The president’s plan would amount to nationalization — the single economic policy proposal to have stirred the Kremlin and Russia’s economic policymakers as they stand on the brink of an unprecedented economic crisis.
With few tools at their disposal and a national economy disintegrating almost before their eyes, the Russian government has appeared paralyzed, analysts say, lurching for Soviet-era policies — like nationalization, currency controls and price caps — in an attempt to soften the blow.
“In terms of the government, the problem is that they’re silent about the economy,” said Ruben Enikolopov, an economist and rector of Moscow’s New Economics School.
“The first reaction for many of them — because they grew up in the Soviet Union, so that’s the mentality they have — is price controls and things like that. They might work temporarily, but in the long-run it’s a disaster for the economy.”
“If everyone fought for their own convictions there would be no war.” ― Leo Tolstoy, War and Peace
Will Vernon @BBCWillVernon wrote:
Russia’s biggest carmaker AvtoVAZ is sending all its employees on a “20-day leave” amidst a shortage of deliveries of electronic components.
“Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.” —John Adams
The United States, Europe and their allies rely on Russia for some oil and gas, and a few specialized materials. But they also supply Russia with much of its machinery, vehicles, technology and equipment that help Russia’s economy run.
That’s why sanctions can be so effective.
Without global trade, Russian factories would sit idle, businesses would shutter and shelves would sit bare. Even blocking some of those goods from countries that have already imposed sanctions or restrictions could dismember whole sectors in Russia. Some Russian companies that rely on imported components are already reeling — production lines at the automaker Lada reportedly went idle earlier this month.
Meanwhile, countries that usually sell goods to Russia have a lot less to lose when trade is cut off. Russia spends $11.5 billion annually on its largest import, cars, according to Trade Data Monitor. Germany, South Korea and Japan lead the market, supplying 63 percent of Russia’s motor vehicles. But they would lose only about 3 percent of their international business if they stop selling to Russia.
Russia has defaulted on its foreign debt, says S&P
Russia has defaulted on its foreign debt because it offered bondholders payments in rubles, not dollars, credit ratings agency S&P has said.
Russia attempted to pay in rubles for two dollar-denominated bonds that matured on April 4, S&P said in a note on Friday. The agency said this amounted to a “selective default” because investors are unlikely to be able to convert the rubles into “dollars equivalent to the originally due amounts.”
According to S&P, a selective default is declared when an entity has defaulted on a specific obligation but not its entire debt.
Russia has eased safety standards for cars produced on its territory, such as dropping the requirement for airbags, after Western sanctions over the war in Ukraine caused a shortage of electronic components and car parts. In a decree signed on May 12, the Russian government announced a list of reduced requirements to certify some types of new vehicles produced in the country.
It includes the production of cars without Anti-Lock Braking System (ABS) sensors, airbags or Emergency Locking Retractors (ELR) for seatbelts. The decree is in effect until February 1, 2023.
According to the same decree, Russia will also significantly reduce its environmental standards for cars, the Kommersant business daily said in its Monday edition, bringing them back to standards for vehicles produced in 1988.
We may complain about the availability of new cars in the U.S. because of supply chain issues, but Russia has it 10 times worse. As it should.
Tim Walz’ Golden Rule: Mind your own damn business!
pipistrelle wrote: ↑Wed May 25, 2022 6:53 am
Never understood why Starbucks is so popular. To me the coffee tastes like someone had used it for campfire fuel.
Starbucks is less a coffee shop and more a 'coffee themed drink with expensive additives' shop.
Suranis wrote: ↑Tue May 24, 2022 3:24 pm
Yep, the starving Russians desperately need overpriced foul tasting Coffee.
FIFY
Never understood why Starbucks is so popular. To me the coffee tastes like someone had used it for campfire fuel.
Chaque a son goût. Their flat white is my fave and they make a damn fine Chai. I drink coffee only a few times a month these days so the cost no longer figures into my deliberations.
Suranis wrote: ↑Tue May 24, 2022 3:24 pm
Yep, the starving Russians desperately need overpriced foul tasting Coffee.
FIFY
Never understood why Starbucks is so popular. To me the coffee tastes like someone had used it for campfire fuel.
Its the same reason coka cola is the world number one despite not tasting that great, and McDonalds is despite their Burgers being pretty crappy - marketing.
