


To privatise or not to privatise

The Russian government has ambitious plans for privatisation—supposedly

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Remarkable progress in Russia under Vlad Putin,as reported in media:

'Russia Army to Retire Czarist-Era Wraps
Russia's military will retire foot wraps, or portyanki—the pieces of cloth that Russian rank-and-file have used in place of socks for more than three centuries.'


kpxoxol in reply to Yura2009

Poor Dura2009 prefer the remarkable progress his US handlers had by creating a female army in desperation because no one wants to join the US army anyways out of cowardice to be sent to serve the Wall Street interests in nice places like Afghan.

No wonder in desperation the US army had to reduce the requirement for minimum IQ to below 20 so even Dura2009 can enlist now, heh, heh, heh :D

Besides being western podloga Dura2009 never was conscripted to know by experience that the wraps keep the legs warm and dry much better than the socks and are much easier to maintain or dispose what improves the overall hygiene. It is common practice to have socks over wraps so removing the wraps is a dumb idea. I bet the Russia army will continue with the most useful wraps despite the new regulations. LOL :D


Looks like Putin's favoured game plan to solidify and expand Europe's dependence on Russian gas supply has stimulated a joint response by the EU southern members. The latest news reports confirm that Nabucco West, the EU joint gas supply diversification project, will be launched in mid-2013 with a pipeline linking the Bulgarian-Turkish border via Romania and Hungary to the Austrian gas distribution hub at Baumgarten. The pipeline’s planned capacity has been set at 20 bill. cu. meters per year, initially relying on the Azeri gas via Turkey. In the longer run Turkmenistan and Iraq are likely to be linked to the Nabucco stream. The EU consortium partners include Austrian OMU, Hungary’s FGSZ, Romanian Transgaz , Bulgarian Energy, Turkish Bota and Germany’s RWE. The current objective is to see the Nabucco West project operational by 2016. Construction of this leg of the Nabucco West will help to meet the EU objective of keeping Russian gas imports into EU countries below one third of total annual consumption. With Nabucco West undermining Putin's grand strategy, Russian Gazprom may have to reconsider its very problematic and very expensive South Stream pipeline under the Black Sea.

kpxoxol in reply to Didomyk


The still born NABUCCO poses threat only to the dilapidate Ukraine soviet era GTS.

Russia is going to build the South Stream anyways to get rid of its dependence on the orange Ukraine thievery and further reduce the Ukraine importance to the EU. Devoid of lucrative gas transport revenues the Ukraine economy will collapse and Ukraine will join the Eurazian Union in no time in order to survive. Super leader Putin is the most popular politician in Ukraine according to the pools so having him for President on Ukraine is what the Ukraine people want anyways, heh, heh, heh :D

NABUCCO have no sources - the Turkmenistan gas they expect to rely upon is already bought by Gazprom decades ahead and no one is going to allow a Turkmen gas pipeline to cross the caspean sea anyways. The Azeri gas is a joke. Iran being second largest gas producer after Russia is under EU sanctions (talking about western losers shooting themselves in the foot) is orienting its delivery to the ONLY economy superpower - COMMUNIST China. Russia also diversified its markets away from the EU towards the World economy superpowers located in Asia. The west is thing of the past. LOL :D

So the poor EU losers barely cope with the rapidly exhausting the Nord Sea gas reserves. And the EU is deep in the US-made global recession, what means their gas consumption is minimal. In a decade when the EU splits and some of the Europe economies begin to pick up, the gas demand will outstrip the current deliveries by more than the NABUCCO can deliver even if in full capacity (what won't happen).

No wonder more countries are joining the Nord Stream and Germany is in great hurry to double the Nord Stream capacity - so the EU will rely on the Russia gas a lot more than the target 33% :D

Turkey also is in talks with Russia to double the capacity of the Blue Stream pipeline, so Russia gas can be delivered via the empty NABUCCO pipelines too for great anger of likes of Dydomyk and his TE propaganda handlers, heh, heh, heh :D


Take a look at Russian reality in three cities, as shown in a photo blog:


Didomyk in reply to Maxim Ozherelyev

A timely article on how the current leadership of Russia's Orthodox Church with its excessive preoccupation with luxury cars, etc. plays into the hands of Russian atheists.


Didomyk in reply to Maxim Ozherelyev

Read Anders Aslund's latest article about "stability" in Russia:

"In late 2012, Putin launched his first significant anti-corruption campaign. One indication that the elites are scared is the sharp increase over the past year in the number of luxury villas on Rublyovskoye Shosse that has been put on sale. Meanwhile, ordinary people are getting enraged by the massive corruption within the government. In each of the six current corruption cases involving more than $100 million, one top official goes after another one, reflecting a wild interclan feud. This underscores the weakness of law and order. Putin's Catch-22 is best illustrated with former Defense Minister Anatoly Serdyukov. If Serdyukov is convicted and sent to prison, the corrupt elites will rebel. If he is acquitted, the population will protest."

