Russia’s Economic Slowdown In One Chart

On Wednesday, Onishchenko, the director of Rospotrebnadzor, Russias consumer-protection agency, announced a ban on 28 Georgian alcoholic products, a mere seven months after a 2006 ban on Georgian beverages was lifted. Earlier this week, he added Lithuanian dairy products to the long list of (mostly) ex-Soviet state-made products that ostensibly threaten Russian consumers. Further down on that list are Ukrainian chocolates, Moldovan wine, and yes meat from the United States. Notably, many of these bans came on the heels of warming trade relations between the banned countries and NATO or the European Union moves that arent popular with the Kremlin, which is trying to strong-arm its neighbors into joining a Russian-led customs union. Onishchenko feels strongly about the value of eating Russian food and only Russian food. At a press briefing earlier this year, he implored Russians to suppress their hankering for foreign foods in favor of food patriotism. We put our faith in the high level of consciousness and food patriotism of our citizens, the ones who have long abandoned the use of such food in their diet, he said. This food patriotism was undoubtedly at the root of Onishchenkos war on hamburgers last year, when he reminded Russians that hamburgers are not a good choice of meal for residents of Moscow and of Russia. This is not our cuisine. Onishchenko has repeatedly denied that his agencys bans on foreign products are politically motivated, but the circumstances surrounding the prohibitions suggest otherwise. Take the case of this years ban on the Ukrainian confectionary company Roshen; Onishchenko was supposedly concerned about carcinogens found in milk chocolate but only in the chocolate produced in Ukraine, not in the companys two factory locations in other countries. The ban also came in September, after a major dust-up between Russia and Ukraine over gas pipelines and in the run-up to Novembers Eastern Partnership summit, where Ukraine may sign a free trade agreement with the EU. If Kiev signs the agreement, the government will decline membership in the Russian-led Eurasian customs union. Similarly, this weeks renewed ban on Georgian drinks does not apply to the breakaway Georgian region of Abkhazia, where the products quality apparently remains stable. The reasoning behind the Roshen chocolate ban may have been flawed, but it was at least easier to understand than the vague non-reasoning Onishchenko offered for the Lithuanian dairy ban.

Russia, who have 21 points from nine matches, have qualification in their own hands before they travel to Azerbaijan for their final group match on Tuesday. Second-placed Portugal, on 17 points, were entertaining Israel on Friday. Alexander Samedov opened the scoring in the ninth minute, with Luxembourg defender Chris Philipps trying to stop the ball with his foot but directing it into the net and Viktor Fayzulin doubled the visitors’ lead half an hour later. Denis Glushakov ensured they went into the break with a comfortable lead with a goal on the stroke of halftime, while Alexander Kerzhakov made it four on 73 minutes after being set up by Dmitry Kombarov. “We played a very good match, with good speed and good desire,” Russian media quoted Capello as saying. “The Luxembourg match is in the past. We got the result we needed, played good football. “We won because we controlled the ball well, pressed our opponent and didn’t let Luxembourg play their game.” Bottom-of-the-table Luxembourg posed little threat for dominant Russia whose early opener set the visitors on their way. Luxembourg goalkeeper Jonathan Joubert got a hand to the second goal, which came after captain Roman Shirokov lofted a perfect pass to Fayzulin and he flicked it home with his left foot. Russia keeper Igor Akinfeev blocked Daniel Da Mota’s shot shortly before the break and his side put the match out of reach in the second minute of first-half stoppage time when the ball fell to midfielder Glushakov who pushed a shot past Joubert. Kerzhakov’s second-half goal was the icing on the cake and came shortly after Luxembourg had missed a tantalising chance when Stefano Bensi passed the ball across the goal only to watch in disappointment as none of his team mates could drive it home.

Russia hit four to stay on course for World Cup

While the government can boost government wages or increase pensions (as it has done repeatedly over the past several years), its just a lot more difficult for it to increase the total output of the industrial sector. Worryingly, via the always useful FRED , the total production of Russian industry has been essentially flat since the beginning of 2012. Does this mean that the whole house of cards is going to collapse? No. Virtually all of Eastern Europe is going through a period of severe economic weakness. Poland, everyones favorite post-communist wunderkind, grew by 1.9% in 2012 and is forecast to grow by as little as 1.1% in 2013. Slovakia, which was also lauded for its determined economic reforms and its export-led growth model, had a similarly poor performance. It grew by 1.8% in 2012 and is forecast to grow by about 1% in 2013. So, even in its currently weakened state, Russias economy is actually performing better than those of many other countries in the region. Nonetheless, continued stagnation of industrial production will eventually become a pretty serious problem. Oil prices arent going to increase forever, and even if Russia never become an export powerhouse if it wants to play an important international role it cannot have an industrial sector that is permanently frozen in early 2012. The Russian government has actually been following a very prudent and inflation-adverse monetary policy, but it has shown almost no interest in the sort of supply-side reforms that would spur investment and, eventually, improvements in productivity and production.