OK Smarty Pants ... Where are we going now? (world financial matters)

[IAmZon]

I raised this question about 3 years ago, and we all know where the last 36 months have gone.  Now the circumstances are much different.   

Especially in regards to the US Dollar / US income opportunities (including internet), where are the likely advantages as we consider life / leverage in the FSU; Ukraine; or Russia over the next 3 years?

(this could be good)

[mendeleyev]

Hopefully today's Mendeleyev Journal can provide some insight:


As reported yesterday in the Moscow Times, capital outflow from Russia has reached approximately $49.3 billion so far in 2011, and the Central Bank estimates that and additional $18.7 billion will take flight in the next quarter.

Perhaps weary of election uncertainty prior to the announcement as to who would be running the country and then added fears over the return to a more authoritarian style government with the return of Vladimir Putin to Russia's top post, investors appear to be voting with their feet in the understanding that election processes have little guarantee of a clean and fair election.

Former Finance Minister Alexei Kudrin, fired by President Medvedev in recent weeks, had said that capital flight was caused by "the high oil price and the impossibility of investing this revenue on the domestic market." Not exactly a complimentary view of investing in domestic Russian stocks.

Statements from the Central Bank revealed that the 3rd quarter numbers had doubled from the 2nd quarter at the rate of $9.2 billion and Sergei Ignatyev, chairman of Russia's Central Bank, said that the flood of capital pouring out of the country had swelled in more recent months.

Bloomberg Financial is forecasting that 2011 will be the year when Russia suffers the largest loss of capital since the world economic crisis began in 2008.

As for the Russian ruble, it has fallen against the dollar to levels not seen in more than 2 years.



Mendeleyev disclosure: I invest in Russian funds, participate in ownership of Russian based businesses, and home ownership. We will retire in Eastern Europe.

[ECOCKS]

The world is an uncertain place.
 
 There will have to be significant changes in government structure before it becomes clear whether anyone/country has a chance to pull back from this mess more quickly than any others.
 
 Simply a lot of over-production has occurred in most industries we recognize. In the industries we don't or have only begun to see any progress there is some possible legroom. Energy will be a profit-producer for the foreseeable future. Some localized areas and we will see some rebuilding of absolutely critical infrastructure as the existing base crumbles away. Pharma will probably have some opportunities as the standards of living drop overall and disease makes a comeback.
 
 Housing and construction will take a decade or more to recover in the west. Maybe some form of construction will re-emerge in the eastern bloc although I am not so sure it will be as widespread or long-lasting as we have been used to in the west.
 
 I anticipate some flight from currency bases, particularly the Euro after the fall of Greece and probably the dollar depending on whether the US can address its debt/deficit issues and a certainty if the Democrats somehow retain the WH in the next election.  Gold and precious metals look good. average people need to be sure they have a base level of food stores, ammunition and tools to see them through.
 
 For the FSU, I'd say stay friends with anyone that still has potato patches and knows basic farming, especially if they have seed stocks. at least the warehouses are stocked with Kalishnikovs.

[acctBill]

Hopefully today's Mendeleyev Journal can provide some insight:


As reported yesterday in the Moscow Times, capital outflow from Russia has reached approximately $49.3 billion so far in 2011, and the Central Bank estimates that and additional $18.7 billion will take flight in the next quarter.

Perhaps weary of election uncertainty prior to the announcement as to who would be running the country and then added fears over the return to a more authoritarian style government with the return of Vladimir Putin to Russia's top post, investors appear to be voting with their feet in the understanding that election processes have little guarantee of a clean and fair election.

Former Finance Minister Alexei Kudrin, fired by President Medvedev in recent weeks, had said that capital flight was caused by "the high oil price and the impossibility of investing this revenue on the domestic market." Not exactly a complimentary view of investing in domestic Russian stocks.

Statements from the Central Bank revealed that the 3rd quarter numbers had doubled from the 2nd quarter at the rate of $9.2 billion and Sergei Ignatyev, chairman of Russia's Central Bank, said that the flood of capital pouring out of the country had swelled in more recent months.

Bloomberg Financial is forecasting that 2011 will be the year when Russia suffers the largest loss of capital since the world economic crisis began in 2008.

