Medvedev Informed Yushchenko about 2-Fold Surge in Gas Prices

June, 2008

Gas problem was one of the issues raised during St. Petersburg negotiations between Russia’s President Dmitry Medvedev and Ukrainian President Viktor Yushchenko, Russia’s Foreign Minister Sergei Lavrov told reporters June 6. “Gas prices for Ukraine will nearly double starting from January 1, 2009,” Lavrov said, explaining that the states of Central Asia are shifting to the European prices for their gas. “The gas from those states passes Russia’s territory and the states of Central Asia account for a significant portion of Ukraine’s gas balance. Therefore, the gas price for Ukraine will surge materially under objective reasons from January 1,” Lavrov said. The sooner we shift to the market prices, the better will it be for recovery of the country’s economy, Yushchenko said when commenting on the imminent price growth.


Money Talks at Russian Forum as Business Leaders See Past Hurdles to Investing

The lineup told it all about Russia’s importance today. There, on one stage, sat the leaders of BP, Royal Dutch Shell, Chevron, Exxon Mobil, ConocoPhillips, Total, Schlumberger and Dow Chemical, as well as the chairman of the Russian energy giant Gazprom and the president of the Russian oil company Lukoil. The busy executives of the global energy industry, by their very willingness to sit together at an economic conference here over the weekend, were sending a powerful message that big Western businesses were in Russia to stay. They may be worried about the weak rule of law, corruption and lack of an independent judiciary, as seen in recent troubles confronting BP and Shell with their Russian partners. But that is not likely to stop them from swarming around the honey pot for large contracts and access to the resources of Russia, one of the world’s largest energy exporters and fastest growing economies in an era of $130-a-barrel oil.

And while politicians in Western Europe fret over their own inability to develop a cohesive energy policy — and some fan fears of a newly resurgent, aggressive Russia — many of the sharpest minds who gathered here at the St. Petersburg International Economic Forum seemed focused on something quite different: ensuring that Russians benefit from economic plenty this time, as opposed to the heady era of privatization in the 1990s, which benefited only a few. In a speech on Sunday that was keenly awaited by liberals in Russia’s business elite, a first deputy prime minister, Igor Shuvalov, listed the “many hurdles” on this path: an over-reliance on energy exports, a falling population, a lack of modern skills, an unhealthy way of life and a state apparatus with a tendency to meddle. “Russia should be a country that people want to live in,” Mr. Shuvalov said in remarks that seemed uncharacteristically self-deprecating for a top Russian official these days. Mr. Shuvalov’s audience filled less than half of the hall. It had been packed on Saturday when the new president, Dmitri A. Medvedev, took subtle aim at the United States, suggesting that the world might be in the worst economic crisis since the Great Depression and that a revived Russia could offer solutions to problems that have underscored America’s shortcomings. But the crowd on Sunday was rapt as Russian and Western business executives peered out to make projections on Russia’s state and standing in 2020. So much has changed, so fast, in the past decade here that there is little clarity on how to proceed. As one Russian participant, Alexander V. Izosimov of the cellphone operator VimpelCom, said, “The road to hell is paved with good intentions.”

Jim O’Neill, who is the chief economist of Goldman Sachs — and credited with coining the phrase “BRIC countries” to describe Brazil, Russia, India and China becoming leaders among world economies — surprised the crowd by predicting a conservative overall average of 3.3 percent annual economic growth in Russia by 2020, down from growth around 8 percent now. Russia, Mr. O’Neill said, will have a 4 percent share of world’s gross domestic product then, compared with 2 percent now. But he said it would be weaker relative to Brazil, India and China because of far fewer people at work. India alone is expected to grow by 300 million people — twice Russia’s current population. Michael Klein, chairman and chief executive of the institutional clients group of Citigroup, was more ebullient: “The future will exceed by a big stretch the plans for 2020” — the Russian government’s target date for certain improvements. “Russia is clearly one of the most successful economic stories of the decade,” he said, and possibly “the first scale economy to sustainably avoid the resource curse,” the evils often brought by easy money from commodities like oil and natural gas. Anatoly B. Chubais, a former deputy prime minister despised by many Russians over the inequities of the 1990s privatization program he led, even broached a subject normally taboo: the moribund, regimented state of politics, which has crystallized around the Kremlin and Vladimir V. Putin, the prime minister and previous president (who this weekend left his protégé, Mr. Medvedev, to shine alone in their hometown).


Russia May Spend Twice As Much Now, Putin Said

The 2007 spending of federal budget doubled vs. 2004, having grown from 2.4 trillion ruble to nearly 6 trillion ruble in three years, Prime Minister Vladimir Putin announced Monday during the meeting of government’s presidium, RIA Novosti reported. “The spending of federal budget reached nearly 6 trillion ruble, but we could spend no more than 2.4 trillion ruble in 2004. It’s almost the double growth in actual terms,” Putin said. The costs for public health grew by over three fold during the period, the prime minister pointed out. The surge in federal budget spending was secured by favorable economic indicators of the country. Russia’s GDP soared over 8 percent in 2007, real income of the nation stepped up by over 10 percent, and the growth in tax and customs receipts was notable. “All that has created favorable environment for our budget policy, the policy targeted at long-term development of Russia’s economy, social upgrade and radical increase in quality and standards of living,” Putin said. The 2007 federal budget was the last budget of the country compiled for a year. Russia has shifted to fiscal three years starting from 2008, the prime minister reminded.


