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Russia Takes Double Punch As Vanishing Workers Fan Prices

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http://www.bloomberg.com/news/2014-09-16/russia-takes-double-punch-as-vanishing-workers-fan-prices.html

The aging workforce is packing a double punch for the Russian economy.

The unborn generation of the 1990s, a period of hyperinflation and instability after the Soviet breakup, left the nation depleted of younger workers. Unemployment is at a record low, putting pressure on wages (RUMEREAL) and helping keep inflation near the fastest since 2011. The poor demographics are shaving 0.5 percentage point off economic growth a year, according to the Higher School of Economics in Moscow, which estimates the working-age population will shrink by as many as 15 million people, or more than the size of the Russian capital, by 2030.

Aging populations are unsettling central bankers from Tokyo to Frankfurt in their struggle to prevent deflation as older workers tend to defer consumption in favor of savings. In Russia, the threat it poses is the opposite: entrenched inflation that risks shackling monetary policy already lurching from one crisis to another since Crimea was annexed in March.

“Taking into account low unemployment and tight supply on the labor market, wages will remain at a high level, affecting inflation,” said Natalia Orlova, chief economist at Alfa Bank in Moscow. With the central bank increasingly drawing attention to poor demographics, it’s “in effect saying it can do nothing for the economy, whose problems are structural in character.”

Russia is caught in a vise of elevated inflation and stalling economic growth. The central bank, which has increased borrowing costs three times this year, has pointed to demographics as a long-term drag on the economy in every statement since April after meetings to review interest rates.

It seems Russia needs lots of immigration, vast resources and lots of land.

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Does Russia still have to pay the pensions of the other USSR states?

Cos places like Lithuania and the Ukraine have seen a far greater fall in their population than Russia. In fact over the last 20 years ethnic Russians have been moving back from the other USSR states into Russia.

I suspect Russia has problems, but no greater than Europe in general. Just another Russo-phobic yank propaganda piece.

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Just another Russo-phobic yank propaganda piece.

This is obviously a given. You can't have news in the media these days without accusing Putin of being worse than Stalin/ISIS etc or denigrating Russia.

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Diminishing population is nothing new, Russia had a spectacularly low birth rate through most of the Communist era, let alone the 90s. This documentary by Marcel Theroux from 2008 goes into it in detail. Large families were incredibly rare, there are more now among the new rich.

"Death of a Nation"

With jobs these days being far less physical, I don't know why ageing populations are feared so much.

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http://www.bloomberg.com/news/2014-09-16/russia-takes-double-punch-as-vanishing-workers-fan-prices.html

It seems Russia needs lots of immigration, vast resources and lots of land.

13 February 2012

Prime Minister Vladimir Putin was mocked by his own countrymen today after urging Russians to start having more sex to put a stop to the country's declining population.

.. 'We are facing the risk of turning into an ‘empty space’ whose fate will not be decided by us.' 'The historic price of the choice between action and inaction is nearly 50 million human lives over the next 40 years.'

Incentives..

http://www.dailymail.co.uk/news/article-2100610/Vladimir-Putin-ridiculed-demanding-Russians-sex-halt-declining-population.html

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Does Russia still have to pay the pensions of the other USSR states?

The real pension liability has been all but eradicated.

High inflation after the collapse of the Soviet Union reduced the size of pensions to pitifully inadequate levels. I used to do a lot of work in Russia and I clearly remember the tragic pensioners that would cluster outside Moscow metro stations, selling cheap tat like felt shoe liners and Chinese toothbrushes, in the depths of a Russian winter, because they were starving. Plenty of them also lost their rented apartments when they were "developed".

These oldies had survived Stalin and Hitler but, unless they had sympathetic kids who were willing and able to help them out, they were dying in droves during those years.

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I was on a plane from Manchester to Copenhagen in 99, and got talking to a guy (English, Manchester) who was carrying on to Moscow. He had a £400pw contract to repaint walls and corridors of a school.

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Chinese are up to the job.

I think that might be what the chinese have in mind.

don't forget india too....in fact indian demographics look WAY better than china for future prosperity.

russia, a country of 140 million with vast resources does not stand a chance against 2.5 BILLION asians that need those resources, if they decide to get uppity over ukraine/syria ec.

they would be much wiser to let the mad mullahs fight themselves.

Edited by oracle

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I was on a plane from Manchester to Copenhagen in 99, and got talking to a guy (English, Manchester) who was carrying on to Moscow. He had a £400pw contract to repaint walls and corridors of a school.

I wonder what an electrician could earn out there...

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I was on a plane from Manchester to Copenhagen in 99, and got talking to a guy (English, Manchester) who was carrying on to Moscow. He had a £400pw contract to repaint walls and corridors of a school.

He was pulling your leg...

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The real pension liability has been all but eradicated.

High inflation after the collapse of the Soviet Union reduced the size of pensions to pitifully inadequate levels. I used to do a lot of work in Russia and I clearly remember the tragic pensioners that would cluster outside Moscow metro stations, selling cheap tat like felt shoe liners and Chinese toothbrushes, in the depths of a Russian winter, because they were starving. Plenty of them also lost their rented apartments when they were "developed".

These oldies had survived Stalin and Hitler but, unless they had sympathetic kids who were willing and able to help them out, they were dying in droves during those years.

Yes...a lot of the former east (Russia also) is now on streetview. What is clear is that while a few major cities are growing, modernizing with new investment, the villages of wooden houses in the countryside are literally rotting away. I think Belarus had a rural population of 6 million mid century...now down to 2. I suspect the young either move to the big cities or if they are EU abroad altogether and these villages are inhabited entirely by the over 60s.

Perhaps this isn't a big issue in the former east, where people never expected to use their houses as retirement vehicles, such a chain of events here would change the plans of many, however.

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I was on a plane from Manchester to Copenhagen in 99, and got talking to a guy (English, Manchester) who was carrying on to Moscow. He had a £400pw contract to repaint walls and corridors of a school.

I understand that if you are Russian you get a flat. If you are foreign the housing costs are extortionate.

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I think that might be what the chinese have in mind.

don't forget india too....in fact indian demographics look WAY better than china for future prosperity.

russia, a country of 140 million with vast resources does not stand a chance against 2.5 BILLION asians that need those resources, if they decide to get uppity over ukraine/syria ec.

they would be much wiser to let the mad mullahs fight themselves.

If it was simply a question of demographics, Chindia would have cleaned up 100 years ago. As you imply, India isn't exactly resource rich...even today, despite being the sweatshop of the world it cant even produce a current account surplus.

I don't care how many soldiers they have, Russia is a nuclear power and as such unlikely to ever be attacked.

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Diminishing population is nothing new, Russia had a spectacularly low birth rate through most of the Communist era, let alone the 90s. This documentary by Marcel Theroux from 2008 goes into it in detail. Large families were incredibly rare, there are more now among the new rich.

"Death of a Nation"

With jobs these days being far less physical, I don't know why ageing populations are feared so much.

According to the article it means wages are going up, very bad. :lol:

I guess this is bad if you are a businessman , perhaps.

I tend to agree though. I think Japan Korea and Germany, all of which seem heavily invested in robotics will illustrate just how much GDP is not human capital anymore, and will prove the obsolete workers:retirees ratio that the anglo-American model is so obsessed with to be wrong, and indeed harmful.

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Perpetual growth.

An impossible ideal.

No, quite possible actually, growth comes through better technology and better use of resources.

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