As for the Russian ruble, it has fallen against the dollar to levels not seen in more than 2 years.



Mendeleyev disclosure: I invest in Russian funds, participate in ownership of Russian based businesses, and home ownership. We will retire in Eastern Europe.

Mendeleyev I agree that the rich in Russia simply don't trust the Russian government, especially with Putin as President, and want to protect their assets by moving their wealth out of Russia.  Take my former home, London, England, it has benefitted greatly from the investment by the Russian rich over the last decade. 

If there is another recession or depression as many economists are predicting look to an acceleration of capital exiting Russia for some safe country like the UK, other countries in Europe or the USA.   

As for retirement, my wife and I are thinking of southern Spain.  Lots of British and Russian speakers and let's face it the weather in southern Spain in winter is far better than the UK or eastern Europe.         

[Maxx2]

If there is another recession or depression as many economists are predicting look to an acceleration of capital exiting Russia for some safe country like the UK, other countries in Europe or the USA.   

     

I just read the IRS is going to turn over all banking information on all non-USCs to their respective countries. They want these countries to do the same for them.

[Boethius]

I just read the IRS is going to turn over all banking information on all non-USCs to their respective countries. They want these countries to do the same for them.

The IRS is looking for Americans who have squirreled away cash in tax havens.  However, as is wont with government, they've used a sledgehammer approach.  The reporting requirements for banks are onerous, and there also are heavy fines for non resident Americans who have not filed returns (as technically, they have to, even if no tax is payable).

The Canadian government is filing a formal objection to this law, as it hits Canadian situs banks and dual citizens, because compliance will be costly for the banks, and Canada is not a tax haven.

[chivo]

The money that is leaving Russia is foreign investment capital not Russian Oligarch money (it's business as usual with that money and it hasn't changed the economic climate). And it has much to do with a decline in foreign stock markets and the crisis going on in Europe, not with Putin announcing a return to the Presidency.
 
To put it in perspective it's less than the flight of capital before the last crisis in 2008. And the flight of capital now only makes up about 4% of the GDP. Of course it's not what you would like to see happening to your bottom line.

However, the vast majority of foreign investors see his announcement as a good thing as it at least stabilizes the situation here in Russia. If anyone thinks that Medvedev's reforms were his and his alone then you're very naive about the situation.

Really, the only thing that I found disheartening about it all was the controversy with Kudrin. And even that was more about his disagreement with Medvedev over defense spending. Kudrin and Putin remain "boys". Russia is in a better postion to handle another crisis than it was before the last one even if oil takes a temporary dump in price.

Unfortunately, we now live in a world that guarantees nothing. A secure future is a thing of the past as anyone's individual situation can change in a heartbeat. And it's anyone's GUESS what will happen to any particular country or any particular individual in any country going forward.

[acctBill]

The money that is leaving Russia is foreign investment capital not Russian Oligarch money (it's business as usual with that money and it hasn't changed the economic climate). And it has much to do with a decline in foreign stock markets and the crisis going on in Europe, not with Putin announcing a return to the Presidency.
 
To put it in perspective it's less than the flight of capital before the last crisis in 2008. And the flight of capital now only makes up about 4% of the GDP. Of course it's not what you would like to see happening to your bottom line.

However, the vast majority of foreign investors see his announcement as a good thing as it at least stabilizes the situation here in Russia. If anyone thinks that Medvedev's reforms were his and his alone then you're very naive about the situation.

Really, the only thing that I found disheartening about it all was the controversy with Kudrin. And even that was more about his disagreement with Medvedev over defense spending. Kudrin and Putin remain "boys". Russia is in a better postion to handle another crisis than it was before the last one even if oil takes a temporary dump in price.

Unfortunately, we now live in a world that guarantees nothing. A secure future is a thing of the past as anyone's individual situation can change in a heartbeat. And it's anyone's GUESS what will happen to any particular country or any particular individual in any country going forward.

Chivo I really don't know anyone, with the possible exception of Putin and his cronies, that agrees that having Putin in power for another 12 years is bringing stability.  The Economist states it plainly many Russians, the young and educated want to leave Russia for good. 

