Where the money is
Will Russia continue to be a growing market for imported fruits (and vegetables)? One USDA official here in Moscow told me that the country currently derives some 70% of its income from oil and gas. As long as oil and gas are trading at high levels - and that scenario doesn't look like it will go away anytime soon - Russia's economy and consumer spending figures to trend higher. The long term question is whether Russia can use oil earnings to diversify its economy and fend off a rocky landing if markets reverse.
What about domestic production of fruits and vegetables? Again, it may take Russia many years to develop its fruit production capabilities; growers are seeing huge profits on grains and oilseeds and putting "long money" - money that won't give a return on investment for 7 or 8 years, as in capital to develop orchards - just isn't overwhelmingly attractive.
However, one reality that still rears its ugly head is corruption among government officials. The average number of signatures on an official document is an astounding 27, and officials can and do extract bribes from that leverage. That is frustrating to both exporters and Russian importers, I've been told this week.
I won't get into all my observations, but suffice it to say that it has been a good week of interviews (thank you Ksenia), and The Packer will publish a few special focus articles on Russia in the next few weeks.
Labels: FDA, Ksenia Evdokimova, The Packer
posted by Tom Karst @ 2:59 PM
1 Comments:
Just to add to your report add item from the NY Times.
February 16, 2008
Medvedev Pledges Reform in Russia
By C. J. CHIVERS
MOSCOW — The presumptive successor to President Vladimir V. Putin presented his platform for seeking Russia’s highest office on Friday, giving a speech before business leaders in Siberia in which he vowed to continue Russia’s economic revival but also struck markedly liberal notes.
The speech by the candidate, First Deputy Prime Minister Dmitri A. Medvedev, was a contrast to the public appearance only a day before of his sponsor, Mr. Putin, who was confrontational and sometimes caustic in what the Kremlin had billed as his final news conference as president.
In the news conference on Thursday, Mr. Putin had sharply criticized the West and the United States, threatened to aim strategic missiles at Europe and said that Russia would develop its own, state-centered brand of democracy without instruction from outside.
Mr. Medvedev, speaking in Krasnoyarsk, a city near Russia’s geographic center, spoke in softer tones, addressing Russia’s middle class and small business owners and embracing Western themes.
“Freedom is better than non-freedom,” he said in his opening remarks, according to a transcript provided by his campaign. “These words are the quintessence of human experience.”
Mr. Medvedev, a young protégé of Mr. Putin, then expressed the notion more fully.
“The talk here is about freedom in all of its manifestations: about personal freedom, about economic freedom and at last about freedom of self-expression,” he said. He added, “Freedom is inseparable from the actual recognition of the power of law by citizens.”
Mr. Medvedev is the all-but-unchallenged front-runner in the presidential election set for March 2, and seems certain to inherit the formal reins of power from a president who, his critics say, has extinguished many elements of personal and political freedom in Russia, and rolled others back.
Mr. Medvedev faces three weak candidates who critics of the Kremlin say have been allowed to run by Mr. Putin only to create the appearance of a contest. A poll released Friday predicted that Mr. Medvedev, who has been endorsed by Mr. Putin and is receiving lavish official support, will win 80 percent of the vote.
Mr. Medvedev’s declarations about the universal values of freedom in an election that is being stage-managed and in a speech before state journalists who are largely under the Kremlin’s sway immediately raised eyebrows among analysts and diplomats in the West.
But Mr. Medvedev pressed on, issuing an implicit and broad indictment of Russia’s current state of civic affairs in which he moved past the economic and political successes of Mr. Putin’s eight years in power and focused on the country’s deep and enduring problems.
The courts, he said, are riddled with corruption. The state bureaucracy is weighted by indifference, predatory officials and bloat. And Russia’s business climate has been smothered.
“It is necessary to change radically the ideology of administrative procedures dealing with starting and holding a business,” he said. An overhaul was required, he added, “to give realistic chances for the development of small business, which are drowning today in a swamp of official indifference and bribes.”
Mr. Medvedev’s picture of Russian society and its government veered from the rosier account provided by Mr. Putin at his final press conference before leaving office.
Mr. Putin had said, coolly and directly, that his administration had had no major failures during his two terms.
Analysts suggested that Mr. Medvedev’s speech should not be taken at face value.
Under Russia’s Constitution, Mr. Putin cannot seek a third consecutive term. Mr. Medvedev is Mr. Putin’s personally selected successor, and Mr. Putin has said that he will serve as Mr. Medvedev’s prime minister and plans to wield power and to influence Russia’s course for years to come.
“Medvedev in this speech and in previous speeches has been enunciating liberal themes, and that’s encouraging,” said Cliff Kupchan, a director at the Eurasia Group, a global risk consulting firm based in Washington and New York.
“But we have to remember that this entire campaign is being run by Putin, and Putinism — broadly meaning a large state role in the economy and an assertive foreign policy — is not going to change soon, because Putin is not going to leave the scene.”
Mr. Kupchan suggested that Mr. Medvedev’s candidacy, and the message of his platform, had been chosen by Mr. Putin and the Kremlin’s political elite because improving Russia’s reputation suited their needs.
“An image is being created for Mr. Medvedev that will smooth the way for Russian investors to invest abroad,” he said. “That is very important to the Kremlin.”
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