The Russian Economic Miracle of 2017

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“Pilling from 499 rubles. Ultrasound cleaning from 599 rubles.” Photo by TRR

More Than Five Million Russians Have Trouble Paying Back Loans
Takie Dela
May 30, 2017

Around five and half million Russians have trouble servicing their debts. Their debut burden is more than 60% of their income, reports Gazeta.ru, quoting a statement by Vladimir Shikin, deputy marketing director at the National Credit History Bureau.

According to experts, this figure is regarded as a critical indicator. Among the main reasons for arrears are the unreliability of borrowers and the lack of means to finance current debts.

Residents of the Kemerovo, Tyumen, and Novosibirsk Regions are the most indebted. According to the National Credit History Bureau, three million people cannot make payments on loans, which is 8% of all borrowers. Their current debt load exceeds half of their monthly incomes.

According to Shikin, the share of overdue loans remains at 16%, even as the number of new loans grows. The majority of Russian borrowers have several loans, and the average economically active Russian owes creditors 146,000 rubles [approx. 2,300 euros].

Meanwhile, research done by RANEPA shows that the debt burden of Russians is not critical. As Natalya Orlova, chief economist at Alfa Bank, stressed, the debt of Russians is estimated at 12% of GDP.

“In developed countries, debt is 60% to 80% of GDP, so the market has potential for growth,” emphasized Orlova. However, she argues that Russia issues a relatively small percentage of mortgages, whereas in developed countries, mortgages account for nearly 90% of all loans.

Experts hope that the debt burden of Russians will not rise greatly. After the 2014–2015 crisis, banks were more way about issuing loans, so the debut burden of Russians will fall. In the near future, banks will be even more cautious. In particular, the Central Bank has planned to consolidate the data of major of credit history bureaus in a single data base to combat indebtedness.

Earlier, the United Credit reported that half of Russian borrowers had been applying for new loans to pay off old loans. According to its figures, 45 million Russians with old loans had taken new loans in banks. Over half of them had done this to pay off old loans.

The analysis shows that 53% of borrowers had taken new loans in cash to partially or fully pay off already existing loans. 27% of the borrowers had spent more than half of the new loans on paying debts.

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Almost 60% of Russians Admit They Have No Savings
Takie Dela
May 29, 2017

Around 59% of Russian families have no savings, reports Rambler News Service, citing a report from the polling and market research firm inFOM.

According to a survey commissioned by the Central Bank, the figure has remained stable [sic] the last three months. In December 2016, 64% of those surveyed had no savings.

Yet a quarter of Russians believe that now is a good time to save money, while 44% hold the opposite opinion. According to experts, the tendency to save has grown noticeably since the beginning of the year. In February, fewer than 17% of respondents answered the question positively.

The majority of respondents replied that spare cash should be saved or put away for a rainy day, while a third of Russians would spend the money on expensive, major purchases.

The poll showed that 40% of respondents prefer to keep their savings in a bank account, 26%, in case, and 20%, partly in a bank, and partly in cash.

Two thousand respondents, aged eighteen and older, from fifty-five regions of Russia were involved in the survey.

According to research by RANEPA, the share of Russians who save money dropped by a third in 2016, from 55% to 40%. Moreover, in March, 40% of Russians claimed they had only enough money for food.

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VTsIOM: 67% of Russians Skimped on Groceries during the Past Year 
Takie Dela
May 30, 2017

During the past year, 67% of Russian skimped on groceries in one way or another; 27% of them in a substantial way. Pensioners and residents of big cities had to skimp most of all. These figures were reported by pollsters VTsIOM.

The survey dealt with Russians’ attitudes to government regulation of the food market. 82% of respondents were against the idea of limiting supermarket opening hours on weekdays and weekends. According to 68% of them, if the government decided to do this, it would cause a number of problems. It would be hard to buy groceries in the evenings, and the selection would be reduced. Nearly 40% believed that limiting competition would generate price rises in small shops and produce markets.

