Oil Price Rises After Trump Phones Putin — Gary Littlejohn

Mostly analysis instead of oil politics.

The Vineyard of the Saker
Oil Price Rises After Trump Phones Putin
Gary Littlejohn for The Saker blog

WAR ON THE TOILET PAPER FRONT — RUSSIA’S TISSUE BATTLES SWEDES, TURKS, AMERICANS—John Helmer

Now that toilet paper has become an asset in addition to a commodity.... 😀

Dances with Bears
WAR ON THE TOILET PAPER FRONT — RUSSIA’S TISSUE BATTLES SWEDES, TURKS, AMERICANS
John Helmer

The Kremlin Plans to Modernize Russia, Again — Stephen F. Cohen

With all this “living history” in mind, Putin’s plan for such large-scale (and rapid) investment has generated the controversy in Moscow and resulted in three positions within the policy class. One fully supports the decision on the essentially Keynesian grounds that it will spur Russia’s annual economic growth, which has lagged below the global average for several years. Another opposes such massive expenditures, arguing that the funds must remain in state hands as a safeguard against the US-led “sanctions war” (and perhaps worse) against Russia. And, as usual in politics, there is a compromise position that less should be invested in civilian infrastructure and less quickly....

The Nation
The Kremlin Plans to Modernize Russia, Again
Stephen F. Cohen | Professor Emeritus of Russian Studies, History, and Politics at New York University and Princeton University

As Global Growth Stalls, The Russian Economy is Gathering Momentum — Jon Hellevig

There’s a lot going for the Russian economy as 2020 kicks into its second month. Russia’s government reshuffle is seen as removing austerity constraints and speeding up the financing of Putin’s ambitious national development programs. In his speech to the National Assembly, Putin signaled the end of austerity on social spending, Russia being the only country in the developed world, which is now seriously increasing social spending (among other things, increasing pensions double the rate of inflation and initiating massive child support programs) while everyone else is cutting. We expect that the Central Bank will have to follow suit and end its financial austerity in order to finally slash – Russia’s globally record high – real interest rates in line with the rapidly sinking inflation. Russia’s manufacturing industries will continue to grow above global averages fueled by the national development programs and on the strength of the now maturing import substitution programs. With new gas pipelines opened end of 2019 to China and Turkey, Russia’s energy exports will stay strong no matter what happens in the global economy. Because of the overall strong economy and the concurring huge reduction of influx of new young adults to the labor market due to the effects of the demographic crisis in the 1990’s, the labor market will be increasingly tight putting upwards pressure on wages, which will increase consumption....

Awara
As Global Growth Stalls, The Russian Economy is Gathering Momentum
Jon Hellevig

They Begin To Suspect Something — Andrei Martyanov

Now Russia's main strategic secret is out and some more-or-less competent observations are being made. About time. Of course people in Financial Times do not understand the real size and scale of Russian economy and repeat same ol' monetarist BS (accidentally, responsible for driving US and UK's economies into the ground) that Russian economy's size is $1.7 trillion, but let's forgive victims of Wall Street make believe world of virtual, zero value added, FIRE economics, and concentrate on what this establishment rag got right about Russia....

Far from destroying the Russian economy as expected and intended, the reverse has happened. For one thing, Russia cured itself of "Dutch disease" resulting from being "just a gas station" (John McCain). And that is only the beginning of the story. Andrei Martyanov hits some of the highlights.

And all this without mentioning the defense industry playing catch-up and surpassing Western military technology in strategic areas.

Reminiscence of the Future
They Begin To Suspect Something.
Andrei Martyanov

See also

Of why Putin already is in Russian history together with Peter, Katherine, Lenin, Stalin. This video, of the city of Krasnoyarsk is made in the mode "What is was--What it is now" shows an absolutely mind-boggling progress of Russia of 2002 to Russia of 2019. It is a superb video, authors did an extraordinary job and it shows, dramatically, what hole Putin and his people dug Russia from when came to power in 2000. What was done in 17 years is stunning. Russian people, with the exception of some young and stupid urbamites, and, of course, liberda, know this. They also feel pride for their country. Immense pride, I know, I saw and experienced it myself when visiting Russia. Enjoy.

One Of The Most Stunning Proofs...

Awara — Major Changes in Russian Legislation for Business in 2020

1. Russia Is Switching to Electronic Labor Books
2. There Will Be More Self-employed Workers
3. The list of goods subject to mandatory marking will be expanded
4. Personal income tax for non-residents will be decreased

Awara
Major Changes in Russian Legislation for Business in 2020

Sputnik — Putin Explains Why Russia Can Afford to Spend Less on Defence

Targeted expenditure based on priorities determined by national security and aimed at neutralizing threats. In other words, defense rather than global power projection, like US-led NATO.

