Russian Linen from Vologda

The International Exhibition Fair “Russian Linen”, traditionally held in Vologda, won high acclaim from professionals. This year, the forum was held for the 12^th time and spanned five days from 26 February to 1 March. The Governor of Vologda oblast, Vyacheslav Pozgalev, thinks that linen is of strategic importance to Russia.

“It would be no exaggeration to say that linen brings salvation to a nation. As we all know, Napoleon left his army without clothing after he lost his campaign in Egypt, thereby, losing Egyptian linen and English wool. Napoleon announced a reward of 1 million francs to anyone who could organise linen production and dress the French army in uniforms made of domestic materials. In other words, linen is a fabric of strategic importance. In addition, it is a vital raw material in the production of gunpowder. Since Russia produces no cotton after the disintegration of the Soviet Union, linen remains the only natural material for our textile mills.

Today, linen is produced in 24 oblasts of Russia, and Vologda is the fourth-largest linen producer, growing linen on more than 7,000 hectares (17,297 acres) of cropland. A whole set of facilities make up a linen production cycle from field to counter, and production facilities are modernised on a regular basis. Vologda is the most rapidly-developing linen region. The most spectacular event of the ‘Russian Linen’ Exhibition is a show of linen collections by 45 fashion houses across Russia. Linen clothes are elegant, comfortable to wear, and made of environmentally-friendly materials. Moreover, linen has a healing effect on the body”.

According to Governor Pozgalev, “Linen is one of the most powerful antiseptics. No cases of skin diseases were registered in the tsarist army because the soldiers were all dressed in linen. Today, linen bedding may be crucial in the treatment of allergies. The advantages of linen are so clear that many politicians and cultural figures order linen bed spreads from us. There is even linen wallpaper and the richest clinics in US have walls covered with spun linen”.

Linen finds ever wider uses in construction, chemical, medical, pharmaceutical, and defence industries every year. The Vologda forum, featuring the best of domestic linen produce and the latest of linen-related innovation technologies serves a convincing proof that, despite the economic crisis, the Russian linen industry is maintaining its high position on the market.

2 March 2009

Vyacheslav Pozgalev

Governor of Vologda Oblast

Voice of Russia World Service

http://www.ruvr.ru/main.php?lng=eng&q=41352&cid=59&p=02.03.2009 (in English)

Global Economic Crisis Seen as Top Security Threat to America

US intelligence agencies reported this week that the global economic crisis has become the biggest US national security concern. The crisis, the report said, is causing instability in a quarter of the world’s countries and threatening destructive trade wars. Thus, the global economic turmoil has apparently upstaged world terrorism in the intelligence agencies’ latest assessment of threats to the United States. That dramatic shift is apparently a reflection of the depth of the unfolding recession, but, also, by implication, of the progress made in the war against terrorism and the Obama administration’s enlarged definition of national security.

National Intelligence Director Dennis Blair told a Senate panel this week that if the crisis lasts more than two years, it could cause some nations’ governments to collapse. A former war-fighting Navy commander-turned-National Intelligence Director, Mr Blair told startled Senators that a number of allies the United States depends on might no longer be able to afford to meet their own defence and humanitarian obligations. Mr Blair said the financial meltdown, which started in the United States and quickly spread to other countries, already has eroded confidence in American economic leadership and belief in free markets. “Time is probably our greatest threat. The longer it takes for the recovery to begin, the greater the likelihood of serious damage to US strategic interests”, he told the Senate Intelligence Committee on Thursday. Blair’s lengthy statement opened with a detailed description of the economic crisis. It was in sharp contrast to such national threat briefings in the previous years, which focused first on traditional threats and battlefields like Iraq, Afghanistan, and Pakistan.

One reason for the new ranking, according to experts, is progress made in the last year against al-Qaeda. A year ago, this terrorist group was said to have reconstituted its operations in the lawless tribal area between Pakistan and Afghanistan. But, apparently, that has changed. Mr Blair admitted, however, that the organisation is far from beat, but, said that sustained pressure to force al-Qaeda out of the tribal areas could seriously undermine the organisation. The US intelligence chief also made it clear the situation in Afghanistan has deteriorated, and that the Taliban insurgency has expanded despite US and international efforts to stem it. He laid much of the blame for this on the government in Kabul, which was unable to provide basic services and gainful employment, which he said erodes its legitimacy and increases the influence of the warlords and the Taliban.