A recent survey by Campden Media and UBS, a bank, of 19 Russian businessmen with a personal wealth of more than $50m and a turnover of $100m showed that 88% had moved their personal wealth abroad and were prepared to sell their companies. Few planned to pass their businesses on to their offspring, which is hardly surprising, since most children of the rich and powerful are now ensconced in the West. Parents send their children abroad not to learn to run their businesses more efficiently, but so they never have to come back.  This is a prime example of the Russian rich leaving Russia.  Regions like the UK, the USA and Europe are the beneficiaries of the corruption and incompetence of the Russian government. 

A recent opinion poll by the Levada Centre shows that 22% of Russia’s adult population would like to leave the country for good. This is a more than threefold increase from four years ago, when only 7% were considering it. It is the highest figure since the collapse of the Soviet Union, when only 18% said they wanted to get out. Those who are eager to leave are not the poor and desperate. On the contrary, most are entrepreneurs and students.  When a country is losing its entrepreneurs and students the situation is bad. 

Chivo you say that it is foreign investment capital leaving Russia?  Perfectly true it is a massive amount of foreign investment capital leaving Russia, in addition to the massive amount of domestic capital.  Unfortunately Russia needs that capital and far more if it hopes to build the needed infrastructure to update their economy.  If President Dmitry Medvedev dream of building a Russian Silicon Valley is to come true foreign investment in Russia will have to be in the tens of billions of dollars. 

Unfortunately Russia's long-standing finance minister, Alexei Kudrin doesn't believe that the Kremlin is heading in the right direction and quit in the beginning of September, something the Russian markets and international investors didn't like.  Foreign capital investment in Russia isn't going to increase any time soon and if the anticipated recession occurs, Russia's one trick pony economy of oil and natural gas will mean cuts in every area of the economy no matter what Putin or Medvedev wants to do.

http://www.economist.com/node/21528596

http://en.rian.ru/business/20110617/164684229.html

[ECOCKS]

No real changes in terms of Russia's government. Putin's been in control the whole time while they experimented with a kinder, gentler front man. As Mendy reported a couple of weeks ago, journalists still try to fly, it's clear that oligarchs walk softly around the Kremlin's periphery and, meantime, ships still sink, planes still crash and the roads are still full of holes. 

Putin is seen as a strong leader, hence able to provide the perceived stability. They were more than a little uncertain about Medeved's "softness" but accepted him since he was the sock puppet on Putin's hand. 

In a country known for being modestly above subsistence-level existences this is not always such a bad thing. Many feel he won't let them starve even if only a few believe he can raise their quality of life. More than a few secretly hope that he will find a way to restore them to superpower status.

Most of the super-rich keep as much of their liquid assets as possible out of the country - Cyprus, the UK, the US, Switzerland, all the usual places. They're not stupid, understanding they may need to run, hide and restart in the west after they have milked the golden cow to the last drop.

[IAmZon]

Hmm - Fascinating "A recent opinion poll by the Levada Centre shows that 22% of Russia’s adult population would like to leave the country for good. This is a more than threefold increase from four years ago, when only 7% were considering it. It is the highest figure since the collapse of the Soviet Union, when only 18% said they wanted to get out. Those who are eager to leave are not the poor and desperate. On the contrary, most are entrepreneurs and students.  When a country is losing its entrepreneurs and students the situation is bad. "

They say those that look into the crystal ball end up eating glass, but I would suppose ...

The US Presidency will change and policies and the general "narrative" will shift to business - small business and the individual.  I would not be surprised to see the USA in a stronger position in 3 years, especially in comparison to Europe and especially Eastern Europe.  I would have thought 12 months ago, that the US dollar was screwed for a decade or two, but today, I feel more optimistic of a stronger, leaner, meaning US economy being born in the short term.

And, that may open up possibilities and present very advantageous conditions that Americans may exercise in FSU?   We will see

[XMan]

If you want to store wealth in some fashion outside of the US, legally, and not worry about reporting, etc., do it in gold, and not in a bank.  There are a number of options.

I only hope that we don't see hyperinflation and have life savings turned to dust.  I think that has contributed to the run up in gold per ounce.  Americans are net sellers of gold.  India and China net buyers.  Doesn't take rocket science to see the lack of faith in the dollar.  We just keep rolling the printing press along and taking no real action to fix core economic problems.