The real expenditure, however, is not in nominal terms but with respect to allocation of real resources that are scarce, most significantly, knowledge and skill. Russia has established dominance in technological innovation in weapons development and manufacture. This requires investment in education and R&D.

Sputnik International
Putin Explains Why Russia Can Afford to Spend Less on Defence

See also

Between 2000 and 2016, while the Chinese economy averaged official annual growth rates around 7-8 percent, the PLA’s budget grew even faster at 10 percent. Despite that, the PLA’s current roughly $200 billion dollar budget totals less than one-third of U.S. defense spending. However, China pays much lower costs for hardware and personnel because of China’s “latecomer advantage” as the DIA report explains:

“China has routinely adopted the best and most effective platforms found in foreign militaries through direct purchase, retrofits, or theft of intellectual property. By doing so, China has been able to focus on expediting its military modernization at a small fraction of the original cost.”

Prominent examples include China’s aircraft carriers and its J-11 jet fighters.

By 2017, Chinese defense spending growth declined to 5-7%percent and the PLA shed 300,000 personnel, bringing it down to 2 million-strong—still the largest armed force on the planet. This transition sought to remodel the PLA into a leaner, more flexible force suited for fast-paced modern warfare.…

Actually, the nominal expenditure is lower than the US owing to differences in const. However, the cost in terms of real resources is the same. Real resources that are committed to military use, including exports, are not available for use in the domestic economy. So the cost in real resources per capita would have to be figured as real terms rather than in monetary terms. For example, China's military commitment of personnel is 2 million out of a billion people and that the US is one million out of 300 some million. The US is committing significantly more per capita to its armed services.

But this doesn't include related commitment, such as the arms industry, covert operations, etc. Some of those figures are classified. Moreover, it is impossible to tell what level of resources is being committed to black operations.

Finally, none of this is really germane to assessing power capability. The author has a degree in conflict resolution and apparently no background or training in military science. The question is not much much but how effective. For example, power projection is more costly than defense.

The US military and NATO is about force projection. China and Russia's militaries are orient toward national defense. In their case, asymmetry advantage lies in neutralizing potential adversaries' through technological weapons, like hypersonic missiles, electronic warfare, and cyber warfare.

It's not how many bucks, or even how much equipment, but rather the bang for the buck.

Based on this both China and Russia are modern military powers capable defending themselves against attack and protecting their periphery through denial of access. On the cheap.

The National Interest

Yes, China Is Now a Major Modern Military Power

Sebastien Roblin

US Is the Single Biggest Foreign Investor in Russia’s Economy — Ben Aris

Longish and detailed backgrounder on FDI in Russian economy, not just US.

Checkpoint Asia
US Is the Single Biggest Foreign Investor in Russia’s Economy

Ben Aris, BNE

Awara — The Government and Business Approve New Steps to Improve Business Climate in Russia

The Plan of the Ministry of Economic Development for the Transformation of the Business Climate Was Supplemented with New Measures Vladimir Putin set an ambitious goal for the Ministry of Economic Development: by 2024, Russia should rise to 20th in the World Bank’s Doing Business rating (now our country occupies 31st place out of 190)....

Russia and China have managed economies along with market-based economies. This is proving to be be a good balance between hierarchical technocracy and economic liberalism. Planning is working for both countries, seemingly contradicting the argument of economic liberals that any government "intrusion" is inefficient and reduces outcomes. At the same time, economic liberals also generally oppose direct democracy as "rabble rule," opting instead for what amounts to political illiberalism, which is what "bourgeois liberalism" really is as the dominance of the ownership-managerial class.

Awara
The Government and Business Approve New Steps to Improve Business Climate in Russia

What does Putin’s staffing decision vis-à-vis Glazyev mean — The Saker

This is important. But if you have not been following Russia, then its level of detail may obscure the key point. Sergei Glazyev is the closest to MMT of all the Russian economists of influence, and he was in Putin's inner circle of advisors until this announcement.

The Saker unpacks its implications for Russia. He views it as good move by Putin, since it is simply not possible to implement a Glazyev program in Russia. Neither is Putin that powerful if he wanted to do so, but other conditions supervene even if he did want to.