In former days, the emphasis in a report of this sort fell on the analysis of external problems the United States was confronted with. These concerned anti-terrorism effort, the danger of the spread of weapons of mass destruction, and political confrontation with separate governments and states. Now, the emphasis has shifted to economy. Economic issues are causing the greatest concerns, and not only with American intelligence. President Obama, too, is calling for urgent measures to save the US economy. Otherwise, the USA is in for a disaster.

According to Mr Blair’s report, by 2025 China and India will outstrip in GDP growth all other countries, except for the United States and Japan. Based on the results of annual GDP growth rates in 2007, China outstripped the United States 6 times and India 4-and-a-half times. The European Union is ahead of the United States by 1.5 times. This is clear evidence that the idea of a unipolar world is falling into oblivion under the impact of a powerful financial and economic crisis that struck in 2008 and is still going on. As the worlds unfolds towards multi-polarity, experts talk of the growing economic potentials of Russia, Brazil, and South Africa. Some experts expect a fast pace of economic development in Latin America, Asia, Africa and the Middle East. Group-based economic and political centres will spring up, and even though the centres will follow an uneven pattern of development, the system of their existence will stay steady.

As a result, we are witnessing a new turn in global development. The world was multi-polar before the Second World War, and it became bipolar after the war, split by a confrontation between two super-powers, the United States and the Soviet Union. After the disintegration of the Soviet Union, the world was unipolar for some time, with only one super-power left, the United States. Now, there is yet a new turn in history. Whilst the United States continues to stay the most politically, economically, and militarily powerful country, new global centres are emerging, whose influence will grow steadily. Mr Blair acknowledged this in his report to the Senate.

14/16 February 2009

Yuri Reshetnikov

Eduard Sorokin

Voice of Russia World Service

http://www.ruvr.ru/main.php?lng=eng&q=40552&cid=87&p=13.02.2009 (in English)

http://www.ruvr.ru/main.php?lng=eng&q=40564&cid=87&p=16.02.2009 (in English)

Editor’s Note:

These two articles were so interrelated that the only logical thing to do was to conflate them. There’s a new world ’round the bend… what it shall bring, no one knows, certainly, not me! Does anyone have a working crystal ball to be let out?

Who Is To Blame?

Alan Greenspan (1926- ), former Chairman of the US Federal Reserve System. He is only a scapegoat, the real culprits were Bush and Cheney. Thank you, George and Richard! We just LOVE the prosperity you bequeathed us!

Policymakers and political columnists identified the man who bears the blame for the perilous condition of the American and the global economy. 82-year-old Alan Greenspan, who spent a decade-and-a-half at the helm of the Federal Reserve System of the United States, was assigned the role of the scapegoat. An influential American magazine covering money and capital investment, Grant’s Interest Rate Observer, blames the financial bubble which burst to trigger off the crisis entirely on Mr Greenspan. Alan Greenspan opens the culprits’ list of the British Guardian. Financial darling of three Presidents of the United States, Mr Greenspan doubtlessly bears his share of blame for the irresponsible and dangerous moves which resulted in the current crisis. So does money-grubbing Wall Street. But, it would be unwise and improper to put all the blame on the handful of people whose names were listed in this negative context by the western media. It is not intentional or unintentional moves by certain individuals, but, rather, a chance combination of a few important factors that triggered off the crisis.

Current developments show that the unbearable burden of the arms race played the biggest role in this chance combination of several factors. A refusal to spend billions of dollars on a drawn-out arms race is what enabled the Clinton administration to hand a definitely surplus budget down to George W. Bush. It is considered bad manners on the banks of the Potomac to discuss the uncalled-for U-turn that the Bush-Cheney team was quick to execute for the purpose of re-starting the arms race. It is important to point out, though, that military spending ballooned two years before the 9/11 attacks on New York and Washington and three years before the invasion of Iraq and the beginning of full-scale action in Afghanistan. The Bush administration decided to re-start the arms race before launching any antiterrorist action; it was used as a smokescreen for this arms race.

