The Maryna Roscha Ramstore in Moscow
Five Million Families in Russia Earn Over $30,000
Kommersant, September 6, 2007
Five million families in Russia annually earn more than $30,000, according to the report of
Rosgosstrakh insurer. The number grew by over 60 percent over a year.
Given that the family size averages 2.7 persons here, roughly 13.5 million have the income above the medium one. Besides just wealthy, Russia has 160 families that are the millionaires in terms of the U.S. dollars and 12,000 families have revenues above $5 million. It isn't surprising that 80 percent of millionaires live in Moscow and in the Moscow region.
The wealthiest category of the Russians (revenues above $5 million) widened by a half past year. The families with revenues of $30,000 to $100,000 manifested the highest growth of 71 percent.
Click on this link to read the full story. Click on the extended post to read excerpts from coverage of the Russian economy by Reuters and the Wall Street Journal.
Moscow at night
Russia, from bust to boom. What now?
By Douglas Busvine
Reuters, September 7, 2007
MOSCOW - Russia has gone from bust to boom in less than a decade to become one of the world's most dynamic emerging markets.
Since the devaluation and default of 1998, Russia's gross domestic product has surged to $1 trillion, its economy is growing at a clip of over 7 percent and an expanding middle class is enjoying prosperity unimaginable in the Soviet era...
Outside the resources sector, business is booming. Mobile phone companies MTS (MBT.N:
Quote, Profile, Research) and Vimpelcom (VIP.N: Quote, Profile, Research), whose CEOs will speak at the Reuters Summit, have just posted second-quarter earnings up 72 percent and 84 percent respectively.
Wimm-Bill-Dann (WBDF.MM: Quote, Profile, Research), Russia's leading dairy produce company and another Summit guest next week, has announced a 40 percent gain in first-half sales. All three companies are eyeing acquisitions in other ex-Soviet states.
Banking has been booming too, although the U.S. subprime mortgage crisis has triggered a
liquidity squeeze in Russia. The central bank has kept banks afloat by pumping in ready cash, but it is too early to sound the all-clear.
In 1998, the central bank's vaults were almost empty. Now it has accumulated over $400 billion
in reserves, the world's third largest, enough to ride out a big financial shock.
Click here to read the full story from Reuters.
Russia Increases Growth Forecast For Hot Economy
By Lidia Kelly
Wall Street Journal, September 7, 2007
MOSCOW -- The Russian Central Bank raised its economic growth forecast for this year,
underlining the resilience of the current boom in Russia despite turmoil in global credit markets.
Central Bank Deputy Chairman Alexei Ulyukayev told a conference that gross domestic product
should grow 7.5% this year, up from an earlier growth estimate of 6.5%, and above the recent forecast of 7.4% from Economy Minister German Gref.
The economy grew 7.8% in the first half of the year, according to official data, mainly driven
by investment spending growth of more than 20% for the year and consumer demand, spurred by the increase in disposable income.
Mr. Ulyukayev also echoed Mr. Gref in saying that consumer prices won't rise by more than 8% in 2007, the lowest annual rate since the breakup of the Soviet Union.
Click here to read the rest of the story at WSJ.com (subscription needed).
Told ya so!
Lois White Buffalo
Gee, if this keeps up, they will need to lower oil exports for the furthest markets in favor of local markets including allies and Russian internal consumption. And guess what? That very act raises world energy prices, thus feeding the CIS recovery cycle.
For years I have noticed the patterns of the INVERSE SQUARE LAW in oil consumption and economic activity.
See http://en.wikipedia.org/wiki/Inverse-square_law
But basically what we are seeing is similar to RF, optical, gravity, or acoustical patterns of energy strength with relation to DISTANCE.
At the center of Moscow, the place where Russian oil wealth has it's center of gravity, it is at this point where the economic activity is similar to say the SUN. As you increase the distance, economic activity diminishes. But it's not just about oil and gas. Take note, Saudi Arabia has more energy exports. But the other major oil exporters don't have the kinds of engineering, manufacturing, IT, other resources (forestry, titanium, aluminum, uranium), space exploration, weapons manufacturing, aviation, and so forth.
Russia and the CIS are seeing far better gains than a Saudi Arabia because of all the peripheral sectors of the economy. Maybe those sectors are old and rusty, but they now have the funds to modernize, and we see it in the balance sheet.
To that, global energy reserves are following the inverse square law. At one time, it was based on dollar hegemony, but no more. In history there was a time where the source of the dollar had the highest per capita income, and where the inverse square law with relation to dollar distance (political alignments) had it's effect of capturing global wealth and controlling governments & people. But today, ENERGY is the holly grail. And the Russian government is making sure such advantages are propagating into the general economy and to the middle class for the sake of future generations and the CIS at large.
At this point, those countries that are furthest away from energy resources will end up looking like Pluto in terms of solar radiation, cold and dark. The furthest you are away from energy reserves such as gas & oil, the SQUARE will cut your reception of energy by 1/4.
Today's Russian recovery was triggered by markets of energy and it will continue because nobody will every turn down one calorie or BTU of energy. As long as the next Russian president continues this Russian Reaganomics, then a swath of Earth from Europe, the CIS to Asia will enjoy unprecedented trade and prosperity for the next 50 years.
As the UN recently admitted, nearly every part of Earth is going to grow economically except the US. Pat Buchanan's dream of the isolationist America is now being imposed by mother nature.
Damn the math and statistics!
Russian 'middle class' is only 5 million while the population of the country is 143 MLN. 5 million doesn't even make half of Moscow. Assuming, a household consists of two persons, while male makes 20K annually and female makes 10K, it's still not enough to keep up with rising prices. And obviously not enough to afford a flat in Moscow ever. period. Oil money just pumps oil prices and cost of living is rising dramatically as well. So salaries increases don't make any extra for Russian Middle Class. Being a part of it, I can admit, my purchasing power is lower and lower every year. Again, take a look at the dollar's rate and you see those 60% increase.
Luckily soon, there'll be more and more alternative energy resources used. This will cause a crisis, resulting in brain drain of all this middle class.
Russia will remain with poor and abandoned oil towers while middle class and riches will move to London.
Chinese will find wiser use for Russian land for sure.
russia seems like a very nice place to live to make good money and some day i will like to live there