[acctBill]

If you want to store wealth in some fashion outside of the US, legally, and not worry about reporting, etc., do it in gold, and not in a bank.  There are a number of options.

I only hope that we don't see hyperinflation and have life savings turned to dust.  I think that has contributed to the run up in gold per ounce.  Americans are net sellers of gold.  India and China net buyers.  Doesn't take rocket science to see the lack of faith in the dollar.  We just keep rolling the printing press along and taking no real action to fix core economic problems.

Xman if you don't store your gold in a bank or some other financial institution specializing in storing valuables, where would you store your gold?  Rent a storage locker and store the gold in the locker?  Doesn't sound very safe.  Buy some property in an isolated area of a foreign country and bury the gold?  Again not too safe.

As for foreign countries buying gold according to official IMF records Mexico, Russia, and Thailand are leading the gold purchase in February, 2011 and March, 2011. Mexico is climbing up the ladder of gold holders by acquiring 14.8 and 78.5 tonnes of gold in February and March, respectively.  However if you look at the World Official Gold Holdings the US is still far ahead in official gold reserves.

http://seekingold.com/index.php/Gold-Market/Gold-Analysis/Gold-News/Mexico-Leads-Countries-Buying-Gold-in-Q1.html

[Shadow]

I see the usual fairy tales are still at work,

Reality, however is quite different.

Russia: While the return of Putin did surprise me as I expected Medvedev to do another turn before him coming back, it seems that the reason is they wish to create a viable opposition which has its roots in the current "school".
From this a new name will appear, one that has enough money already and will be seen as pro-western.

World economy: After several attemts to destabilize the Euro economy last year, at the beginning a different approach was taken by creating unreast in the Arabian world. Unfortunately money is running out to finance this, and the Euro/Dollar balance threatened to go further out of scale after the recent theater with the credit rating. This has now been corrected by causing some further turmoil regarding Greece, with the added threat to several banks and countries. Empty threats, but effective nonetheless to make the Euro/Dollar balance more acceptable for world trading. This has given Russia the chance to devaluate their currency a little, thus creating a more postive flow for their market.

Future: Depending on how the problems on US economy can be held within bounds, crisis in Eurozone will be calmed down and the current exchange rates will stabilize. Oil prices may sink by spring next year as the new puppets are in place in the Middle East.

In the long run Russia and China will proceed on a Eurasian union which will form a third powerful monetary block, unless the relations can be sabotaged somehow.

Russia will be accused of rebuilding the USSR once they reform Belarus in to a full pro-Russian country (thanks Western blockades), and establish a new government in Georgia. Customs union will be expanded to all GOS states, minus Ukraine that will continue to beg for membership of the EU, and failing miserably at it.

[chivo]

Chivo I really don't know anyone, with the possible exception of Putin and his cronies, that agrees that having Putin in power for another 12 years is bringing stability. The Economist states it plainly many Russians, the young and educated want to leave Russia for good.

Well the Economist is very anti-Russian to say the least. I will give them credit in the article you posted for being a little more balanced than normal.
 
The people who have wanted to leave Russia have already left. If someone really wants to leave there's nothing stopping them. Getting out of the country is quite simple. But I'll ask you this, where in the world will a Russian have a better opportunity than in Russia unless he/she can transfer outside of the country with his current job?

No one talks to more young people here than I and while some talk about a desire to leave Russia, none mention leaving for more than a year or two to study or to experience the difference in cultures, not for a perceived better life. And the number that really wants to leave is negligible.

 
I find your mentality about Russia very 1995-2000ish when you worked here.  And IMO you still think in those terms or believe everything you read about Russia from Western Press. When was the last time you actually lived here? Things are slowly changing and unfortunately many like yourself who left Russia, still think it's the same. It's not.
 
Not that it’s heaven either, but it takes time for things so entrenched in a culture like Russia to change a mere 20 years removed from a Soviet nightmare.
 
My comment about Putin’s decision was more about stabilizing the situation, as in now there are no questions who will be the next President, not whether it will bring stability to the country. And although I disagree with your statement, neither of us knows for sure what will happen.
 