US military spending grew 62 percent under the Bush administration. No other administration of the post-World War II years allocated so much money for the Pentagon. The military spending of the United States tops the sum total of the military budgets of all other nations taken together. As a result, the surplus budget of the pre-Bush years gave way to a steadily growing budget deficit. Because of the reckless attitude of the Bush-Cheney team, the United States started living on borrowed money. Its 10 trillion dollar (351.939 trillion roubles. 7.816 trillion euros. 6.999 trillion UK pounds) public debt will weigh down as a heavy burden on this and, experts say, at least two more generations of Americans. With billions of dollars disappearing in the black hole of two wars, there was no way to avert the crisis.

The bankrupt Republican administration chose a very special way to show its friendly regard to those who would bow it out of the White House. What it made sure to do before bowing out was to saddle the Obama administration with a mammoth 3 trillion dollar (105.582 trillion roubles. 2.345 trillion euros. 2.1 trillion UK pounds) budget for 2009. More than half a trillion dollars (17.597 trillion roubles. 391 billion euros. 350 billion UK pounds) is meant for the Pentagon. In other words, the arms race is to continue. It was said at the Senate hearings into this year’s budget that the first thing the administration to come would have to do is clear the mess left by the outgoing team. Will President Obama be able to clear this mess? Will he agree to do what his predecessor expects him to do, continue an arms race that threatens the world and weighs down, as an unbearable burden, on the American economy? The course of domestic and international developments depends, in a great measure, on his answer to that question.

14 February 2009

Valentin Zorin

A View from Moscow

Voice of Russia World Service

http://www.ruvr.ru/main.php?lng=eng&q=40548&cid=170&p=14.02.2009 (in English)

“Economic Turmoil is Worse than Terrorism”

The European Union is beginning this difficult week with the discussion of its financial problems, which are getting more serious with every passing day. From 16 to 20 February, in Brussels and Strasbourg, European finance ministers and heads of central banks will discuss what to do with finances, the economy, and the banking system at almost constant meetings. Moreover, the Austrians claim that a big threat to the EU is emanating from Eastern Europe. To bring this home to the EU leaders, several Austrian delegations are arriving in Brussels this week.

The Austrians are convinced that experts in the western part of the EU are mistaken about the scale of financial problems in its eastern part, and that Central Europe, as well as the Ukraine and Moldova, were affected by the crisis to a much greater extent than was previously believed. They demand that Brussels immediately revise a package of measures to support the balances of payment of the East European countries. Brussels allocated 25 billion euros (1.123 trillion roubles. 31.928 billion USD. 22.388 billion UK pounds) for these purposes. The Austrians believe that at least 150 billion euros (6.742 trillion roubles. 191.571 billion USD. 134.33 billion UK pounds) should go to Latvia, Lithuania, Estonia, Hungary, and Romania to prevent mass-scale bankruptcies or national defaults. If the banks in these countries start collapsing one after another, the Austrian banking system will fall like a house of cards. Brussels received such statements with a degree of concern and mistrust because they reflect Austria’s egotism. It is the biggest money-lender to Eastern and Central Europe, which together owe it a total of 220 billion euros (9.888 trillion roubles. 280.971 billion USD. 197.017 billion UK pounds).

The Austrians realise that it will not be easy to move Brussels to pity and persuade it to increase aid. In their battle for aid to Eastern Europeans that will also help their banks, they are using a very effective political argument, the Russian card. Christoph Leitl, the Chairman of the Austrian Chamber of Commerce, said, “We should save a weak child. If we don’t do it, Russia will. This child is a subject of rivalry between two families”. This card is bound to win. On Monday, 16 February, EU Industry Commissioner Günter Verheugen arrived in Kiev to meet with Ukrainian leaders and discuss what Brussels could do to save the Ukrainian economy from total collapse. However, the EU cannot quite work out whether it is better to deal with President Viktor Yushchenko or Prime Minister Yuliya Timoshenko. Without US and EU help, Eastern Europe will face dire consequences. This is now recognised by American intelligence agencies. DNI Director Dennis Blair told US senators that global economic turmoil and the instability it could ignite had outpaced terrorism as the most urgent threat facing the United States. This threat is primarily emanating from Central and Eastern Europe.

