Big players in the public finance sectors have issued warning that Russia’s economy is in a bullet-speed deterioration. Sanctions from the West are still very much strictly enforced, banning all Russian goods from exports and banning foreign goods from imports. Saudi Arabia dominates the oil market. It does not help that Russian President Vladimir Putin has involved the country in the war against ISIS in Syria, sending expensive missiles and throwing millions of its budget down the drain.
According to a report from The Telegraph, financial analysts at the Standard & Poor have repeatedly expressed warnings that Russia’s deficit will be bloated to 4.4pc of GDP this year. This figure includes deficit in the local government and spending in social security. The Stockholm International Peace Research Institute said Russia’s obsession to war in Syria and Ukraine is devouring the country’s military budget. The country will also see a significant spike in military spending this year by 15pc which resulted from a 60pc surge in arms purchase.
Lubomir Mitov from Unicredit told The Telegraph that Russia cannot afford to run more deficits in the coming day. Its funds will be exhausted in the next sixteen months on Mr. Putin’s current policy of isolation. Russia’s central bank had been warning the same, saying that Russia is already at the “risk scenario,” adding that “under these conditions, GDP could fall by more than 5pc in 2016.”
Russians are feeling the looming poverty. According to statistics from the U.S. State Department, seen by the ValueWalk, there are 265, 086 Russians applying for “green card” in 2015. There are also 245, 638 Russians who sought permits to study or work in the U.S. in 2014. There are already 3622 Russians who were given permanent residency. This is twice as much as the average number over the last ten years.
At the rate at Russia’s economy is falling, Vladislav Inozemtsev, from the Center for Post-Industrial Studies in Moscow, is predicting that the country will divert back into autarky, completely withdrawing from the international community. “This way leads us towards a quasi-Soviet economy detached from the world and, at the same time, proud of its autarky; towards a deteriorating economy which compensates for the drop in living standards with pervasive propaganda,” Inozemtsev wrote.
Mr. Putin remains adamant, saying the Russia will rise up to the challenge and will indeed become a country that is self-reliant. “Our policies are not frozen. They adapt to circumstances,” he said. And through enough, he had everything fashioned under this goal.
On Oct. 19, for example, Mr. Putin told a State Council Presidium meeting that Russia’s fisheries industry will soon supply high-quality fish products to the domestic market. To achieve this, the industry will have infrastructure projects in the fish processing sector and shipbuilding for the industry’s needs.
In the meeting, Mr. Putin highlighted that three quarters of Russia’s fisheries industry is based on its own marine resources. Russia is in fifth or sixth place in terms of fishing catch volumes over the last years. However, good catch are being exported in other countries and what was left in the local market are imported and rather expensive products, not all of them good quality, and in some cases they are artificial products rather than the real thing, the president said.
If Russia continues to export its fishes, other countries get not only its best fish species, but also opportunities for creating new jobs and developing their economies and the processing industries, Mr. Putin outlined. “But neither Russia nor its people can accept a situation when the range and price of fish on the domestic market is decided by foreign suppliers and retailers,” he said. Hence, Mr. Putin sees it is only wise to modernize Russia’s fishing infrastructures. “It is clear that we must build our own modern, high-tech trawlers,” for the benefit of Russia first and make export a second in the priority only.