EU Officials Concerned About Risks of Pound Drop, Document Says

EU Officials Concerned About Risks of Pound Drop, Document Says
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By Meera Louis

Feb. 25 (Bloomberg) -- European Union officials are concerned that the pound’s slide to a record low against the euro could destabilize the British economy, according to a document prepared last month by European Commission and EU finance ministry officials.

The pound’s “very rapid” drop “raises questions about the financial stability of the British economy,” said the document, which was prepared ahead of the Feb. 14 Group of Seven meeting in Rome and obtained by Bloomberg News. The currency’s weakness “is a source of concern for the euro area.”

The report contradicts Prime Minister Gordon Brown’s argument on Feb. 13 that a weaker currency helps rather than hinders the economy. With the pound down 18 percent against the euro in the past year, it also underscores investors’ concern about Britain’s fiscal health as the government racks up debt to fund bank bailouts.

The one-page document, titled “Recent exchange rate developments - G7 preparation,” was circulated at a meeting of EU officials before the G-7 gathering in Rome. The document also outlined the EU’s position on the U.S. dollar, the yuan and the yen before discussing the pound.

The Obama administration’s expressed support for a “strong dollar” is “reassuring,” the document says. It also calls for a “continued real effective appreciation” of the yuan against the euro. Japanese authorities “should not intervene to reverse the past appreciation of the yen,” it says.

Pound’s Slump

The document signals concern among euro-area policy makers that the pound’s slump could push their 16-nation economy deeper into a recession by undermining exports to its biggest trading partner.

The U.K. currency fell 23 percent against the euro last year as confidence in the U.K.’s fiscal health weakened, export demand dried up and Bank of England cut interest rates to records. The pound reached a record low of 98 pence per euro in late December. It traded at 87 pence per euro at 6:33 p.m. in London yesterday.

“As the pound has gone down, we’re more competitive,” Brown said Feb. 13. “We’re not trying to target the exchange rate like people used to do.”

At the same time, his government has taken on liabilities that may amount to 1.5 trillion pounds ($2.2 trillion) as it tries to prop up the financial system and rescue banks such as Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc.

‘Sharp Moves’

Europe’s officials are concerned that global currency volatility could roil markets and destabilize their own economies.

“Exceptionally high volatility and unprecedented sharp moves in the foreign-exchange market have adverse implications for economic and financial stability and are especially unwelcome in the current economic environment,” the draft document said. “In a context of low inflation in all major economies, any large moves will translate into big real exchange rate swings that could lead to competitive distortions.”

French and Irish finance ministers have already openly questioned the U.K.’s management of its currency.

France’s Christine Lagarde said Jan. 21 that the Bank of England’s monetary policy “isn’t very efficient in providing more support” for the pound. Ireland’s Brian Lenihan said that Britain is engaging in “competitive devaluation.”

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Ireland’s Children Flee Again as ‘Dark Days’ Return (Update1)
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By Fergal O’Brien and Louisa Nesbitt

Feb. 24 (Bloomberg) -- Irish engineer David Kavanagh thought he’d have his pick of jobs when he graduated from college last year. Instead he’s picking countries.

“There’s no jobs here; that’s why I’m considering getting out,” said the 23-year-old, who has yet to find work since he got his degree. “I would go anywhere. Australia has gone down, I hear. Canada’s the new holy grail.”

As Ireland slides deeper into a recession, its workers are returning to the emigration trail that blighted the nation for 150 years until the Celtic Tiger economic boom of the 1990s. With the Dublin-based Economic and Social Research Institute forecasting that 50,000 people will leave in search of work, the country is facing what former Prime Minister Bertie Ahern calls the “dark days” of mass exodus again.

“The 1980s are on people’s minds, and they don’t want to go back there,” said Dermot O’Leary, chief economist at Dublin- based Goodbody Stockbrokers. “Population growth helped drive Ireland’s economy, so a reversal is going to hurt by reducing the economy’s productive capacity.”