16 February 2009

Andrei Fedyashin

RIA-Novosti

http://en.rian.ru/analysis/20090216/120165494.html (in English)

Russia to Cut Budget Spending by Another 15 Percent

A business paper reported on Monday that the Russian government instructed ministries to cut spending by another 15 percent on top of the 15 percent budget cuts approved late last year. Budget cuts will affect all budget fund recipients, except for the courts. The biggest cut will hit the Energy Ministry (33 percent) and the Transport Ministry (30 percent), whilst the least affected will be the Education Ministry (11 percent), the RF Gosduma (12 percent), and the Foreign Ministry (12 percent), Vedomosti reported, referring to officials from several ministries. The figure for each ministry depends on the number of protected budget spending items, such as wages, stipends, other social obligations, debt service, and also expenditures on the 2014 Winter Olympic Games in the Black Sea resort of Sochi and the APEC (Asia-Pacific Economic Cooperation) summit in Vladivostok in Russia’s Far East in 2012, the paper reported. The budget sequester will enable the government to save 1.5 trillion roubles (43 billion USD. 34 billion euros. 30 billion UK pounds), bringing the total budget reduction figure to 17 percent, as only unprotected budget items were cut by 15 percent in both cases, Yelena Lebedinskaya from the Economic Expert Group told Vedomosti.

16 February 2009

RIA-Novosti

http://en.rian.ru/russia/20090216/120155332.html (in English)

Editor’s Note:

Whilst Western governments are going into hock, Russia is tightening its belt. The wisdom of this is beyond reproach. The Western currencies are going to become inflated, and the rouble is going to rise in value. That is, Russia is accepting short-term pain for long-term financial health, whereas the West is pursuing short-term palliatives at the risk of runaway inflation. I would say to President Obama, “The time for hellishly-expensive wars and military boondoggles is over. There is NO money for them. Cut them from the budget, and cut some of the bureaucracy as well. You could start with the bloated education, legal, and civil-rights agencies. THAT would help America”. The chances of that happening, however, are slim to nil. God help us all.

Can President Obama Handle the Crisis Alone?

US President Barack Obama (1961- ). Shall he rise to the occasion? God willing, he shall.

The American magazine Newsweek published an article by its former senior editor Andrew Nagorski, entitled Missions Critical. After taking a look at problems facing new US President Barack Obama, the author makes the stunning conclusion that Mr Obama may not be able to handle the current crisis alone. Mr Nagorski compares President Obama with the pilot of a huge airliner with little flying experience who, try as he might to make a soft landing, will still need help from more experienced co-pilots, foreign heads of state, who can fly their own missions. Here, mutual understanding and a mutual desire to help are of great importance. In dealing with the global financial crisis, Mr Obama and every other major political leader face a dual task, the author said. The first part concerns determining the size and scope of stimulus packages, while the second, equally-vital part, is about instilling public confidence that the proposed measures will actually produce results and allow for a soft landing.

Speaking about key foreign policy challenges, Mr Nagorski focused on Afghanistan and Pakistan. For one, he warned that European leaders are not enthusiastic about Washington’s calls to send reinforcements to NATO’s troop contingent in Afghanistan. The latest opinion polls in Europe show that most Europeans are strongly opposed to upping their involvement. The sad experience of the Afghan campaign shows that military force alone is not enough to establish a lasting peace. More than fresh troops are needed. The international community needs to pour more aid into Afghanistan and Pakistan to deal with humanitarian problems and encourage their long-term economic development, Mr Nagorski remarked.

Touching upon Iran, he said that in order to find a way for Russia and NATO to cooperate in dealing with a potential missile threat from that country, focus should be reframed to assess Iran’s real nuclear capability, both in terms of producing weapons and of delivering them. In Mr Nagorski’s opinion, there is reason to believe that Moscow wants to cooperate with the West on far more than just Afghanistan; in fact, it wishes to do so regarding a wide range of issues, including nuclear disarmament. Looking at US-Chinese relations, Mr Nagorski acknowledged some difficulties, but, said the two countries equally need each other, particularly when it comes to trade-economic issues, and need to work in tandem to address the current financial crisis.