Only 15% of Russians favored limiting competition, mostly pensioners aged sixty and older. When replying about what they thought about regulating prices for basic foodstuffs as a way of supporting the poor, Russians were divided in their opinions. Exactly half of them said such restrictions were ineffective, while 32% supported a combination of government and market measures, while 14% believed the government should solve the problem.

The VTsIOM survey showed that Russians were concerned about the government’s restricting prices for basic products. 55% said it would lead to the closure of stores, while 28% said it would lead to shortages, price gouging, and disruption of supplies. However, a quarter of respondents believed that prices would subsequently drop, and life would improve.

Russians see the government’s key role in regulating the produce market in support for domestic producers and developing farming, as well as in quality control. However, according to Yulia Baskakova, head of social modeling and forecasting at VTsIOM, “While worrying with all their heart for domestic producers, supporting improved food quality, and supporting the development of farming, Russians are not willing to sacrifice their comfort and put up with a reduction of the range of goods to which they are accustomed and its becoming less available. The survey showed that 88% of Russians are not willing to put up with a drop in their quality of lives to reduce the price of essential foodstuffs.”

The poll was occasioned by a suggestion, made by Federation Council member Sergei Lisovsky, that regional authorities could decide how large store chains should operate. Lisovky also suggested prohibiting supermarkets from opening at nights and on Sundays, and permitting them to work on Saturdays only until four o’clock in the afternoon. Lisovsky has argued that such measures would support small business and promote small-scale trade.

Translation and photo by the Russian Reader. Faithful readers might wonder why I have cited Russian opinion polls at such length after making a big effort, over the past couple of years to show that this pollocracy, while real enough as a practice, does not tell us much or anything at all about what actual Russians thinking or are planning to do.  I have made an exception in this case, however, because I think the three news items, above, show, between the lines, as it were, what really afflicts the Russian economy, and how the feigned populism of the political/economic elite rears its head, quite often in fact, to suggest impracticable solutions to the knotty problems their own mammoth corruption and instinctive hatred of small business and independent individuals generates the dead end they claim to want to alleviate by, among other thing, commissioning one “public opinion poll” after another while stubbornly failing to notice that their enthusiastic terrorizing of Krasnodar farmers, independent truckers, and Moscow street vendors show they have no interest whatsoever in small business, much less reducing the prices of basic foodstuffs for pensioners. The only thing that interests them is getting richer and making their power untouchable. TRR

They Jump on Anything That Moves

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Sergei Podgorkov, Queue for Beer, 1970s. Courtesy of oldsp.ru

Government Proposes Banning Individual Entrepreneurs from Selling Beer 
Anton Obrezchikov
RBC
November 22, 2016

Rosalkogolregulirovanie (Russian Federal Service for Regulating the Alcohol Market) plans to prohibit the sale of beer and cider at outlets registered to individual entrepreneurs. Producers argue the decision will be a blow to small business.

Several sources in the alcohol business have told RBC that Rosalkogolregulirovanie plans to ban the sale of alcohol at outlets registered to individual entrepreneurs. According to one of our interlocutors, the law “On State Regulation of the Production and Sales of Ethyl Alcohol, Alcohol, and Alcohol Products, and On the Limitation of Consumption (Drinking) of Alcohol Products” will be amended to reflect the move.

Rosalkogolregulirovanie did not respond to RBC’s request for comments.

Kommersant’s sources reported on the draft bill on Tuesday, November 22. According to the draft document, which the newspaper had seen, restrictions would be introduced nationwide on July 1, 2017, with the exception of Crimea and Sevastopol. The ban would be postponed in these regions until January 1, 2018.

Currently, individual entrepreneurs can engage in retail sales of beer, beer drinks, and various sorts of cider and mead. In addition, a separate category of entrepreneurs, those who have the status of agricultural producers, can sell wine. So far, however, such entrepreneurs do not officially exist in Russia. At the moment, only three applications for the relevant commerical license have been filed, and none of them has been approved yet.

