Millions more Russians living in poverty as economic crisis bites
. . . skyrocketing poverty, and shocking economic decline driven by the sudden decline in oil prices. "An average of 19.2 million Russians – or 13.4% of the population – were living last year on less than 9,452 roubles ($139) a month, the minimum subsistence level determined by the Russian government in the fourth quarter. This figure represents a 20% increase year-on-year, with an average 16.1 million people living below the poverty threshold in 2014." Ouch, this is terrible. Millions of people slowly falling into desperate poverty. "Russia’s energy-reliant economy shrank by 3.7% in 2015 and is set to continue suffering this year. In September, the World Bank warned against a “troubling” increase in poverty in Russia resulting from a sharp drop in the income of the most vulnerable social groups including pensioners. Prime Minister Dmitry Medvedev conceded in January that increasing poverty was “one of the most painful” consequences of the economic crisis. Real wages in the country shrank 6.9% last month in comparison to the same period last year. Retail sales were down 5.9% last month year-on-year. Russia’s newly-founded rating agency said Monday it did not expect economic growth until 2018." The only reason it expects economic growth in 2018 is because that date is so far off there will be plenty of time to down grade later. Russia has a commodity economy. What we forget is that at the end of the Soviet period, the reason for the collapse was that the people in power in the USSR realized that the nation was taking valuable resources, and commodities, adding labor, and creating something with less value than the resource, and commodity inputs. Let that sink in. They were taking valuable things and making them less valuable through manufacturing. This was a shocking conclusion, but undeniable. That left two courses of action, one was to improve manufacturing, which would have taken decades, and billions in hard currency, which Russia did not have, or stop manufacturing, and switch the economy to a resource, and commodity economy. They chose the latter. Many Russians were impoverished, but the economy turned, and the poverty rate slowly fell, and Putin emerged, and became essentially a dictator, running a Mafia like state. Now faced with the existential threat of low oil prices, Russia is without recourse. It cannot cut out manufacturing. It does not have manufacturing to build upon, and the economy is tanking. This is the outcome of failing to embrace the free market economy, with republican governance, and reformed religions. Here at the End of History, we know what works, and we know what does not. Good luck Russia, you will need it.
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China Howls but Dalai Lama Draws Crowd at Human Rights Talk
. . . no, not the Dalai Lama, silly, China! China today has some residual power driven by its status as the worlds largest manufacture of plastic trinkets, and iPhones. But not much as it is beginning the collapse of its myriad Ponzi Bubbles. IMF issues warning on global growth as China exports plunge - FT.com The IMF is correct to worry about China, but wrong to think that a little consumerism can right the economic ship of China. China is a massive debt Ponzi, construction Ponzi, Ghost cities Ponzi, infrastructure Ponzi, bank Ponzi, to name but the larger few. China cuts growth forecast - FT.com This is mostly blather, and bluster. It is impossible to trust these numbers, and from what I have seen, the backing internals do not support GDP growth of 6.5% and may not support GDP growth of even 3%. Nor do I see any of this changing over the next many years. I have no crystal ball, but the world has achieved peak Socialism in Japan, Europe, China, Russia, and much of Eastern Europe. The results of this are demographic decline, an aging population, business stagnation, and economic stagnation. The feckless, dithering politicians who cannot take the steps necessary to shift from the dying Socialist/progressive economic model to a new functional economic model, will not be savior in this scenario. I suspect this ends with the following cue card,"And a hard landing was had by all!" Huzzah! Huzzah! Huzzah! The Dalai Lama only needs to wait out the rapidly weakening China to win this one. What that win will look like is anyones guess, but let's hope, and pray for something less "interesting" than a full on revolution in China. Perhaps China could learn from the late 20th Century Russian revolution, and make it relatively uneventful? Yeah, I think that's mostly wishful thinking too, but I am sticking to that wish, since it would mean fewer casualties. Perhaps the CCP survives these rough seas, Perhaps not. Regardless, nothing will be the same for the CCP and its leaders. Once the China Colossus feet are revealed as made of clay, it will never be viewed the same. And once it cracks, and the little mouse inside wanders out, it will return to its appropriate place in world events. |
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