Continuing the “pilot” metaphor, the Mr Nagorski suggested that President Obama “may already need to make some adjustments in his early flight plan”, since even the “most skilful pilot recognises that flying is always dangerous”, particularly in volatile weather. The article’s headline, Missions Critical, brings to mind a popular TV series, Mission Impossible, whose characters fight their way through the most difficult situations. Let’s hope we can manage it in real life as well.

11 February 2009

Voice of Russia World Service

http://www.ruvr.ru/main.php?lng=eng&q=40341&cid=57&p=11.02.2009 (in English)

Ukrainian President says PM had no Power to make Russia Gas Deal

Ukrainian Prime Minister Yuliya Timoshenko (1960- ) with Prime Minister Vladimir Putin (1952- ). Is she setting up Yushchenko the Boob up for a political Dixie Fry? I, for one, would put my money on Yuliya…

On Tuesday, Ukrainian President Viktor Yushchenko said that Prime Minister Yuliya Timoshenko was not authorized to agree a gas contract with Russia in January. The two countries’ energy companies, Russia’s Gazprom and the Ukraine’s Naftogaz, signed a gas supply and transit contract on 19 January following negotiations between Prime Minister Vladimir Putin and his Ukrainian counterpart.  “The prime minister was not authorised to make the decisions taken as part of the Moscow agreements [on gas supplies]“, Mr Yushchenko said. He also said that the deal “directly threatens the independence of the Ukraine”.

Russia suspended supplies to the Ukraine on 1 January after the former Soviet neighbours failed to reach an agreement on a new gas contract for 2009. A week later, Gazprom cut off gas deliveries to the European Union, saying the Ukraine was stealing gas intended for EU consumers. Under the terms of the new gas deal, the Ukraine will have to pay Russia 450 dollars (16,127 roubles. 349 euros. 310 UK pounds) per 1,000 cubic metres with a 20 percent discount in 2009, whilst transit fees have not been revised. On Monday, Mr Yushchenko said, “This is obviously unfair. I’m sure that those who have signed this agreement and accepted these terms will have to answer for their actions”. He said 450 dollars was “an exorbitant price”.

On Saturday, a Ukrainian presidential representative said that Naftogaz could go bankrupt as a result of the deal on gas prices agreed with Moscow. This is not the first time that Mr Yushchenko and officials in his administration have slammed the terms of the deal. On Tuesday, Prime Minister Timoshenko, however, said she would turn to the European Union for a probe into contracts on gas deliveries to Ukraine and its transit to Europe. “As a point of fact, tomorrow, I will address an official letter to the EU and request a probe into the contracts we signed, and I am sure their conclusion will corroborate everything I am speaking about”, Ms Timoshenko said.

10 February 2009

RIA-Novosti

http://en.rian.ru/world/20090210/120074105.html (in English)

Editor’s Note:

Well, well, well… it took Yushchenko over two weeks to reply to the gas deal. No doubt, he was going to his American handlers for their orders, for this disgusting puppet does not even go to bathroom without US neocon permission. This habit of his shall lead to his political demise, for no one in the Ukraine (save for a core of hard-line Galician Uniate nationalists) wants to be America’s marionette. As for the remaining Uniate nationalist fanatics clustered about him, they are driven by the Vatican and the Galician diaspora, which is out of touch with matters on the ground. Yushchenko has only a 2 percent popularity rating, which is even lower than GWB (what a feat! He’ll go down in the history books as the most incompetent and clueless president of all time!).

