Russia: Putin Predicts Pre-Crisis Levels of Economic Growth

Russian President Vladimir Putin played host to an annual telethon and question-and-answer session earlier this week in Moscow. During the Q&A session, the Russian president stated that he expects Russia’s economy to reach growth levels seen before the current crisis within a period of two years. While likely to attract naysayers in the West, the ruble has rebounded slightly within the last several weeks, as we made note of yesterday. Russia’s inflation rate has slowed and the currency’s standard is better than it has been in months.

Furthermore, the Economist recently published an optimistic analysis of the Russian economy. In it, mention is made of Russia’s 30% appreciated ruble, rises in government bond prices and the cutting of interest rates by the Russian central bank, the latter of which, the analysis supposes, indicates that the worst economic issues have already passed. Global oil prices, however, continue to have a negative effect on the Russian economy as OPEC oil production has increased and Brent crude prices continue to fall.

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News briefs:

  • Tensions have risen again in Ukraine after a well-known pro-Russia journalist was shot and killed in Kiev. The shooting of Oles Buzina is the second such murder in two days in Kiev, as Oleh Kalashnikov was killed earlier this week. The killings of Buzina and Kalashnikov are but the latest outspoken supporters of Russia to be killed in Kiev.
  • Wood Mackenzie economist Cynthia Lim predicts that China’s westward-focused strategy will culminate in the formation of a new commodity superhighway. The highway would conceivably be utilized to impact China’s trade with the West via its own planned New Silk Road routes. Lim alleged that the superhighway would have the greatest impact in three separate areas: increased power generation, grader trade within China and the eventual expansion into Central Asian markets.
  • An Amnesty International report accuses the European Union and United States of turning a blind eye to human rights abuses in Uzbekistan in order to pursue political objectives in Central Asia. The United States is widely known to have utilized Uzbek territory as a transit route into Afghanistan, and Germany maintains a military base near the Uzbek-Afghan border. The report details “horrific techniques” used by security forces in Uzbekistan and alleges that Western forces were aware they were being used, but did nothing in order to protect “geostrategic and business interests.”
  • A new report by published by Russia’s main intelligence directorate alleges that extremists in Central Asia and the Middle East earn approximately $500 million annually from the drug trade. In addition, the report also alleges that more than 200 NGOs spread throughout the region but concentrated primarily in the Arabian Peninsula provide conduits through which large sums of money are funneled to extremist groups for use in Central Asia or the Middle East.
  • Tajik President Emomali Rahmon has again made waves for bizarre extravagance after he laid the cornerstone of the what he claims will be the most beautiful movie theater in Central Asia. Despite the fact that Tajikistan has myriad economic and developmental problems, the theater is expected to cost around $100mn and include more than one concert hall as well. The theater is but one of Rahmon’s claims to fame, as he previously claimed the world’s tallest flagpole and claims to have Central Asia’s largest library and museum, though some of these records have recently been broken or proven to be untrue.

 

 

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