12/11/2014
Currency has lost 45% of its value against the dollar after the escalation with Ukraine
The economic crisis in Russia, despite «ruble» fester float
In an unexpected move, the Russian Central Bank announced that the floating ruble exchange rate to stop bleeding after losing 45 percent of its value against the dollar almost since the crisis with Ukraine. the step came a bit late, but according to experts guarantee the preservation of tens if not hundreds of billions of dollars of Russian cash reserve, which can be depleted by pumped into markets to save the Russian currency retreats without prejudice of further deterioration in the value of the ruble. Russian reserves during the past 11 months has dropped from 510 billion dollars a year to 400 billion now, the losses were largely caused by trying to save the national currency from declining in the face of international currency, those endeavors were regarded by some as a desperate effort to halt the deterioration of the ruble.
Now beat that voice of reason on the senses and phony nationalism of the Russian Central Bank decided to leave for the ruble, and set its value through supply and demand, step means some further decline expected in the value of the ruble, but it at least guarantees the preservation of the national monetary reserves without the loss of both. And for the ' economic ' attached Bernard Willis, Director of the Office of the ' financial times ' former British in Moscow saying, ' come to the last step better than does come, the market has welcomed the decision of the Russian ruble's value rose more than 3.5 percent, but temporary rise won't last, because the causes of decline of the ruble in Russia '.
While some believe that the deteriorating economic situation of Russia now goes back to the first two factors is European and American sanctions imposed on it by the Ukrainian crisis, and the sharp decline in oil prices, which reached nearly 25 percent during the last four months, the other international economists look at the issue from a different perspective, Professor David Neal in the Russian economy and for a number of Western investors in Russia, there is no denying the impact of international sanctions and falling oil prices, but points out that the Russian economic crisis Started long before international sanctions and lower the price of a barrel of oil.
Professor David Neil confirms that Russian development paradigm according to internal data is full of gaps, and the Ukrainian crisis angered Washington and Brussels from Russian positions and lower value black gold showed the system triggered by faults and not created, Professor David focuses on three factors as inherent in the structure of the Russian economy and bears responsibility for the crisis, saying to ' economic ': ' there is a structural weakness in the structure of Russian institutions, as well as in the economic environment, Russia was ranked 133 of 144 States regarding competitive in 2012-2013, and possesses a deadly combination of Moscow Lack of transparency and corruption, ranking first in corruption, compared with countries with a similar economic level. But ahead of Uganda and Togo in levels of corruption which has become an integrated enterprise plays an important role in determining growth rates and income distribution ' and adds ' second tight opportunities economic ascent, in some specialties, , About 50 per cent of the experts wish to emigrate, and this trend is not only the basic structure of creative forces, a cornerstone of the modern economy, but dangerous, they lead to lower domestic consumption because they are high earners in society, the most serious a factor for the reluctance of foreign investment because the cost of obtaining high expertise in Russia over time becomes costly and increases budgetary pressures on the foreign investor '. According to Professor David the third reason stems from two factors, is the correlation between oil production and economic system which is considered an inevitable result of the failure of the Russian economic system in the development of alternative sectors while the heirs of the Soviet system of industrial structure in many areas.
The mounting economic crisis facing Moscow started their features stand out in a number of behaviors by the Kremlin, interpreted by some as a proactive attempt by Putin to put pressure on domestic capital and senior Russian capitalists for not taking the positions of ' weak ' and non-supportive of his vision as worse. The greatest fear of the Kremlin lies in the flight of domestic capital, and authorities have arrested the Russian billionaire Vladimir on charges of money laundering, the man, according to Forbes ' magazine ranked No. 15 among wealthy Russia, he raised a lot of noise even in political decision-making centers, where the Russian economy Minister expressed his frustration. Many experts believe that the move is a clear message to all business not affected by suspicions that grip has relaxed even in the economic crisis.
Indeed, the current situation and the financing capacity of the Russian Government over the periods of economic recovery, led by master of the Kremlin to embrace more economic measures of his supporters at the expense of the business. Putin's electoral base, the State employees, already have increased allocations to the Ministry of defiance and other sectors of the economy of the State by about 4 per cent of GDP in the budget next year is worth $ 80 billion.
And for the ' economic ' John Kay in the European Bank for reconstruction and development, said: ' the Kremlin to increase public-sector allocation procedure does not take into account economic efficiency calculations but favors politics over economics ' and adds, ' may be the amount of the Russian suppression of domestic capital and blackmailing to pump more investments in the domestic market, there is no doubt that this will give the kiss of life, but will remain in a State of weakness and vulnerability, it would not be able to exercise this kind of pressure on international investment, and withdrawal of Foreign investment would send a negative message on the nature and depth of the Russian crisis, and the process of restoring confidence is a costly, not only economically, but also politically and is the price Putin does not want to pay now '.
It is likely that overlap the economic and political workers in Russia a dense also represents one of the main challenges that impede the process of confrontation and get out of the economic crisis, according to that vision in the economic development and rush moments to promotes high growth rates from the State, either when you start problems between the State and the outside world in the emerging economy to suffer sharply, a company like BlackBerry Aston (asset management company in the world, estimated at a value of about five-trillion dollars, and the company recently participated in an exploratory session Held in London under the chairmanship of Sheikh Sharaf Al Hariri to identify prospects for investing in the stock market in Saudi Arabia under new laws) and Adobe software have denounced the Russian markets.
Likely the most economical of Russian crisis will deepen unless in the coming period and severity, but almost everyone agrees that Russia still possesses many of the cards, which will enable it to stay on the major economies in the world, a financial reserve of $ 400 billion would certainly without touching the bottom. However, the cash reserves were enables it to respond to the crisis, either out of them and restore the previous momentum requires more, specifically new developmental pattern deals realistically with the strengths and weaknesses of the Russian economy, and allowing for local markets and investors and foreigners to move in accordance with the laws of the economy away from interventions and temporary needs for politics and politicians.