Read more: http://www.themoscowtimes.com/opinion/article/9-reasons-why-stability-in...
The Moscow Times


Privatisation is undoubtedly important, but Russian foreign and economic policy in 2013 will focus on the strengthening of the alliance between Russia, Belarus, and Kazakhstan. It is referred to as Customs Union, but is likely to rebrand itself as the Eurasian Economic Union (EEU) — AKA Putin's post-Soviet equivalent of the EU.
Recently serious complications have arisen in Moscow's dealings with Kazakhstan since the country's elite began to question long term benefits of Eurasian integration's. Russia will have to seek a new formula of interaction with Kazakhstan, given that Putin appears to have taken a stand that the Eurasian project cannot be abandoned. Russia's expectations to see Ukraine join the Eurasian Union in exchange for promises of cheaper gas have so far produced no results.

Another critical issue for Russia is how to secure access to Asia's lucrative oil and gas markets that could provide Gazprom and Russian oil companies a viable alternative to European markets. The main problem is a complete lack of pipeline infrastructure despite negotiations on the construction of two gas pipelines to China that began back in 2006. Gazprom is still demanding China pay the same price it pays European customers. But the Chinese are in no hurry to sign given that alternative sources of LNG are available and in the long run are likely to be more advantageous than Russian gas.

In broad terms Moscow's main problem is foreign investment, without which mineral resources in Eastern Siberia and the Far East will remain undeveloped. Putin's Eurasian vision may yet remain just a dream.

kpxoxol in reply to Yura2009

Russia is too rich to need privatization. The one who needs to sell their busted behinds are your western handlers, Dura2009.

The western economists driven by their inherent greed and stupidity screwed up their economies and now need bail out much what the US does - begging COMMUNIST China for handouts, heh, heh, heh :D

shaun39 in reply to Yura2009

Russia could easily quintuple (i.e. multiply by 5) gas sales to Europe & East Asia if it (1) let prices fall by about 30% so that gas is reliably cheaper than coal and (2) took credible efforts to convince all trading partners that security of supply is not at risk.
What matters most for Russian prosperity, is to integrate more fully in the developed world economy. Russia needs massive investment from outside (especially EU, Japan & US) to raise productivity. Russia needs a liberal visa policy to attract professional immigrants (from EU, US, Japan & China) who know about market opportunities in the world economy (and how to market products & services to these markets; and how to source the world's best components or capital). Russia could benefit from integrating in the EU customs union (like Turkey did) - which would achieve free trade with South Korea, Singapore, Canada & perhaps Japan & the US too as well as the whole of Europe & Turkey.
Russia obviously also needs more investment in domestic human capital - the government needs to spend more on encouraging women to have kids, on education and on active labour market policies. And human capital could really benefit where Russians (students, professionals, etc) could spend time overseas, learning languages, getting technical training, learning about market characteristics, etc - so visa free travel and liberal study & work arrangements (at least with the EU) would also be enormously beneficial to productivity & living standards in Russia.
Because of customs barriers, regulatory barriers & badly designed taxes, Russia is missing massive opportunities to become extremely rich: Russia could improve freight capacity on the trans-Siberian railway, transporting very large volume of freight between Western Europe and China in just 4-5 days. This is much cheaper than flight, but much faster than shipping (35-40 days). The trans-Siberian line could easily carry a hundred billion dollars of freight annually if Russia kept charges+taxes at cost plus 3% or so. That would net a good few billion euros annually directly, and would also result in many Russian businesses setting up along the line (entrepot trading, processing, assembling, customisation, maintenance, etc).
On so many levels, there is so much that Russia's government should be doing to make Russia vastly richer. Why the inaction?

Yura2009 in reply to shaun39

I agree with the general tone of your post even though I find your specific forecasts too opimistic. The security of gas supply will always remain at issue as no one can predict foreign and economic policies of Russia's future leaders, say 20-40 years ahead. As well, we are witnessing very substantial growth in LNG supply to Europe and Asia from a variety of off-shore sources at prices competitive with the total cost of building and operating land-based gas transmission lines. You are right about the potential of Trans-Siberian rail transport but that would take at least a decade or two to show results and would require huge new capital investment. Meanwhile, the mentality of Russian leaders and the priorities of the Russian new breed of capitalists-oligarkhs need to undergo a major change. Its not inaction on their part (they do invest in banks, yachts and London flats) but rather lack of realistic appreciation of how Russia's huge resource potential should be developed to serve their country's long term needs.