I also think Putin is not the same guy he was in 2000. He’s a better Politician, not just a former KGB Colonel. The biggest reason I think this is because of the economic crisis in 2008. At that time there was much concern about the country repeating what happen in 1998 when the country defaulted. Didn’t happen for many reasons, mainly a better understanding of long term prospects, financial planning (Kudrin was the architect of Russia’s reserve fund) and the understanding that if Russia continues to go about its business “old school” style that its competitive business edge would be basically non-existent in comparison to the West.

A recent survey by Campden Media and UBS, a bank, of 19 Russian businessmen with a personal wealth of more than $50m and a turnover of $100m showed that 88% had moved their personal wealth abroad and were prepared to sell their companies. Few planned to pass their businesses on to their offspring, which is hardly surprising, since most children of the rich and powerful are now ensconced in the West. Parents send their children abroad not to learn to run their businesses more efficiently, but so they never have to come back. This is a prime example of the Russian rich leaving Russia. Regions like the UK, the USA and Europe are the beneficiaries of the corruption and incompetence of the Russian government.

The thing about surveys and polls is you can manipulate them to reflect what you want simply by the way you ask your questions, and to whom. And are polls there to reflect what’s really happening, or to lead us to believe something that they want us to believe?
 
And hey, Europe and the UK sure are benefitting with ALL that money yeah? Especially Italy, Portugal, Spain, Greece and Ireland. And if you ask me Russia is in a better position moving forward than even England at the moment. Things are sooooo good in Europe that they're asking for bailout money from Russia as well as the other BRIC countries.
 
The number of rich families wanting to leave Russia is minuscule. And they do it for a variety of reasons, most notably for a better education for their kids. Many of the rich here got rich through corruption and need to move their money. It might surprise you to know that Putin went after much of the corrupt money stolen by the Oligarchy in the 1998 meltdown when he entered office, so of course the money fled and continues to flee because of this. And yes much of that money just went to the state, but it did create a service sector and jobs which was almost non-existent until Putin took office (I’ll get more to this point later).
 
I spend a vast majority of my time in businesses around Moscow. I talk to lawyers, doctors, businessmen, economists (real ones not accountants), diplomats, students, etc. This is where I get much of my information about this country and what's going on inside of it now, not 10 years ago.
 
No one is saying that Russia doesn't have problems because it does. But, are you telling me England is in good shape now? Italy, Ireland, Portugal, Spain? Do you think a Russian has a better future outside his/her country without being transferred through their work? If you do then I strongly disagree with you. And no one is complaining about Sarkozhy, Merkel, Obama, Berlusconi or any other Head of State, yes? I mean they’re doing such a fantastic job.

 
Do young people in the USA see their future in bright lights? Stand outside any major University and ask the young people in America just how bright their future looks and see what your poll says. I’d be shocked if only 22% thought negatively about their future. The people who really want to leave this country now are people who haven’ travelled much out of Russia.
 
Couple of other things regarding this; firstly, Russians have, from their Soviet past, a more pessimistic view on things in general than people in the West which is why I’m not completely surprised by the polls and surveys you have posted. Secondly, while there are some young entrepreneurs who want to leave, the vast majority who I talk to about leaving are females (and it's still a small number comparatively speaking). Why? Not because they don’t like it here, have terrible lives or no opportunity for careers. It’s because they have very little opportunity for love and starting a family.
 
Lastly, many Russians romanticize about life outside of Russia, but this is changing too because as more of them travel, more of them realize that things aren’t exactly what they thought when t hey actualy saw things for themselves. One example is a business acquaintance who just returned from a 2 week stint in London and what he had to say about it. Before his trip he went on and on about going there, seeing this and that and how excited he was about his trip. Now he says you couldn’t pay him enough to leave Moscow for London. 
 

A recent opinion poll by the Levada Centre shows that 22% of Russia’s adult population would like to leave the country for good. This is a more than threefold increase from four years ago, when only 7% were considering it. It is the highest figure since the collapse of the Soviet Union, when only 18% said they wanted to get out. Those who are eager to leave are not the poor and desperate. On the contrary, most are entrepreneurs and students. When a country is losing its entrepreneurs and students the situation is bad.

Again, stand outside any University in America and poll the young people there about anything from their future, Wall St, the Government, defense spending, the war in Afghanistan and Iraq, etc. and see how those numbers reflect from four years ago.
 