The flight -- the biggest in two decades -- comes as Ireland’s economy shrinks the most of any euro-area nation. Gross domestic product may contract by about 10 percent between 2008 and 2010, and the jobless rate may reach 15 percent by the end of next year, a 15-year high, according to Goodbody. Unemployment averaged 4.6 percent in 2007.

Unemployment Lines

Many of those joining unemployment lines and considering emigrating worked in construction, which is shrinking at a record pace after a decade-long boom. Elaine McNamara, who came home from Australia in 2006, plans to return in June with her partner, a carpenter.

“My boyfriend could be laid off at any time,” the 28-year- old said. “The building industry is very bad.”

Renewed emigration marks a sharp change of fortune for the island nation, which has a population of 4.4 million. Between 2000 and 2008, a net 400,000 people arrived, drawn by work at building sites, factories and hotels. That’s all changed as Dell Inc., Intel Corp. and Waterford Wedgwood Plc, the Kilbarry, Waterford-based maker of crystal and tableware, cut jobs.

Biggest Exporter

Once Ireland’s biggest exporter, Dell -- based in Round Rock, Texas, and the world’s second-largest personal-computer maker -- said last month it will eliminate 1,900 jobs at its factory near Limerick. Santa Clara, California-based Intel, the world’s biggest maker of computer chips, said on Feb. 17 that it is seeking 200 to 300 voluntary job cuts at its plant in Leixlip, west of Dublin, where about 5,000 people work.

Davy, Ireland’s largest securities firm, this week said it will cut 12 jobs, adding to the 70 it shed last year. Unemployment-benefit claims rose 11 percent to 326,100 in January, the highest since records began in 1967.

The biggest exodus this year will be among the 170,000 workers who arrived during the past four years from Poland and other central and eastern European countries. Locals are starting to join the retreat, threatening smaller communities that often rely on a single industry.

“The mood is bad; lads just don’t know where they stand right now,” said Padraic O’Flaherty, chairman of the Micheal Breathnach Gaelic football club in western Ireland. He said 11 of the 15-member senior team have recently lost their jobs, most from construction sites. “It looks like, at the moment, that some of them will have to head abroad.”

GDP Growth

Even so, there’s little likelihood of the wholesale exodus that marred earlier decades. Between 1871 and 1961, Ireland’s population shrank 36 percent to 2.8 million people. In the 1980s, an average 20,000 people left the country every year, departing for the U.S., the U.K. and Australia.

Now, Ireland’s GDP per person is about a third above the average for countries in the Organization for Economic Cooperation and Development. Ireland’s economy grew by an annual average of 6.7 percent between 1997 and 2007, three times quicker than the euro region, according to the OECD.

“Ireland is not the weak link of the euro area,” European Central Bank President Jean-Claude Trichet said on Feb. 20 in Paris. “There is no weak link of the euro area.”

Moreover, many of the traditional destinations for the Irish -- including the U.S., Australia and the U.K. -- are struggling with rising unemployment.

“The difficulty is that today, there’s nowhere to go,” said John Graby, director of the Royal Institute of Architects of Ireland. “Even Australia seems to be going downhill. I heard of an Irish architect who sent an e-mail home saying he got the last job in Brisbane.”

Weakest Pace

The global economy will expand by just 0.5 percent this year, which would be the weakest pace since World War II, the International Monetary Fund has forecast. The U.S. economy may shrink by 1.6 percent and the U.K. economy by 2.8 percent, the Washington-based fund said on Feb. 5. Undeterred, some are packing their bags.

“Since last year, we’ve noticed quite a large increase in the volume of people looking for information,” said Edwina Shanahan, sales manager at Visa First in Dublin, which provides work visas for countries such as Australia, Canada and China. “A lot of these people have been made redundant or know they will be made redundant. It’s been a constant pull out there.”

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Swiss finance sector halved if bank secrecy dropped: banker

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Switzerland's key financial services industry could be decimated if its trademark secrecy is given up as part of reforms to cope with the global economic crisis, a prominent Swiss private banker warned. Skip related content
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Without banking secrecy, "the financial centre would shrink by up to half of its current size," Ivan Pictet, a private banker who heads the Geneva Financial Centre bank association, told Le Temps daily on Tuesday.