Yuliya is circling for the kill. One almost pities Yushchenko as he sets himself up for his political self-immolation. The sad fact is that he is going to light the pyre himself…

International Experts Praise Moscow’s Actions to Minimise the Financial Crisis

International experts praised the actions of the Russian government to minimise the aftermath of the global financial and economic crisis. This statement came in an International Monetary Fund research note that was prepared for a meeting of experts of the world’s 20 leading nations. Generally, the note offers the very same estimates and forecasts that the IMF made public late last month. This year, Russia’s GDP is expected to shrink by 0.7 percent, whilst next year should see 1.3 percent in growth, which will be the best economic performance amongst the G-8 countries. Inflation in Russia, according to the IMF, which makes use of its own methods, should slow down from 12.6 percent this year to 10.9 percent next year. This is in line with the overall world tendency, although Russia boasts the best indices amongst the top 20 economies.

True, Russia, just as other world nations were, was badly hit by the current crisis, above all, because of the collapse of the oil market and plummeting prices for other raw materials. Also, the influx of foreign capital into the Russian economy dropped drastically. But, in a situation like this, it was perfectly correct of Moscow, according to the IMF experts, to make use of accumulated resources to set things right. The experts also thought highly of the well thought-out policy of the Russian government supporting internal consumer demand and easing the financial burden on the economy.

“But, of course, it took the government some time to realise the need for this kind of policy”, said Andrei Sharonov, the former Deputy Economics Minister, in an interview with Voice of Russia. “At the beginning of the crisis, the government failed to grasp the actual proportions of the emergency or its own options in fighting it. At that time, it was thought that our accumulated international liquidity in gold and currency reserves and the budget surplus would provide a basis for settling every single problem. But, as the crisis grew deeper, the government grew aware that the financial leverage at their disposal might prove insufficient to cope with the situation. So, the Cabinet changed its policy, resorting to more reasonable and better-thought-out moves; most importantly, these are planned over a longer period of time”.

On Thursday, as a result, Prime Minister Vladimir Putin was able to tell a session of the Government Presidium that Russia managed to avoid the worst shocks of the crisis. Businessmen and ordinary people alike will receive an opportunity to gradually adapt to the situation. Besides, every effort was made to prevent a landslide devaluation of the national currency, the rouble, support the branches of the production sector worst-hit by the crisis, and extend help to the affected regions.

6 February 2009

Vyacheslav Solovyov

Voice of Russia World Service

http://www.ruvr.ru/main.php?lng=rus&q=101035&cid=20&p=06.02.2009 (in Russian)

Editor’s Note:

Note well that the present economic crisis has its origins in the lunatic neoliberal economic policies of the USA and the West. In short, America is a boastful nation brought low by its belief in its own lies. By this, I mean the government, the chattering classes, and the so-called élite. The ordinary people of America did not benefit from the Clinton/Bush charade; indeed, they were raped worse than anyone abroad as their jobs were “downsized”, “outsourced”, or picked clean of benefits and reasonable compensation by rapacious businessmen backed by feckless politicians.

These fat cats are EVIL, no doubt on that score. They bring cheap goods into this country produced in nasty Third World sweatshops and close down plants employing honest American workers. That is, profit is God, and if one must sacrifice the livelihoods of simple families to it, why, so be it, can’t they get jobs in the “service sector”, anyway?

Russia is wiser as it produces more of what it needs domestically and it does not need to import strategic materials. After all, Russia has a trade surplus, and the USA has a trade deficit. Hmm… It does make one wonder, doesn’t it?

For those of us in Orthodoxy, the present crisis highlights some traits of Anglo-Saxon Americans that must be watched for with care in many of the recent converts. Two things are worrisome, “positive mental attitude” and “moving on”. The first leads to boasting, lying, and a covering of the facts. The latter leads to a juvenile demand that the guilty escape scot-free, not only letting the culpable evade the consequences of their actions, it ensures that no lessons are learned from any problem (indeed, it impedes the resolution of the situation in the first place, nicht wahr?). These attitudes fanned the economic crisis and have created a crisis in the Church (but, no one is allowed to say so), so, they must be attended to. To put it simply, don’t buy a pig in a poke, and don’t listen to therapeutese spouted by ex-Episcopalians…

Groundhog Saw Shadow of Unemployment

A statue of the Canadian “groundhog”, Wiarton Willie, in Wiarton ON. It started as a spoof in the 50s by a bunch of partying Canucks anxious to help a journalist with a story, and it just GREW. Alas, the original Willie died at the ripe old age of 22 in 1999, but, Wee Willie is carrying on the tradition.

