, by Europe at least, investment will flood into Russia. People love to make money fast.

Yeah but it will be the big money men who bring down Putin. If the oligarchs feel their fortunes are excessively threatened by Putin's policies, then they will find a replacement for Putin.

But so long as London has its doors wide open as a Russian Billionaires Playground, I expect they'll be happy enough.

With Russia purchasing real gold in the past and the price of gold now rising as world equities collapse, i think they might be able to pull this one off successfully. Especially, if countries AAA Rating is based on its quantity of real gold reserves.

Secondly, if they do have DUMB's, specifically for the survival of the Russian people, then it shows they really do care for their people.

So its going to be interesting to observe the status of their peasants 10 years from now and compare their status to what the American peasants were like after their Government said 'we really do care for the American Tax Payer' many years ago and continued to outsource US jobs.

originally posted by: Nexttimemaybe
The amount of money they are talking about is small in the scheme of things, they will just borrow from China.

Once the sanctions are lifted and they will be soon, by Europe at least, investment will flood into Russia. People love to make money fast.

China did not help them last year and is not going to this year without some sort of big concession to make sure they get some money back. For China, Russia's problems have allowed them to overtake Russia as the largest trade partner in the Central Asian Republics, steal Russian arms markets and make some big trade and defense deals with Ukraine. China will do what is best for China. And Western investors got burned in Russia once unless something significant changes, like the Government, the risk far exceeds the rewards. And Russia needs to get into shape where the West can not shut down its economy anytime they feel like it.

a reply to: rob420j

They need to just do what Sweden did and just arrest the crooked bankers

And leave the crooked politicians?

How do you think Putin has stayed in power as long as he has?

a reply to: Painterz

Yeah but it will be the big money men who bring down Putin. If the oligarchs feel their fortunes are excessively threatened by Putin's policies, then they will find a replacement for Putin.

Nothing, just as they did when they had problems with him over Ukraine.

Vladimir Putin isn’t just angering leaders from Berlin to Washington. He’s irking some of his richest friends, too, by snubbing their pleas to end the conflict in Ukraine and ostracizing all but a handful of hardliners.

The ruble’s plunge has heightened opposition to Putin’s backing of the rebellion in Ukraine among his wealthiest allies, prompting the president to shrink his inner circle from dozens of confidants to a small group of security officials united by their support for the separatists, two longtime associates said.

Putin is increasingly suspicious of men who owe their wealth to their ties to him and who are being hurt the most by U.S. and European sanctions, according to the people, who spoke on condition of anonymity to avoid reprisal. The 21 most affluent people in the country lost a total of $61 billion last year, a quarter of their combined fortune, according to the Bloomberg Billionaires Index.

www.bloomberg.com...

a reply to: MALBOSIA

With an approval rating like Putin's it makes me wonder how he will ever not be in power.

Only because he tries his best to keep the truth from the Russian people, or he wouldn't be so popular.

a reply to: MALBOSIA

Because at some point people stop believing the lies Putin puts out. He can only blame outsiders for so long before people start to call bs, as we are starting to see occur in Russia.

originally posted by: tsurfer2000h
a reply to: MALBOSIA

With an approval rating like Putin's it makes me wonder how he will ever not be in power.

Only because he tries his best to keep the truth from the Russian people, or he wouldn't be so popular.

I suppose you can speculate. Nothing wrong with that. Like I would speculate the Pride of the Russian people and their resilience against the psychological impacts we normally suffer during recessive times. Russian people are seemingly stronger than we are willing to be.

When has a western politician stood in front of a crowd of press and answered any question without screening them first. Controlling messages is what defines western society, and you point the finger at Putin and speculate that he is doing what we have professionalized? How rich.

originally posted by: Xcathdra
a reply to: MALBOSIA

Because at some point people stop believing the lies Putin puts out. He can only blame outsiders for so long before people start to call bs, as we are starting to see occur in Russia.

See above.

a reply to: MALBOSIA

Sure but its a shame they suffer because their leaders, like putin, are morons.

Secondly trying to say western media is the same as russian media reinforces what im saying. You guys are incapable of dealing with the problems putin / russia create from their own stupidity. Our media can ask the hard questions without fear of being shut down or threatened by a Chechen leader for "disloyalty".

originally posted by: MALBOSIA

originally posted by: Xcathdra
a reply to: MALBOSIA

Because at some point people stop believing the lies Putin puts out. He can only blame outsiders for so long before people start to call bs, as we are starting to see occur in Russia.

See above.

see above.