"Rather than making up about 12 percent of gross domestic product, the financial sector would make up just about six or seven," he said when asked what would happen if Switzerland gives up its bank secrecy practices in the face of calls for greater financial system transparency.

Critics say that the system must be made more transparent so that financial risk can be more easily assessed and capital flows more easily monitored, two key failings contributing to the current crisis.

That has put Switzerland on the spot because its banking system has prided itself on offering complete secrecy for clients, which many critics claim means the country has in effect allowed wealthy foreign clients to evade tax.

In Switzerland, tax evasion is not a crime but tax fraud -- which involves the forgery of documents, is.

Swiss banking secrecy law prohibits banks in Switzerland from revealing any information to authorities or any third parties about their clients, except in cases involving recognized criminal investigations.

A Swiss bank would not therefore transmit details in cases of evasion but would do so only in instances of fraud.

Last week, UBS provided data on 250 to 300 clients to the US government and paid a fine of 780 million dollars to settle a case of abetting tax fraud by US clients, in a move seen at the time as easing the threat of change.

A day later, however, the US government filed a separate lawsuit to try to force UBS to disclose the identities of 52,000 US customers who allegedly evaded taxes, putting the issue back firmly in the spotlight.

Fears that the secrecy laws will be changed put Swiss banking stocks under pressure last Thursday, with UBS plunging almost 17 percent at one point.

UBS continued to tumble to historic lows on Tuesday, trading down 4.70 percent to 9.53 Swiss francs in afternoon trade.

Pictet said that Thursday's falls in share values did not represent the expected cost to the industry should banking secrecy be abandoned.

"If (banking secrecy) were to disappear, the client would no longer have any reason to travel 500 kilometres to see his wealth manager," he warned.

But international pressure is mounting, with European leaders preparing for the meeting of the Group of 20 nations in April calling Sunday for a list of "uncooperative jurisdictions" to be drawn up, with sanctions to be imposed.

Pictet said that was a "real threat" and called for Switzerland to "fight for equal treatment as all other financial centres such as Singapore."

He said abolishing banking secrecy could have a "huge" impact on Geneva.

"The 140 or so banks which are in Geneva would no longer have reason to stay, they are here to offer Swiss banking secrecy.

"The traditional Swiss knowledge on wealth management would be insufficient in itself to compensate for the loss of the protection of the private sphere."

Banking secrecy is meant to "protect the private sphere of the client and there is no prosperous financial centre that does not efficiently protect the confidentiality of its clients," he said.

Pictet also rejected the suggestion that Switzerland's financial centre thrives on tax evasion, saying it is "not the role of a banker to assure that his client is paying his taxes.

"That would require a police investigation before determining if the client could be accepted or not," he added.

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本社・ＦＮＮ合同世論調査　“小泉節”意外に不評

2月24日8時2分配信 産経新聞

本社・ＦＮＮ合同世論調査　“小泉節”意外に不評

拡大写真

小泉元首相の一連の発言について（写真：産経新聞）
　国民的人気を誇り、言動が注目を集めてきた自民党の小泉純一郎元首相だが、神通力にかげりが出てきたことが浮き彫りになった。

「総理まんじゅう」最も売れたのは小泉氏ではなく…

　小泉氏は１２日、麻生太郎首相が郵政民営化に反対だったかのような発言をしたことについて「怒るというより笑っちゃうくらい、あきれている」と批判した。調査では首相の郵政民営化に関する一連の発言は「評価しない」が８１・０％に上ったが、それを批判した小泉氏の発言を「評価する」のも３６・４％と少なく、「評価しない」が半数以上の５６・３％だった。

　また、小泉氏が定額給付金を含む平成２０年度第２次補正予算関連法案の衆院再議決を棄権する意向を示したことについて尋ねたが、再議決自体に反対する意見が６１・５％だったにもかかわらず、小泉氏の意向を「理解できる」は４６・２％で、「理解できない」も４６・６％と評価を二分した。