In the last few years, Punxsutawney Phil the groundhog has made one wrong forecast after another. The American tradition, which marked its 122^nd anniversary on 2 February, states that if on that day, if the groundhog leaves the burrow where he was hibernating and he sees his shadow, which happens if the sun is shining, spring is still a long way away.

Regardless of the groundhog, the weather in Russia is still colder than in the United States, even in Pennsylvania, a state in the north-east that is the home locale of all the Punxsutawney Phil groundhogs over the years. However, now, the two countries share a problem. The second stage of the economic crisis has set in, when unemployment requires more urgent attention than the banking system. The unemployment rate in the United States is the same as in other countries. In early 2008, it was 4.9 percent in the United States as compared to 7.2 percent today. In the European Union (EU), the figures are 6.8 percent and 7.4 percent, respectively. In the estimate of the Ministry of Health and Social Development, Russia also has up to 7 percent unemployed, just like in Europe and America.

The US administration’s measures are becoming increasingly “socialist”. For the time being, everything is concentrated around “Obama’s package”, which is worth almost 900 billion USD (32.641 trillion roubles. 701.46 billion euros. 623.43 billion UK pounds). The package was approved by the House last week, and should be endorsed by the Senate this week. It contains simple, but, smart measures, such as a long-term loan of 1,500 USD (54,454 roubles. 1,170 euros. 1,039 UK pounds) per capita for the purchase of a truck or car. Washington is hoping that even such a small sum will help restore the sales of US cars, which have fallen one-third as compared with these in 2007. Needless to say, this is somewhat different from the prohibitive car import duties that have been introduced in Russia. In effect, this is a reverse action aimed at supporting domestic car-makers, but, it will produce the same effect.

We will see the positive results of Obama’s package at the end of the year or later. However, analysts are already talking about the failure of the previous package by Treasury Secretary Henry Paulson. At the Davos World Economic Forum It was described as a “failure” by Joseph E. Stiglitz, who won the 2001 Nobel Prize in Economics. His assessments of unexpected crises have been uncannily accurate. He said that the first 700 billion USD (25.412 trillion roubles. 546.21 billion euros. 484.89 billion UK pounds) given over to the banks was wasted, for they did not resume any loans. Professor Stiglitz likes the idea of setting up a special bank for problematic assets by buying them from the banks even less. As a result, they will simply run bankrupt, because banks are kept afloat by the problematic assets for which they may still get something in the future. Once again, we can draw unpleasant parallels with the EU and Russia, where banks are reluctant to issue loans, and nobody knows what to do with bad assets. Should they be written off as Prime Minister Vladimir Putin suggested in Davos? What will happen with the banks in this case? That should be thoroughly analysed.

Professor Stiglitz doesn’t like Obama’s plan either. He explained that it would lead the United States to the third stage of the crisis, an unacceptable internal debt up to 10 trillion USD (363.029 trillion roubles. 7.803 trillion euros. 6.927 trillion UK pounds) and a budget deficit of 1.4 trillion USD (50.824 billion roubles. 1.092 billion euros. 970 million UK pounds). These figures are unprecedented since the end of World War II. Interest rates on this debt that will have to be paid to American creditors are a third problem (in addition to finances and unemployment). In this case, many nations, not only the Americans, will wish they could hibernate together with Punxsutawney Phil the groundhog for a long time to come, because the ideas of how to extricate themselves out of the crisis have been very similar everywhere so far.

2 February 2009

Dmitri Kosyrev

RIA-Novosti

http://en.rian.ru/analysis/20090202/119930141.html (in English)

Prime Minister Putin Presents Measures to Overcome the Current Economic Crisis

This Voice of Russia multimedia presentation focuses on the speech given by Prime Minister Vladimir Putin at the Davos Economic Forum. Click on the URL below, then click on the image of Prime Minister Putin (the same as the image above) or on the blue words to the right of the image. Both methods shall get you to the presentation.

URL:

http://www.ruvr.ru/main.php?lng=eng&q=39632&cid=206&p=29.01.2009