Russian Economy and the IMF
Here is a subjective summary of all of the information that I dug up on the Russian economy and the IMF through a ton of web surfing and a walking reference library.
I have to say Wow! I learned quite a bit about the situation that Russia is in. The first bit of information that I ran across is that the IMF is forcing the Russian Government to come up with a balanced budget. None of this mamby pamby definition of balanced that our Government is so fond of. The IMF has kicked the unbalanced budget back to the Russian Government a number of times. The latest time was because the they included loans in the budget that they haven't received yet.
The second piece of information is that the Russian Yearly Budget is less than one weeks worth of our budget. IOW, they are balancing a budget less than 1/50th of ours. dailynews.yahoo.com
The third piece of information is purely my impressions of the entire IMF dealing with Russia. In a few words, the IMF is forcing the Russians into a very western economy, the Russian Government seems to be quite willing to go there, and after thinking about it, it seems to be the only real choice they may have, but it is going to be PAINFUL.
I got that impression after about 8 hours of scanning imf.org and numerous news articles, so unfortunately I don't have any good articles pointing at that, you'll have to do that research yourself.
Right now there is a very vicious cycle going on in Russia. Many of there citizens are quite used to paying there way through life with labor. Many are trying to offer their services for the Government owned utilities they use and for the Russian taxes. While that is good in spirit, it means that the Government doesn't have enough money to pay it's own workers. But that is okay, the government was getting loans from the IMF. Unfortunately, Russia has a terrible problem with corruption. The IMF has had a hard time trying to find out where a $10 billion dollar loan went to.
I can't say I find a lot of fault in the corruption, after all, no one was being paid for coming to work. Now the IMF has put a stop to the loans and the Russian Government is desperate to complete a budget before they run out of money.
Along with the balanced budget, the IMF wants Russia to stop the corruption and get the tax collection in gear. Seems logical, but you have to keep in mind that a majority of the Russian population (the military, the elderly, and the poor) wouldn't mind seeing a return to the old ways of Communism. Or even worse, a return to anything but the current system. This is something that the US and the rest of the G7 would probably like to avoid. And in order to avoid it, you have to make sure that the current Russian government doesn't go bankrupt. Yet you can't just give them money, because it tends to disappear, you have to use the money to help them change.
More tidbits of knowledge.
In 1997, we import about 5 billion and export about 5 billion from Russia. We import 7 billion and export 5 billion to Israel. We import about 7 billions and export about 20 billion to The Netherlands. Delaware exports about 4 billion a year to the rest of the world.
Wrigley Opens $70 Million Russian Chewing Gum Factory. dailynews.yahoo.com
So...
What does this all mean to HGRM? IMO, If Russia can enforce the collection of taxes by spending 50 cents for each dollar of taxes they will probably be better off for it.
The jobs/trade brought in to Russia with the hologram plant will make a significant impact on Russia's trade with the rest of the world.
1st year = 130, 2nd year = 260, 3rd year = 520, 4th year = 1040?? This is a huge portion of the Russian budget. Big enough that we might see some news articles mentioning it from the Russian point of view (as opposed to the HGRM point of view). I would think that we will get some great international attention from this.
Jim "with his fingers tired" Burnham |