　小泉氏が推進した構造改革は「評価していない」が５３・６％で「評価している」は４４・２％。「首相にふさわしい人物」でも、小泉氏は１月の前回調査より２ポイント下げた。麻生政権への風当たりは強いが、それに批判的な小泉氏も受け皿にはなっていないようだ。

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富山湾が変だぞ　ブリは半分・タラバ初水揚げ、原因不明（1/2ページ）

2009年2月25日15時0分

　富山湾がおかしい。春中心のサワラが一年中網にかかり、名物のホタルイカが取れる時期が早まり、ブリの水揚げは平年の半分になった。南方のゴンズイの群れもみられ、温暖化の影響かと思いきや、北のタラバガニも初水揚げ。原因が分からず、地元漁師らは「これまでの経験が通じない」と戸惑っている。

　富山県魚津市のある漁師は「沖合の表層で回遊しているマダイやヒラメが一度にたくさん揚がる。今までにない取れ方だ」と首をかしげた。

　魚市場には、例年だと１月初旬には見られなくなる南方系とされるカゴカキダイやタカノハダイが、数は少ないが２月でも並ぶことがある。魚津漁協の浜住博之参事も「３月下旬～６月上旬だったホタルイカの漁期が半月ほど早まるなど、何か変だ」と話す。

　富山県水産研究所によると、県内のサワラの水揚げは平年の約４００トンに対し、昨年は２倍以上の１０８０トン。マダイも昨年は平年比４５％増の２０９トン、ヒラメも４３％増の１３９トンだった。逆に、カワハギ類は平年のほぼ３分の１、ブリは半分以下の１３７トンにとどまった。

　一方、同じ日本海側で西側の石川県も昨年、マダイは平年比８３％増の３６３トン、サワラは同２．２倍の１０６６トン。ただし、ヒラメは平年並み。石川県水産総合センターによると、特にサワラは、春に富山湾寄りで水揚げが良かった。しかし、東側の新潟県では大きな変化はみられなかったという。

　富山湾では沿岸でも異変が起きている。昨年９月、北でとれるタラバガニが黒部市沖の水深２００～３００メートルの刺し網に１匹かかった。足を広げると１メートルも。くろべ漁協は「初めてでびっくりした」。

　今年１月、魚津水族館職員が魚津市沿岸でハタハタの卵塊を見つけた。ハタハタは東北地方の日本海などの水深１５０～４００メートルに生息し、冬場に産卵で浅場にくる。湾内のハタハタの漁獲量は年間平均約２１トンだが、卵塊が見つかったのは初めてという。

　同じ時期、同館の別の職員が富山県入善町の入善漁港で、南方系のゴンズイの幼魚６４匹を捕獲。冬に、複数の幼魚の群れを確認したのは初めてという。同館は昨年８月、魚津市沿岸でゴンズイの稚魚を確認しており、対馬暖流に乗って来た成魚が産卵、孵化（ふ・か）した幼魚が水温が下がっても生き残った可能性が高いとみる。

　同館の稲村修学芸員は「水温に敏感な魚の異変が目立つ。いろんな現象が同時に起きているのは、沿岸から急に深くなる富山湾独特の地形で、表層と深海の水温の差が大きいことが影響しているのではないか」と推測する。（阪本昇司）

　　　　　◇

　富山湾　沿岸から急に深くなり、水深１千メートルにも達する地形が特徴。表層の水温は対馬暖流の影響を受けて比較的温かく、３００メートル以下は年間を通じて水温１～２度の日本海固有水があり、多様な水産物が水揚げされている。

----------------------------
USA may eventually aim its interceptor missiles against itself
25.02.2009 Source: Pravda.Ru URL: http://english.pravda.ru/world/americas/107149-usa_missile_defense-0

The United States harbors plans to create the fourth and the fifth missile deployment areas, which may seriously change the balance of forces in the world. It is quite possible that USA’s missile defense objects will be aimed against itself in the long run, taking into consideration the current state of affairs when America is losing its international influence.

