Manufacturers and merchants of staples warned Prime Minister Dmitry Medvedev of the likelihood of sharp price hikes as the New Year’s holiday approach due to the introduction of the Platon toll payment system, the target of truckers’ strikes.
Welcome to our column, Russia Update, where we will be closely following day-to-day developments in Russia, including the Russian government’s foreign and domestic policies.
The previous issue is here.
–The Non-Hybrid War
–Kashin Explains His âLetter to Leadersâ on âFontanka Officeâ
–TV Rain Interviews Volunteer Fighter Back from Donbass
–âI Was on Active Dutyâ: Interview with Captured GRU Officer Aleksandrov
Russian business people have withdrawn at least $60 billion from Russia in this year, a lower figure for capital flight than has been posted in past years, TASS reports.
Anton Siluanov, minister of finance reported that the outflow of capital was far less than last year, and was slated to reach $60 billion by the end of the year (translation by The Interpreter):
“The outflow of capital has significantly slowed, this is also a measurement of our actions in the area of budget policy. The outflow for 11 years was $53 billion. Our estimate is $60 billion by the end of the year, and that it twice as low as what was made in initial assessments.”
What Siluanov neglected to explain, however, is that last year in 2014 — when Russian annexed Crimea, invaded the Donbass and suffered Western sanctions — capital flight was “massive,” according to Moscow Times, and at $151.5 billion, double what it was in 2013, AFP reported.
That trend prompted estimates of $70 billion in capital outflow this year, but it appears that it will fall shy of that amount, possibly because businesses simply have less capital to export, with the ruble crash devaluing their revenue and savings.
President Vladimir Putin himself admitted in his annual address to parliament that a government program to offer a “capital amnesty” was moving slower than hoped. He urged officials to step up their work to facilitate returns — a process that may get some unanticipated boost from new sanctions against travel, food and other businesses in Turkey, a haven for Russian business. Now Turkey has been declared to have “stabbed Russia in the back” and served as “accomplices to terrorists” for shooting down a Russian war plane that strayed into Turkish air space near the Syrian border.
— Catherine A. Fitzpatrick
We calculate that the total volume we will receive next year will be more than 40 billion rubles and this will enable ut to allocate a payment to the concessioner and use the money of the road fund for specific investment projects.
Critics of the system are concerned about corruption and kickbacks, as they were with the huge contracts obtained by the Rotenberg brothers in the Sochi Olympics. Russia’s lack of good highways is a major impediment to development, and Russian Railways, which takes the place of a highway system in many remote areas has cut back service and has been the subject of allegations of corruption.
— Catherine A. Fitzpatrick