"(...)by most measures of modern power, Russia is a lightweight. It has almost no influence in the world beyond some poor, backward former Soviet republics. It has no meaningful allies with whom it shares interests and pursues coordinated policies. It may be able to play the spoiler by thwarting international cooperation on Syria or Iran, but it can play no constructive role or be a broker with those nations. It is neither feared nor respected.

Most important, its economy is highly unsteady and vulnerable, as its wealth is overly dependent on oil and gas. But even in the oil and gas markets, it plays a remarkably small role in setting either policy or prices, despite being a leading global producer. Over the past 15 years, Russia has been fully integrated into the world economy, becoming a major consumer of imports, which are paid for by petrodollars. It is dependent on the relentless printing of money by major central banks, which has cheapened these currencies and created an unsustainable bubble in commodities. The 2008 crisis demonstrated Russia's extreme economic vulnerability.

Contrast this with China, which has used the global liquidity to invest and develop a powerful manufacturing economy and an enormous middle class. China, which two decades ago was far weaker than Russia, has rapidly emerged as a true superpower. China is now a major economic and political player not only in Asia but also in Latin America and Africa, where it is now the largest provider of investment capital and credit. China, not Russia, is a true U.S. partner and rival. Washington may occasionally bash China about its human rights abuses and trade policy. (...) " by Alexei Bayer - extract from The Moscow Times

shaun39 in reply to Zkx3ck4LDv

One of the biggest problems is actually that Russia has not fully integrated in the world economy.
The Russian state erects massive barriers to imports (extremely high tariffs and regulatory barriers/ customs delays). The result is that oil & gas exports cause the rouble to appreciate so high that they wipe out Russia's domestic manufacturing base.
If Russia would only open the door to imports (of modern capital equipment, and even consumer goods), then the rouble would quickly become much cheaper internationally, and there would be a boom in Russian exports.
If Russia wants to re-industrialise, and build a modern service economy, and build a large middle class, then it really should be negotiating free trade or customs union with the EU & other developed world markets (and perhaps even China).

Didomyk in reply to shaun39

Russia....."it really should be negotiating free trade or customs union with the EU & other developed world markets "

Of course, but Putin's mentality drives him and his country into the past, - like creating Eurasian custom union to be governed by the old Brezhnev era blueprint of COMECON !

As to your forecast of "a boom in Russian exports" lets take it one step at a time. First, foreign investment incentives to modernise Russian manufacturing with focus on import substitution, second - major focus on infrastructure improvements, - roads, rails, air service, communications, etc.- way beyond limited circles of Moscow and Petersburg; third - redirect billions in Russian domestic capital ( now sitting in off-shore accounts) into promising sectors where Russian producers could be competitive. All that will remain a paper concept as long as Putin and his associates are running the country.

Leonardo GM

without their 'kvatiras' there may be unrests in the ranks
"Kvartiras"? Is it ukrainian or spanish?


Russia is too rich to need privatization.

On the other hand the west needs influx of capital after the western greedy shortsighted morons demonstrate their inferior intellect and brought the western economies into the crapper hole.

Russia must join COOMUNIST China and buy the west. COMMUNIST China already owns the US. LOL :D


One particularly lucrative sector in Russia has been 'privatised' long, long time ago when Moscow was ruled by commissars. One of the most prominent personalities with a huge stake in that sector was known in Moscow as Grandpa Hassan, the mafia Don. He is now dead. Read more:


More Details here: http://www.bloomberg.com/news/2013-01-18/the-russian-mafia-is-dead-or-is...


Just because Putin signed a decree calling for the sale of all state holdings, other than in the defence and energy industries by 2016, does not mean that there will be no manipulation of the term 'defence' and /or 'energy' in actually approving private ownership in many sectors. E.g: will shipbuilding, aircraft maintenance and repair or plants like Norilsk nickel mining and refining be forever a part of the defence sector ? Surely, all Russian nuclear power plants, as well as all uranium mining and processing industries, and all turbine makers, power switches, warning lights, etc., etc, will have to remain state owned. Depending on one's definition, plants supplying military uniforms, boots and booze should also be part of the state sector. Naturally, officers will still need their private apartments for without their 'kvatiras' there may be unrests in the ranks. I am sure you can think of a few more vital 'defence oriented' sectors to be retained under Kremlin control.


In Russian property rights and the rule of law seems a quaint notion as far as the Kremlin is concerned. The idea of a state owned entity ever truly becoming private is laughable. There will always be an element of state meddling/oversight/expropriation (insert euphemism here).


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