Albania set out its readiness to give green light to USA’s missile defense system. Albanian Prime Minister Sali Berisha said that if the USA does not succeed in the deployment of its missile defense system in Poland and the Czech Republic, Albania would be ready to provide such an opportunity instead.

Russia’s Foreign Minister, Sergei Lavrov, previously stated that the United States was not going to stop with the establishment of the third missile deployment area (in Poland and the Czech Republic). “We have received neither a precise answer, nor a rejection to our questions about the possible establishment of the fourth and the fifth deployment areas of the United States,” he said.

The USA and the USSR signed the Limitation of Strategic Offensive Arms Treaty on May 26, 1972. The document obliged the two countries not to build any missile defense system elements. However, President Reagan announced the beginning of the activities to study additional measures against intercontinental ballistic missiles on March 23, 1983.

In 1991, President George H. Bush set forth the concept of the program to modernize the missile defense system. The USA started making attempts to build the national missile defense system in circumvention of the treaty with the Soviet Union. In 1999, Bill Clinton signed the National Missile Defense Act to defend the entire territory of the nation against ballistic missiles of a potential enemy. The USA conducted the first tests of the NMD prototype on October 2, 1999.

George W. Bush stated in 2001 that the system would protect no only the USA, but its allies too. He added that elements of the US missile defense system could appear on the territory of US allies too. In 2002, the USA pulled out from the missile defense treaty, and that was the time when the geopolitical insanity began.

British Prime Minister Tony Blair agreed to modernize the US long-range early warning system at Fylingdales. The decision marked the first step on the way to deploy missile defense system elements outside the United States.

Other countries joined in too. For instance, Japan makes and purchases ABM interceptor missiles and ponders an opportunity to deploy a forward-based radar system on its territory. Israel participates in the program to modernize Arrow missiles. Denmark signed an agreement in 2004 about the modernization of the US early warning radar system in Greenland.

It is practically impossible for the United States to create two more missile deployment areas taking into consideration the fact that the country has not started building the third area in Europe. The creation of missile defense systems in foreign countries is a very cost intensive initiative, not to mention the fact that such objects can be politically vulnerable. A missile defense system in another country can be good only when it is based on the strong unity of allies.

The Old World intends to create its own army. Prudent officials of the US administration are not likely to entrust their missile defense system to such unreliable countries as Georgia or Azerbaijan.

There is also Mongolia, though, but it seems that the name of this country does not come to anyone’s mind. Mongolia sent its troops to Iraq five years ago, and its military men stay there still. Mongolia can be a perfect place to build the missile defense system: China, Siberia and Russia’s Far East will be very easy to reach and control from that country. However, China gives Mongolia access to its sea ports, not to mention the fact that Mongolia is entirely dependent on Russia’s oil.

Vladimir Anokhin

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Internet addicts die of inaccurate definition of their disorder
25.02.2009 Source: Pravda.Ru URL: http://english.pravda.ru/society/family/107150-internet_addiction-0

The problem of Internet addiction does not seem to attract a lot of public attention. The majority of people are certain that addiction to web-surfing is nothing in comparison with addiction to drugs or alcohol. However, The American Journal of Psychiatry, the world’s largest association of psychiatrists, published an article last year, which suggested categorizing addiction to the internet as a mental disorder.

Up to ten percent of online surfers suffer from the Internet overuse. It does not seem to be a large amount of people, but it means that at least 400,000 Muscovites are in need of medical aid at this point. Hundreds of Internet addicts have already died in the world because the human body is unable to cope with the excessive use of computers. As for the so-called risk group, the problem touches upon about 40 percent of web surfers.

Internet addicts may sit for hours and even days in front of computer screens without eating and sleeping. They lose interest in personal hygiene and household routines. Family, work, studies and friends lose their importance as people start living in the virtual world.