Note: "Liberal" in the Russian context means neoliberal, and the neoliberals see their future in alliance with Europe and the US. Russia is basically a conservative traditionalist country and the stavka (military general staff) and siloviki (deep state) are very conservative, so that is not going to happen on their watch, especially after neoliberalism almost destroyed Russian society in the aftermath of the collapse of the USSR.


The Vineyard of the Saker
What does Putin’s staffing decision vis-à-vis Glazyev mean
The Saker

Quietly, Russia Is Inaugurating a New Economic Order to Transform Where Its Wealth Comes From — Chris Weafer

We are today half-way through the first year of the latest transition in Russia. In fact, this is the third major transition, or change of direction and priorities, sincethe emergence of modern Russia in 1991.

This particular stage in the evolution is when, if handled correctly, Russia should start to see the emergence of a new economic order and the start of more sustainable and steady growth with lifestyle and social improvements to match. It is of course far too early to be able to say that this process is successful, or will be successful, or is a failure. Focusing on short-term indicators and political headlines in the midst of what has already been a very significant process is both pedantic and wrong.

It is better to look at how the major parts of the process, the big picture as it were, are working, or not, and to then be able to assess the probability of eventual success and in which direction the economy and investment climate are heading....

Counterpoint Asia
Quietly, Russia Is Inaugurating a New Economic Order to Transform Where Its Wealth Comes From

Chris Weafer, bne IntelliNews

TASS — Nabiullina names problems that hinder successful national project implementation

The head of the Bank of Russia, Elvira Nabiullina, identified the problems that create risks for the successful implementation of national projects and the achievement of sustainable economic growth, at the International Financial Congress on Thursday.

"This year, the government has begun implementing national projects that are designed to remove structural constraints. These projects, involving investments in education, health care, and infrastructure, should be worked out with effective management. But there are two serious problems that cannot be ignored if we really want sustainable economic growth," she said.

According to her, Russia needs to create incentives for the development of private investment and entrepreneurial initiative. "Public investments cannot replace private ones. And even with the successful implementation of national projects, there is no guarantee in their state part that they will create a commensurate multiplier effect through increased private investment," she said. Nabiullina also said that structural changes are needed, but she stressed, "there are no simple solutions."

"The second problem - structural changes are time. First, because of high oil prices, then, because of the need to concentrate on strengthening macroeconomic stability, we postponed the implementation of many urgent structural reforms, and now we want a quick result. As a result, we again find ourselves trapped in the "search for simple solutions" when we search for where there is light. And for some reason, usually all searches for a solution with this approach are brought to the Central Bank. I must once again state that there are no simple solutions," she added.

TASS
Nabiullina names problems that hinder successful national project implementation

Andrei Martyanov — About US Dollar and Sanctions, Yet Again.

It is clear that once dominance of the US Dollar and the system which sustains it is removed, consequences for the United States could be catastrophic. The question is NOT about IF US Dollar will survive as world's reserve currency--this is not even up for a debate--it is WHEN and HOW the departure will happen.

Reminiscence of the Future
About US Dollar and Sanctions, Yet Again.
Andrei Martyanov

Tom Luongo — Russia’s Exports Continue to Defy Sanctions

Putin was not joking about sanctions being a blessing in disguise, since Russia would have found it difficult to restructure otherwise. Necessity is the mother of invention.

Gold, Goats 'n Guns
Russia’s Exports Continue to Defy Sanctions

Tom Luongo

Valdai — A Change of Gestalt for the Russian Economy: How to See Trees Behind the Forest, and Regions Behind the Centre

“Russia is not a country. It is a federation that consists of more than 80 regions. We cannot consider it kind of unity, since these regions are very different ” – this provocative point marked the Valdai Club discussion on January 28, dedicated to regional imbalances in the Russian economy. Apurva Sanghi, the leading economist of the World Bank in Russia, who put forward this idea, spoke about the uneven development of various Russian regions. These include rich and poor ones, poorly and densely populated. At the same time, he said that conclusions about the potential of a particular region are often incorrect. Why?

The same is true for most federations and provincial states, including the US. We tend to think of these economies as relatively homogenous, as suggested by the name, but this is seldom the case in countries of any size and with any historical complexity.

Valdai
A Change of Gestalt for the Russian Economy: How to See Trees Behind the Forest, and Regions Behind the Centre

Joaquin Flores — Russian Central Bank: Sanctions Do Not Have Decisive Impact on Economy

Sanctions do not have a decisive impact on economic growth in Russia, said Elvira Nabiullina. The head of the regulator spoke at a press conference with journalists today.