I don’t take polls that seriously, yet I’m sure some young people in Russia would like to leave. I just saw a news report on the BBC suggesting that a huge number of young people want to leave Spain. Why? Not because it’s a bad country, on the contrary, have you been there? It’s a beautiful country with a rich culture, but there’s no work and unemployment is over 20%.

Chivo you say that it is foreign investment capital leaving Russia? Perfectly true it is a massive amount of foreign investment capital leaving Russia, in addition to the massive amount of domestic capital. Unfortunately Russia needs that capital and far more if it hopes to build the needed infrastructure to update their economy. If President Dmitry Medvedev dream of building a Russian Silicon Valley is to come true foreign investment in Russia will have to be in the tens of billions of dollars.

There are many reasons foreign and domestic capital leaves a country. And capital flight can take many forms. Would you consider outsourcing jobs to another country as one form of capital flight? I would. Yet America has done this to the tune of billions of dollars over the years at the expense of the American worker.
 
Movement in currency exchange rates is another reason why capital leaves a country and Russia has a fluctuating currency (it has gone from 33 to the dollar to 29 in less than a month recently, that’s over a 10% move for those keeping score). It is an emerging economy. Rich Russians can leverage their money elsewhere, especially in favorable currency fluctuations, invest in another country and then cash out and return the money back into the country when the exchange rate is more favorable and make money that way. Many Rich Russians do this. Happens all the time in many countries around the world. Fact is it would be misleading to look at capital flight in set terms because it takes on many forms within/without all countries. Not just from unstable governments, even though this is one important factor.

Unfortunately Russia's long-standing finance minister, Alexei Kudrin doesn't believe that the Kremlin is heading in the right direction and quit in the beginning of September, something the Russian markets and international investors didn't like. Foreign capital investment in Russia isn't going to increase any time soon and if the anticipated recession occurs, Russia's one trick pony economy of oil and natural gas will mean cuts in every area of the economy no matter what Putin or Medvedev wants to do.

http://www.economist.com/node/21528596

http://en.rian.ru/business/20110617/164684229.html

Kundrin quit partly because he disagrees with some policies, most notably defense spending. The real underlying reason is that he was under the impression he would be the next Prime Minister of the country. He and Medvedev don’t exactly see eye to eye on things and there was a power struggle between the two and he lost, plain and simple. He was bitterly disappointed that Medvedev will be the new Prime Minister instead of him. And while well respected he is but one man. Ask ten economists about the future of the USA and believe me you’re likely to get ten different answers on what direction the economy should go.
 
I disagree with your assessment that foreign capital will not increase and relatively soon. Russia is looking more towards China and India for its future investments and less towards the West, although Western investment will always be a given and Europe represents almost half of all current trade in and out of Russia.
 

Mergers and acquisitions by Multinationals is as strong here as anywhere in the world. Pepsi just signed a contract for 1 billion dollars over the next 10 years with its takeover of Wimm-Bill-Dann, Total’s purchase of Novatek to expand its presence and Unilever just acquired Kalina a local cosmetic giant making Unilever the biggest cosmetic company in Russia, so I guess they seem comfortable with the business climate here. And that’s just to name a few of the many companies entering the market or expanding here.
 

Western companies continue to enter and/or expand their businesses. And many now have the ability to operate under “their” terms and have more control with how their money is spent and who’s pocket it goes into.

I’m not here to tell you Russia is the greatest place in the world. Far from it, but let’s not go overboard with the negativity either. To you and anyone who seem to want to compare this country to America, England, Canada, Europe, etc., get a grip. It’s not apples to apples. You cannot compare emerging economies to established ones, although many here on this board love to do it.

Russia has come out from under a Communist regime/mentality for only the last 20 years and the first 10 were utter chaos. The mentality has been changing over these years and continues to change. Unfortunately “old school” Soviet mentality is still alive and well, but it too is slowly dying off. And it might take another generation for things to really take root.

I see it happening before my eyes now. Russians refusing to pay bribes to get things done and I’m talking about influential Russians, young influential Russians. Foreign businesses are able to operate under their ‘roof’ and not a Russian ‘roof’.