People usually go online to watch some videos, to find information, to communicate with other people etc. To put it in a nutshell, people use the Internet to satisfy a want. An Internet addict does not satisfy any of their wants with the help of the world wide web. When a human being needs something, he or she usually seeks a way to solve the problem, finds a solution, receives satisfaction from his or her achievement and calms down. However, it may also happen when this process does not have a logic conclusion – people may never find a solution when they live on the Internet.

It goes without saying that the Internet offers a gazillion of opportunities to escape from reality. Vodka, heroine or gambling provide a similar opportunity.

A person, who spends a lot of time surfing the web, loses an ability to control their time. If they do not use the Internet they become depressed and explosive. They lose interest in other alternative ways of pastime. Internet addicts can not refuse themselves in visiting websites and chat rooms even if they realize that they have to do it.

Some specialists acknowledge that Internet addiction disorder is not a true addiction and may in fact be no more than a symptom of other, existing disorders. For example, a person who has lengthy telephone conversations with a friend to avoid an unpleasant situation could be declared "addicted to the telephone" with equal validity as a person who chats on the Internet with the same underlying goal.

To the extent that the Internet is a social medium instead of an object, people cannot be addicted to it. The analogy is made to an environment: a person can not be truly addicted to living in a favorite town (no matter how distressing a change of home might be), and a goldfish can not be addicted to living in a pond.

Secondly, it is widely recognized, even by its supporters, that most if not all "Internet addicts" already fall under existing, legitimate diagnostic labels. For many patients, overuse or inappropriate use of the Internet is merely a manifestation of their depression, anxiety, impulse control disorders, or pathological gambling.

Medportal

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Now is the time to make the move to Russian steel
24.02.2009 Source: Pravda.Ru URL: http://english.pravda.ru/business/companies/107147-steel-0

A combination of economic and political factors has swung heavily in the favor of Russian steel production and now offers Europe and to a smaller extent, North America, an opportunity worth pursuing and capitalizing on.

The first true Russian steel/iron works and forge shops date back to the late 1600s and Peter the Great's reforms. That gives Russian steel production a history of over 350 years. Production continued to expand and increase in quality for the duration of that period and now offers some of the highest quality material in the world. Furthermore, as the late 1990s and 2000s progressed, Russian steel output grew very quickly, making Russia the 3rd largest producer of steel, speciality steel and semi and fully finished steel products. Steel and steel components, both forged and cast, are Russia's biggest exports, after petro chemicals.

As the Bank Panic of 2008 and the Economic Collapse of 2009 proceed, Russian open capacity sky rocketed. A large portion of Western European demand disappeared and internal credit crunch conditions have created a lot of work that can not be done without payment upfront. Russian steel mills and metal works have, unlike the West, not responded by mass layoffs but have cut every one's hours to half or less. This gives them the ability to very quickly upscale production, without having to go through a rehiring process. Further, Russian steel prices have come down heavily, both due to a heavy drop in the cost of steel, a lack of demand and the devaluation of the ruble. Add to this, the Medvedev government's decision to loan, at zero percent interest, large sums of money to retool heavy industry, and Russia offers potentials found in few other places, in today's world.

Let us now proceed through each of these steps and advantages, covering both the internal markets and the main Russian low cost country competitors: China and India.

To begin with, Russian steel fell heavily. How heavily? Let us examine plain 1040 carbon steel: at the height of the bubble, 1040 steel sold for $1,000 per metric ton. By early December it was selling for 253 Euro, a drop of 67% in price. Since then it has edged up to a whopping 269 Euro to 292 Euro, so about 60-65% below their August peak. This is a greater drop then in any other market, to include China. Furthermore, a metric ton of 4130, moly-carbon steel can be acquired for approximately 500 Euro or almost at half the price of Western European steel mills and for large quantities further reductions are possible.

The continued reduction in the value of the Ruble is also playing a hard downward pressure on the cost of Russian steel. The ruble went from a height of 16.75 Rubles per Euro, on 15 August 2008 to a present, 22 February 2009 rate of 46 Rubles per Euro, a drop of 174%. The Ruble is continuing to decline and will more than likely bottom out somewhere around 50-55 Rubles per Euro.

