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Tuesday, December 6, 2016

From the fall of the ruble will suffer another nine countries


According to the world Bank, from the current problems of the Russian economy will seriously suffer another nine countries, including NATO and the European Union. In particular, we can expect devaluation of the national currencies in some CIS countries. Since the relationship between the economies of Russia and its neighbors are well known, such a scenario was recognized by the countries of the West are valid.

The global economy is a very fragile mechanism, in which all parts are closely connected and depend from each other. It is silly to think that you can block any one part without serious damage to others. When the United States, European Union and other countries took a decision on sanctions against Russia, warned them of the inevitable consequences, but political motives outweighed economic ones. As expected, paying for the Euro-American geopolitical ambitions are not only and not so much Moscow, how many other countries. First and foremost, the architects of the sanctions supposedly wanted to defend against “Russian imperialism”.

There is nothing to feed

“It was all counted, weighed and found to be acceptable. Chop wood – chips fly

As writes The Guardian, citing information from the world Bank, foreign remittances depends 21% of Armenia’s economy, 12% of Georgia’s economy, 31,5% of the economy of Kyrgyzstan, 25% of economy of Moldova, 42% of Tajikistan’s economy, 5.5 percent of the economy of Ukraine, 4,5% of the Lithuanian economy, 2.5 percent of Azerbaijan’s economy and 12% of Uzbekistan’s economy. A significant part of remittances to these countries constitute cash from Russia.

The total loss of the above mentioned countries in the coming year, the newspaper estimates at $ 10 billion. Most of all can suffer Kyrgyzstan, where funds previously received from Russia accounted for almost 80% of all money sent by migrants. Russian money accounts for about 40% of the total amount of money transfers to Ukraine, Moldova, Georgia and Armenia.

Thus, the GDP of other Central Asian and Eastern European countries can seriously sink this year due to the termination of remittances from migrant workers. In addition, it can seriously rise in unemployment – due to the tightening of Russian migration legislation. The most serious danger threatened, respectively, Tajikistan, Moldova and Armenia. However, Georgia and Uzbekistan are also in the high risk zone.

It is significant that even the member of the European Union Lithuania, as it turns out, to a certain extent depend on the money sent from Russia. Let the figure is low, but in light of this factor is the EU decision to impose sanctions against Russia finally looks shot in your own foot.

Russia is in the strategic plan can win (theoretically). During the recent “fat years” analysts have advanced various proposals to combat illegal migration and to limit the entry of legal migrant workers. But all restrictive measures was for the most part meaningless up until almost the minimum guaranteed income visitor from Central Asia in Russia is much higher than its unlikely the salary at home. In a situation cheap ruble problem so long tormented economists and nationalists, has a chance to be solved in a natural way. As a result of reduced and inter-ethnic tensions, and unemployment.

However, it is unlikely that the development will be so unique. Most likely, the Central banks most affected by the fall of the ruble countries will take its own measures, which are unlikely to appeal to most of their citizens.

Pursuit

Russia – the second largest economy in Europe (after Germany) and the largest in the CIS. Moreover, the GDP in second place was Kazakhstan in 2013, almost 10 times less Russian.

The currencies most dependent on trade with Russia has already started to decline. Hardly was cropped currency panic in Belarus, fell to Armenian dram, Kazakh tenge has been kept, but we must be aware that all benefits from cheap ruble for Russia is both a loss for the neighboring countries. And it is unlikely they will silently watch how reduced their exports to Russia, and captures the market cheap Russian products. Likely taken certain measures to improve national competitiveness.

What happens when a state believes its currency is unfair, last week demonstrated the Switzerland. The Central Bank of the country decided that the rapidly falling against the dollar, the Euro is not the best benchmark for the country bankers. After the abolition of the peg to the Euro, the Swiss franc rose sharply by 30% against the Euro and a quarter against the dollar. Exporters upset a few currency brokers around the world went bankrupt, the Euro’s drop accelerated.

When talking about the fall of the hryvnia or rubles, it is usually added to “everything is clear” – Ukraine has experienced a coup and is waging a war, Russia is under sanctions and is dependent on oil prices.

But, say, NZ online broker Global Brokers NZ was very far from politics. Simply because of the sharp rise of the franc, the company has no more money. And this bankruptcy will be not the only one. Serious losses suffered by such large financial institutions as Deutsche Bank, Barclays and Citigroup.

The ruble is not so integrated into the global financial system, as the Swiss franc, but for the neighboring countries, he has for many years been a full-fledged reserve currency. And when dramatically decreases the cost of the reserve, there is only one way out – to let the value of its currency. Here only, unlike the franc, the currencies of countries that depend on the ruble, most likely, will rush to the fall of similar depth and duration.

But between Russia and the former Soviet republics there is a big difference not only in economy but also in the size of the reserves. Roughly speaking, “where the thick dries, thin will die”. Russia, with all the meaningless efforts of the Central Bank to defend the ruble, is still in sixth place in the world in terms of international reserves with 385,5 billion. On the second place among CIS countries Kazakhstan 28.5 billion, in Uzbekistan 17 billion, Belarus – 5.8 billion from Moldova – 2.3 billion to treat Seriously the official data on foreign exchange reserves of Ukraine is impossible.

Lowering their currencies, the countries of the CIS will support private exporters and migrant workers, but will cripple the General welfare of the citizens. But given the availability of almost every capital are enough people who want revolution, the political situation in all countries affected by the depreciating ruble will become extremely unstable. In Armenia, a terrible tragedy in Gyumri has become a cause for the pumping anti-Russian hysteria, escalating into anti-government protests.

Felling

Hardly economic advisers of Obama, Merkel and other political leaders of the countries that have imposed sanctions against Russia, did not foresee that the attack on Moscow inevitable impact on Chisinau, Tbilisi, Vilnius, Bishkek, etc. they are Unlikely not counted as a blow to the very European Union a reduction in tourism from Russia, the restriction on the export of European goods to Russia and other aspects of sanctions and a General weakening of the Russian economy.

It was all counted, weighed and found to be acceptable. Chop wood – chips fly.

And now it becomes clear repeatedly breaks lately fear of the “Russian propaganda”, expressed in restrictions on the broadcasting of Russia Today, and the attempts to create a “antipropaganda channel”.

In this situation, “Kremlin propaganda” no need to lie and distort. Consistently enough to convey to the inhabitants of the CIS countries, the European Union and temporarily hovering in the middle of one simple idea: Washington and Brussels do not care about you. To punish Russia, they have sacrificed your economic well-being. You allowed them that? Do you think that friends do that?

The Guardian believes that because of the financial problems in Russia affected 9 countries. Actually, all will suffer.

source

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