Russia has had a good 2017, despite western sanctions, military provocations by NATO and the EU and the costs of the successful interventions in Syria. Interest rates have been cut and yet still provide a good real rate of return (about 5%) for Russians. The country’s budget deficit is estimated to be less than 1% (the UK is about 3%) The country’s gold and foreign exchange reserves are up 30%. The economy has come out of recession with four successive quarters of growth, inflation has come down to 2.9% which is a near record low for Russia.
Russia, under attack from the West – and the aggressive but weak British Foreign Secretary – has shown generosity of spirit to the British in this deep mid winter. Despite the anti Russian sanctions a Russian tanker Christophe de Margerie has brought the first delivery of liquefied natural gas (LNG) to the UK. Because of a crack in a 42 year old pipeline bringing gas from North Sea fields we in Britain are critically short of gas.
The second irony of this delivery from Russia on whom we apply sanctions is that it comes from the Yamal LNG project in the Russian Arctic where TOTAL is a 20% partner. TOTAL is a a French company and France is also applying sanctions on Russia.
Having suffered from the collapse in the oil price the Russian economy and the Russian Treasury has recovered with oil tax revenues now accounting for only about 39% of all revenues and of course a significant rise in the oil price during 2017 has benefitted the economy as a whole. Russia has increased oil extraction in the Arctic region by more than 20 percent in the first half of 2017 in comparison to the same period last year, with the total output amounting to 13.6 million tonnes.
2017 was a post soviet record for grain production and record grain exports have been achieved.
Foreign investors are taking a very positive view of Russia. Based on the data of the holdings of 126 funds with combined assets of $300bn in emerging markets, 72.8 per cent are now overweight on Russia, compared with only 60 per cent with an outsize position in India. One Swiss fund manager said:
“I was publicly critical of investing in Russia. I have covered Russia for 25 years and this is the most I have had,” he said.
The accountancy firm PwC released a report in late 2017 with growth forecasts to 2050 for 32 of the world’s largest economies. They predict that
“Japan ,Germany and GB just cling on to their top ten positions at No 8,9 and 10 while China and India are No 1 and 2 and Russia stays at No 6.”
Compared to the other major EU economies France (12th) and Italy (21st) Russia is expected to do well. The EU will continue its historical decline – so the UK has made the right choice to leave but has made the wrong choice to make an enemy of Russia. Maybe that is because the British PEOPLE decided to leave the EU while the British POLITICAL CLASS decided to attack Russia.
Russian social statistics also greatly improved, with a better birth rate and lower mortality rate. Life expectancy is up. Capital investment rose 4%.
We know that Russia is now above the USA in the world table for tackling business corruption – and what a year Germany and France have had for showing the corrupt practices of their industries!
The future is likely to be politically stable with Vladimir Putin enjoying his customary 80% rating and no credible alternative policies or political figures capable of gathering support.
There is no substitute (especially in this era of fake western news media) than the reports from those who actually live in Russia and a friend who lives in Novosibirsk sent the following about a trip to Moscow:
I was travelling on the Metro with a Russian friend last night. He is a student at university in his fourth year in Moscow, originally from a closed town near Krasnoyarsk. As we were going down the escalator at Belarus Station he asked me if I had noticed how much cleaner and safer Moscow had become in the past few years? – i.e. the four years he has been in Moscow.
I hadn’t really thought about it but realise now how true this is. Of course, it IS much safer than it was 14 years ago when first I came. But the amount of litter that used to be on the streets and in the metro was very great even a few years ago. Now it s clean and without any graffiti or litter. There are also far, far fewer beggars in the streets and there are major construction works.
The other thing I wanted to mention again is the fact that for two mornings I have had extreme difficulty in getting into the local church because of the huge crowds of worshippers thronging the place.
Vladimir Putin’s highest priorities today are infrastructure and health care and of course (since the corrupt Yeltsin years when the West built up the corporatist systems which have served us so badly in the West) the perennial fight against big business corruption and the political machinations of the Oligarchs created by western advisers. Many of those oligarchs fled to the West with their ill-gotten gains, in particular London.
ALL SOVIET UNION DEBT NOW REPAID
With the repayment of $152m to Bosnia, Russia has now paid off the last outstanding debt of the old Communist Soviet Union. Unlike the former Republics which became independent after the USSR broke up and were relieved of their share of Soviet debt, Russia took that debt on and has been repaying it over the years.
Russia’s external debt is tiny and is yet another reason why the western sanctions are having so little effect.
RUSSIA COMPARED TO THE UK
There is of course much to be done in Russian politics and economics – but the important thing is that the country and its economy are moving in the right direction. The recovery has been remarkable. If we compare Russia with the UK we see
A strong Christian revival
The rule of the will of the vast majority
Strong family based moral leadership
encouragement of small business
very low personal taxes
good capital investment
good savings rate
good return on savings
strong defence (at very low cost compared to USA)
a successful foreign policy
On all these criteria the UK is failing disastrously and both the Government and the official opposition are disliked intensely. Many Brits might well consider, as they flee a heavily indebted country with internal disruption from mass migrations and Islamic extremism, that Russia might by comparison be a good prospect!