At this rate, it is quite capable to earn a savings of 40-50% on forged, open and closed die, and cast steel products on existing Russian technology, a mixture of both old Soviet machinery and state of the art modern equipment. As new Russian equipment, both domestically produced and foreign bought, comes on line, the technological advantage should improve returns by as much as 10% additionally.

Russia vs. China

In comparison with China, Russia offers many advantages. First amongst these, is a cheaper steel price. A key component of modern steel production is scrap, of which China has precious little and imports it from the US. This in turn drives Chinese scrap prices, on average, up to 100 Euro higher than that of the world market. Secondly, Russia offers a high quality of steel, something that China can not, consistently. If one wants 1030/1040 carbon steel for forks and cheap knives, China is your source, but if high quality steels are required that must bear much pressure and weight, a supplier is playing with fire in China. Furthermore, in China, it is what is inspected that is delivered not what is ordered, often resulting in poor quality porous steel that is good only for junking. Russian steel production, especially for common 4130/4140 (both considered high alloy steels in China) is of top notch quality, rivaling and surpassing anything in the West.

Furthermore, on a geo-political front, Russia is a much more stable nation then China, in the present. China, already in a recession, is facing major civil unrest that threatens to spill over into something much worse. Furthermore, when Chinese manufacturers disappear, and over 100,000 did in 2008 alone, they often disappear with the customer bought raw materials and there is nothing that companies can do to regain it. The Rubles devaluation has allowed Russia to compete directly with China, without forcing its workers to live in barracks and work as little more than indentured servants.

Lastly, Chinese production takes on average 2 months at sea to reach a southern European port, critical delays that require much higher transportation bills and larger inventory to carry through this long period. Central Russia (Ural district) to Western Europe is 15 days by truck or about three weeks by train, loading and unloading. Cost are also significantly cheaper. A 19 metric ton container will cost around 2,000 Euros to transport, or 105 Euros per ton. Of course you will be renting the whole container whether you are moving that much mass or not. Rail from Russia runs at approximately 80 Euros per ton and you are only charged for what is actually transported.

Russia vs. India

Russia offers several advantages over India also. Though quality wise, the Indians are mostly on par with Russia, they can not help their geographical location. This means that an average shipment from India to southern Europe takes around 40-45 days. First north-south short range transports take goods to Sri Lanka for consolidation. Yes the same war torn Sri Lanka you hear about with their Tamil Tigers blowing themselves up. After re-consolidation, which can take from a day to two months, long haul transports must take the cargo to Europe, passing by the Horn of Africa and hoping to either not get raided by pirates or to find a military escort. To the US the trip is even longer, taking often as much two plus months.

Russia offers another advantage: geopolitical stability. Most people tend to forget that nuclear armed India has an endless border war with it nuclear armed neighbor Pakistan, with whom it has already fought three wars. They also tend to forget that Pakistan is deteriorating very quickly under Jihadist onslaught. As such, keeping major points of supply in India could be an economic disaster, should the situation heat up any further.

Stanislav Mishin

The article has been reprinted with the kind permission from the author and originally appears on his blog, Mat Rodina

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Russia set to regulate arms prices
15:29 | 25/ 02/ 2009

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MOSCOW, February 25 (RIA Novosti) - The Russian government is planning to use price regulation mechanisms for state defense contracts, a deputy prime minister said on Wednesday.

"I believe it is extremely important to enshrine in law the concept of 'the state regulation of prices for arms and military and special equipment,' and apply this mechanism to all defense contractors," Sergei Ivanov said, addressing the country's lower house of parliament.

He also said the government was determined to intensify "anti-trust regulation" with regard to suppliers of major technical resources, raw materials, parts and components used in the production of arms and military equipment.

He said Russia's defense industry would need 295 billion rubles ($8.2 billion) in loans this year to ensure the smooth operation of its enterprises.

Ivanov also said Russia's 2009 arms exports would remain at the previous year's level.

The Federal Service for Military Cooperation previously said that arms exports would rise from $8 billion (2008) to $8.5 billion this year.