“With regard to sanctions risks, geopolitical, we, of course, take this into account as one of the significant factors in forecasting the development of the economy. But I want to say that, in general, the economy is adapting to these sanctions, and we see that the growth rates are now close to potential. This factor cannot be ignored, but it has a limited effect,” said Nabiullina....

Fort Russ

Russian Central Bank: Sanctions Do Not Have Decisive Impact on Economy
Joaquin Flores

John Hellevig — AN AWARA ACCOUNTING ECONOMIC ANALYSIS: Russia’s Economy Strong and Stable – Cold War, Arms Race, Liberals, and Other Challenges

Jon Hellevig is the best analyst of the Russian economy, who makes his views freely available anyway. This is a comprehensive report.

We are into the fifth year of the US initiated trade war on Russia. Cold War 2.0. is an established reality, trade wars are flaring and Trump raves about an arms race. But Russia is strong and stable with outstanding military power and a reindustrialized modern economy, lean and mean, ready to deliver a knockout blow to the US regime in its ghastly arms race challenge. This study on the Russian economy will demonstrate why so.…

While there is certainly a trade war in progress, initiated by the US, I would call this a hybrid war, since it is being conducted on many levels, with economics and finance only one, along with information war, NATO expansion, Ukraine coup, etc. The Russian leadership realizes that it is under attack, although Putin and Lavrov's so-far conciliatory tone masks that, to the degree that some think Russia is therefore in the dark about it.

An advantage of Russia in this conflict is that it is fighting a defensive battle with the US and NATO, while the US and its allies are prosecuting a war of choice. For Russia this is an existential threat. Those poking sticks into the bear's liar don't seem to get this.

Awara Group
AN AWARA ACCOUNTING ECONOMIC ANALYSIS: Russia’s Economy Strong and Stable – Cold War, Arms Race, Liberals, and Other Challenges

Jon Hellevig, founder

See also

The West is complaining about Russian 'aggression' but the incident looks more like a cheap ploy by a desperate Ukrainian president and US conservatives keen to undermine Trump's next pow-wow with Putin

Asia Times
Drama in the Kerch Strait: teasing the Russian bear
Pepe Escobar

See also

Moon of Alabama
Ukraine – Poroshenko Initiated Clash With Russia To Gain Dictatorial Powers – He Failed 

Richard Connolly — Russia’s Response to Sanctions: How Western Sanctions Reshaped Political Economy in Russia

My conclusions:

1. The West is conducting economic warfare against Russia and Russians in general realize that his is the not-so-hidden agenda.

2. So far Russia has adapted successfully to the challenges and as a result become stronger and more integrated with the non-West. The West hadn't anticipated this. The consequence is that the West is in a worse position than prior to launching the economic war.

3. Specific understanding of MMT would greatly improve Russia response-capability, on one hand, and other the other, also enhance Russia's ability to employ its considerable resources more efficiently and effectively.

Valdai Club
Russia’s Response to Sanctions: How Western Sanctions Reshaped Political Economy in Russia
Richard Connolly | Senior Lecturer at the University of Birmingham, Associate Fellow at Chatham House, Visiting Professor at the Russian Presidential Academy of National Economy and Public Administration

See also

Reminiscence of the Future
Realism?
Andrei Martyanov

Chris Weafer — Mapping the Consequences of Inevitable Sanctions on Russia

Not in paradigm with MMT, but still useful since the Russian government doesn't understand MMT either, although the Chinese government apparently has so far, at least to some degree more than the Russian government. However, the US government is clueless about MMT, hence economic reality, so the economic warfare is conducting is failing and will continue to fail.

Russia Insider
Mapping the Consequences of Inevitable Sanctions on Russia

Chris Weafer

See also

Russia Insider
Since 2012 Russia Has Gone From 120th to 31st in Ease of Doing Business

bne IntelliNews

See also

Sputnik International
Iranians Blame Trump, Not Tehran, For Slumping Economy

Awara — Doing Business in Russia: The Government Is Preparing a Series of Measures to Improve Business Climate

Doing business in Russia will become easier: the Ministry of Economic Development, with the participation of entrepreneurs, has prepared a set of measures within the framework of the Transformation of Business Climate Plan (TBC).

This project is not temporary: every six months the list will be updated with new initiatives. Already the first package of measures included proposals in 13 areas (taxes, control and supervisory activities, customs administration, human capital, labor productivity, etc.) and more than 130 measures....

Awara
Doing Business in Russia: The Government Is Preparing a Series of Measures to Improve Business Climate