Russia’s Millionaires Number Grew 1.5 Fold in a Year

The official number of Russia’s millionaires grew over 1.5 fold during a year; the millionaires paid taxes for the total worth of 55 billion rubles, Interfax reported with reference to Federal Tax Service that released preliminary results of the tax return campaign. Russia has 131,000 dollar millionaires, the experts of Citi Private Bank and Knight Frank calculated earlier. Of interest is that the most skyrocketing growth of the wealth was reported in the section of Russia’s billionaires. The aggregate wealth of Forbes 100 billionaires of the country is nearly two fold above the budget receipts. The number of income tax returns that the individuals filed in 2007 to declare income of no less than 1 million rubles grew 67.8 percent on year, Federal Tax Service said. Some 3.2 million taxpayers (10.4 percent up on year) declared the 2007 income as of April 30. The amount of individual income tax due to the budget under the tax returns grew nearly two fold to 55 billion rubles. At the same time, the amount claimed by taxpayers from the budget increased 32 percent to 21.6 billion rubles. No secret that Russia’s oligarchs are the richest in Eastern Europe. According to the latest rating of Forbes, Oleg Deripaska ($28.6 billion) is the wealthiest in Russia, while Severstal owner Alexei Mordashov and Chukotka Governor and Chelsea owner Roman Abramovich follow him in the list of billionaires.


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Dear reader,

Arevordi will be taking a sabbatical to tend to personal matters. New blog commentaries will henceforth be posted on an irregular basis. The comments board however will continue to be moderated on a regular basis.

The last 20 years or so has also helped me see Russia as the last front against scourges of Westernization, Globalism, American expansionism, Zionism, Islamic extremism and pan-Turkism. I have also come to see Russia as the last hope humanity has for the preservation of classical western civilization, Apostolic Christianity and the traditional nation-state. This realization compelled me to create this blog in 2010. Immediately, this blog became one of the very few voices in the vastness of cyberia that dared to preach about the dangers of Globalism and the Anglo-American-Jewish alliance, and the only voice preaching the strategic importance of Armenia remaining within Russia's orbit. From about 2010 to 2015 I did monthly, at times weekly, commentaries about Russian-Armenian relations and Eurasian geopolitics in general. It was very difficult as I had no assistance in this endeavor. The time I put into this blog therefore came at the expense of work and family. But a powerful feeling inside me urged me to keep going; and I did.

When Armenia finally joined the EEU and integrated its armed forces into Russia's military structures a couple of years ago, I finally felt a deep sense of satisfaction and relaxation, as if a very heavy burden was lifted off my shoulders. I finally felt that my personal mission was accomplished. I therefore felt I could take a step back, as I really needed the rest. Simply put: I have lived to see the institutionalization of Russian-Armenian alliance. Also, I feel more confident now that Armenians are collectively recognizing the strategic importance of Armenia's ties with Russia. Moreover, I feel satisfied knowing that, at least on a subatomic level, I had a hand in the outcome. As a result, I feel a strong sense of mission accomplished. I therefore no longer have the urge to continue as in the past. In other words, the motivational force that had propelled me in previous years has been gradually dissipating because I feel that this blog has lived to see the realization of its stated goal. Going forward, I do not want to write merely for the sake of writing. Also, I do not want to say something if I have nothing important to say. I feel like I have said everything I needed to say. Henceforth, I will post seasonal commentaries about topics I find important. I will however continue moderating the blog's comments section on a regular basis; ultimately because I'm interested in what my readers have to say and also because it's through readers here that I am at times made aware of interesting developments.

To limit clutter in the comments section, I kindly ask all participants of this blog to please keep comments coherent and strictly relevant to the featured topic of discussion. Moreover, please realize that when there are several anonymous visitors posting comments simultaneously, it becomes very confusing (not to mention extremely annoying) trying to figure out who is who and who said what.Therefore, if you are here to engage in conversation, make an observation, express an idea or simply attack me, I ask you to at least use a moniker to identify yourself. Moreover, please appreciate the fact that I have put an enormous amount of information into this blog. In my opinion, most of my blog commentaries and articles, some going back ten-plus years, are in varying degrees relevant to this day and will remain so for a long time to come. Articles in this blog can therefore be revisited by longtime readers and new comers alike. I therefore ask the reader to treat this blog as a depository of important information relating to Eurasian geopolitics, Russian-Armenian relations and humanity's historic fight against the evils of Globalism and Westernization.

Thank you as always for reading.