Russia's deputy defense minister said last Monday that state defense contracts would not be subject to cuts this year despite the ongoing financial crisis.

The Defense Ministry is to transfer 65 billion rubles ($1.9 billion) to producers before the end of this month, with 35% of military contract payments to be transferred in the first quarter of 2009.

The government is to disburse a total of 1.3 trillion rubles ($37 billion) to defense contractors this year.

The state arms production budget for 2009-11 has been approved at 4 trillion rubles ($115 billion).

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Foreign investment in Russia down 14.2% in 2008 to $103.8 bln
15:08 | 25/ 02/ 2009

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MOSCOW, February 25 (RIA Novosti) - Foreign direct investment in Russia dropped by 14.2% to $103.8 billion in 2008, the Russian state statistics service said on Wednesday.

"Foreign investment stood at $17.3 billion in the first quarter of 2008, 29.9% down against the same period last year, $29.3 billion in the second quarter [down 18% year-on-year], $29.2 billion in the third quarter [up 6.1% year-on-year] and $28 billion in the fourth quarter [down 15.2% year-on-year]," the service said in a press release.

Loans accounted for 72.6% of all foreign investment last year. Foreign direct investment totaled $27 billion, or 26% of all investment, and portfolio investment reached $1.4 billion, or 1.4% of all investment.

Portfolio investment in Russia dropped the most, by 66.3%, the amount of loans fell by 15.3% and foreign direct investment declined by 14.2%.

Foreign capital accumulated in the Russian economy amounted to $264.6 billion in 2008, up 19.9% against 2007.

The largest investors in Russia in 2008 were Cyprus ($56.9 bln), the Netherlands ($43.35 bln), Luxemburg ($34.4 bln), Britain ($30.8 bln), Germany ($17.4 bln) and France ($9.5 bln). The countries accounted for 77% of accumulated foreign investment and 79.4% of accumulated foreign direct investment.

The bulk of foreign capital ($33.9 bln) was invested in Russia's processing industries, and the least ($20 million) went into healthcare and social services.

Russia invested $114.3 billion in foreign countries last year, up 53% against 2007.

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Kudrin sees Russian govt revenue down 31.5% in 2009


MOSCOW, Feb 25 (Prime-Tass) -- The Russian federal government's revenue is projected to fall 31.5% on the year to 6.349 trillion rubles in 2009, Deputy Prime Minister and Finance Minister Alexei Kudrin said Wednesday.

Compared with the original plan for 2009, federal government revenue will fall by 42%, he said.

"This is a serious challenge for the budget system," Kudrin said at a meeting of the Federal Treasury, a constituent part of the Finance Ministry.

He said that federal government spending would amount to 9.3 trillion rubles in 2009.

According to the original plan for 2009, spending was expected to amount to 9.02 trillion rubles. In 2008, federal government spending totaled 7.56 trillion rubles.

Kudrin went on to say that the federal budget deficit would amount to 7.4% of gross domestic product (GDP) in 2009. He added the deficit should not exceed 8% of GDP in 2009 if the government wanted to keep consumer price inflation at 13-14% or lower.

Kudrin also said that the government would transfer 2.7 trillion rubles from its 4.8 trillion ruble Reserve Fund and borrow about 250 billion rubles on the domestic market to cover the deficit.

(36.0254 rubles - U.S. $1)

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Kazakhstan launches nationwide census
11:59 | 25/ 02/ 2009

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ASTANA, February 25 (RIA Novosti) - Kazakhstan has launched its second nationwide population census since the Central Asian country gained independence following the collapse of the Soviet Union in the early 1990s.

Some 6 million tenges (around $200,000) has been allocated from the country's budget to fund the research, which will be carried out across the country up until March 6.

The survey will involve some 53,000 census takers and around 45 questions, including details of the ages, nationalities, education, religious beliefs, and income levels of respondents.

Kazakhstan carries out a census every ten years and according to the 1999 results, the country's population stood at 14.953 million which was a 7.7% decrease against the 1989 figure of 16.199 million people.