As Kirill Bolmatov, corporate affairs director for Heineken, told RBC, Rosalkoregulirovanie’s main beef with individual entrepreneurs is that they are “insufficiently disciplined when filling out the mandatory paper financial  reporting statements.”

“Yet EGAIS [Unified State Automated Information System] completely tracks the movement of all alcoholic beverages in real time, and there is no point in filling out the statements,” said Bolmatov.

He called the pressure on businessmen “harmful,” since “beer is a large share of the turnover for small shops.” Adoption of the amendments would entail closing a large number of small shops.

“It’s a blow to small business,” he told RBC.

Individual entrepreneurs account for at least 37% of all retail outlets selling SAN InBev’s products, Oraz Durdyyev, the beer company’s legal and corporate relations director, told RBC.

“Prohibiting individual entrepreneurs from selling beer would deal a serious blow to legal small businesses, because beer is one of the high-margin products they have in stock, which helps keep prices down on goods purchased by the underprivileged,” argued Durdyyev. “Given the current economic realities, a ban like this is out of place and harmful, and could lead to increased social tensions.”

Entrepreneurs and beer companies have already faced significant restrictions on sales venues. As a spokeperson for Baltica brewing company reminded us, restrictions on beer sales at kiosks were introduced on January 1, 2013. According to the company, kiosks accounted for 20% of all beer sold. Since then, the number of retail outlets selling beer has decreased by 50,000. Over 30,000 of these outlets were kiosks and pavilions. During the period, the number of kiosks has fallen by 75%, from 30,000 to 8,600, and the number of pavilions by 24%, from 45,00 to 35,000. Baltica beer is sold at approximately 100,000 outlets registered to individual entrepreneurs, the company told us.

Translated by the Russian Reader

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The Soft Boys, “Leppo And The Jooves”

Crabwise
Over the Andalusian extensions of the life and loves of Noddy
Through the windows of disgust
The teeth of Leppo and his managers awry
No time to cry

Sunrise
A lamp of no position in the loss of all existence
To the vultures without bibles and
The preachers without leaves that pass it by
No time to sigh

All them pretty women
Planted in a row
You see them in the newspapers
But you can’t have ’em – no!
No no no no no no no no! Oh ho ho!

They get Lep-Lep-Leppo and the J-J-J-J-J-Jooves
They jump on anything that m-m-m-m-m-moves
On taxis, coffin-lids, Americans, piano-heads and roofs
Leppo…

Likewise
A farmer and his diary might conspire to freeze a widow
So I went to rob the lizard
Of his skin, his coat, his money and his earth
All that he’s worth

Someday
You realize that everything you do or see or think of
If it interferes with nothing
Might as well dissolve in arrows or in tears
Nobody hears

All them famous people
Washed off in the rain
Leave not even a puddle, baby
All you leave is your name
Huh-ha-ha-ha-ha-ha!Your name!

I got a name, baby
It’s Lep-Lep-Leppo and the J-J-J-J-J-Jooves
Oh ho ho!
They jump on anything that m-m-m-m-m-moves
Ah ha ha! Ah ha ha.
On taxis, coffin-lids, Americans, piano-heads and roofs
Leppo…

Listen
And you can hear the dripping of the clocks, the reaping of the sun
The vengeance of the hammer and
The squeamish tight explosion of the liar
Burn in the fire

Gazing
With unforeseeing eyes into the smoke, the lungs of war
And all the endless formulations of unusable beginnings that
Have grown from hungry rivers into trees
Nobody sees

All them hungry people
They don’t look so good
But I don’t let it bother you
I don’t see why it should
No no no no no no!
Oh oh ho!
Oh ho ho!

Lep-Lep-Leppo and the J-J-J-J-J-Jooves
They jump on anything that m-m-m-m-m-moves
On taxis, coffin-lids, Americans, piano-heads and roofs
Leppo…

Source: Oldie Lyrics