Russia is a semi-autocratic country and Putin has to answer to others as well. He is not the all be, end all governance here although he obviously wields a lot of power. He is also more of a politician now than a KGB colonel. I think he has grown with the job so to speak, meaning he’s not the same guy he was 12 years ago. And he has done some good things over the last 10 years that go unnoticed or are overshadowed by the negative and/or his reputation.
For example;

From 2000 when he took over to 2008 Russia’s real GDP doubled. The percentage of the population with incomes below the subsistence level dropped from 28-30% to around 10-14% depending on whose findings you research. The life span of people (men and women) has increased from 65 to 69. In 2009 the birth rate exceeded the death rate for the first time in 20 years. Pensions although ridiculously low still managed to increase 12 fold from 521 to 6177 rubles.

Consumer credit has increased tremendously, industry grew 75%, and investments grew 125%. Real income doubled and the average salary increased 800%. Purchasing power for the average Russian increased 250% from 2000 to 2009. Russia has also accumulated the 3^rd largest gold reserves during this time (meaning in respect to the last 10 years not overall) and has managed to overcome the nightmare and recover much that was during the 90’s.

Putin as President also signed into law a flat tax on individual income of 13% down from 24%, unified social tax reforms of revenue and sales tax that reduced over all taxes at the time 70%. Rome wasn’t built in a day and there are things that need to improve obviously.

Russia needs to realize its vast agricultural potential to the world, especially Africa. Invest in its infrastructure, diversify its economy (which I think it’s beginning to understand and do), decrease the time it takes and lower the restrictions for new small business start-ups. Invest much more in medicine, education and technology and legalize its corruption like America has.
 
I also think part of the problem is Russia's reputation in the world. But, it comes from both sides meaning yes, in the past it was much deserved, but other countries need to 1) look in the mirror, and 2) move on from the past.
 

 

[milesaweek]

Thanks for the perspective- well reasoned and presented.

[chivo]

You're welcome. 
 
Here's another perspective of things from another who like me believes this country's future is not what others would like you to believe. A very interesting read, yet I would have liked a longer story as it left me wanting for more.
 
http://www.themoscowtimes.com/business/article/qa-steering-the-gazprom-of-the-us-in-russian-waters/447563.html

[acctBill]

The people who have wanted to leave Russia have already left. If someone really wants to leave there's nothing stopping them. Getting out of the country is quite simple. But I'll ask you this, where in the world will a Russian have a better opportunity than in Russia unless he/she can transfer outside of the country with his current job?
 

Chivo I don't know how many young people (under 30) you talk to but if my inlaws and their children are any indication the current generation and the next are going to be leaving Russia in droves.  Some of my inlaws' children are graduating soon and are looking to Europe for grad school.  These children see a Russian undergraduate degree and a graduate degree from a good European university as a key to a good job in the west.  Most of these kids are near fluent in English with many also speaking other languages such as German and French.

As for where in the world a Russian find a job that will accept their skills what about the millions of Russians already working in Europe?  Chivo look at the UK, there are hundreds of thousands of Russians living legally in the UK.  An accountant from Russia can with some retraining transfer their skills to the UK, London is full of Russians working in the business world, most using skills learned in the FSU.  What about RWD member Lily?  I believe she emigrated to Canada from Russia recently.

What about Germany?  Germany probably has more FSU citizens than any other western country.  I've met and worked with many Russians in Germany and other cities in Europe.  Again most of these FSU citizens are using skills learned in the FSU, be it engineer or hairdresser, accountant or cook most are doing well in their new countries and few want to return to their homeland except for visits to relatives and friends. 

Of course many of the older FSU citizens are leaving the FSU not just for themselves but for their children.  London schools at all levels are full of children speaking Russian.  My daughter never lacked for someone to speak Russian to at school.  Many times the challenge was getting her to practice her English.

I really worry that if Russia continues on its present course it will become a failed state in a generation or two.  Russia under Putin believes that it is other countries that should make the first move when it comes to trade and international relations.  Russia wants to appear to be in control, to have the dominant position.  What the Russian government fails to realise, is that Russia has negative population growth and that there are almost 7 billion non-Russians that Russia must learn to deal with.  Like it or not, regardless of all their oil and gas, Russia needs the rest of the world far more than the rest of the world needs Russia.