globalEDGE Blog - By Tag: russia

While Cyprus is experiencing economic woes and Turkey is finding its way out of a huge European debt crisis, the energy relationship between Cyprus and Turkey regarding gas and oil is causing stress for both countries. On Wednesday, Turkey announced the suspension of energy projects with Italian giant ENI because the company expanded the exploration for oil and gas to Cyprus. ENI’s decision on the project expansion in Cyprus has created hope of economic recovery Cyprus but it infuriated Turkey since the project would cut down the energy plan in Turkey.

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After an 18-year effort, the Russian Parliament has finally approved the country's entry into the World Trade Organization. While the other nations of the W.T.O. had agreed to Russia's entry in December, the acceptance still required a majority vote in Russia's lower house of Parliament, known as the Duma. What could have been a routine acceptance, since President Vladimir Putin's United Russia party controls the Duma, was interrupted by strong opposition by the unusually vocal Communist Party. As the ratification dragged on, Russia's economic minister Andrei Belousov warned lawmakers that the agreement reached towards the end of 2011 would expire if not ratified by the mid-July deadline. This sparked a vote by the Duma, which voted 238 to 208 in favor of joining, with one abstention.

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In today’s blog post for the Global Real Estate Series, we will be looking at the commercial market for real estate, including key aspects of the industry as well as future outlooks. The market for commercial real estate is comprised of office, industrial, and retail properties that are intended to generate a profit, either from capital gain or from rental income. Global commercial real estate markets have seen much improved growth recently, up from the lows of a few years ago.

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When people think of online shopping today, paying for goods or services via the internet usually comes to mind. However, in Russia this is not the case. More than 80 percent of transactions at Russian online megastores are in cash. Russian customers are not very comfortable with online transactions so businesses in Russia have developed alternatives for the online shopping model.

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As wheat prices rise due to insufficient global supply, the big question is how concerned should we be about the high prices? Wheat is the latest agricultural commodity to raise costs. Wheat prices have risen 50% since last June, and prices are the highest since 1973. This is due to droughts and fires destroying crops in Russia, who is the third-largest wheat exporter in the world.

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Seasonal rains and high global temperatures have caused many problems for the agricultural industry this year. Many countries rely on agricultural investments for income to meet global food production demands, making this a hard year for many regions. Food insecurity is an increasing problem throughout the world. Food production has been greatly affected by climate change as both heavy rains and dry fields have taken their toll on agriculture.

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The BRICs markets – Brazil, Russia, India and China – have survived the global economic crisis quite well, emerging even stronger than before. These counties have large surpluses in international trade as well as reserves in foreign currency, which really helped in the last downturn. They are on pace to equal the G7 in size by 2032, seven years earlier than originally predicted.

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Do you want to go out to eat? People around the world are saying “yes” to this answer, but are finding different venues to satisfy their hunger. In fact, you might be surprised to hear that 20% of the world’s food venues are street vendors! Did you know that of the 10 largest markets in the world in the food services industry, five are in East Asia? The industry is making some major shifts which are also specific to geographic location.

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Unfortunately, the global economic crisis was not biased when it struck industries across the world.  Driven by high-rolling, high-ego aficionados, the art industry was impacted more than one would have expected.  With artworks ranging from just $500,000 to well into the millions of dollars, buyers who take interest in these unique items also felt the burn from the instability of the world markets and significant decrease in personal wealth.  As a matter of fact, in 2007 the art market was valued at $65 billion, down from $113 billion just five years before.  Today it is estimated to be as low as $50 billion.

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Much of Europe is heavily-reliant on Russian pipeline gas to satisfy its energy needs-- However, this could change fairly soon. Oil companies and private investors are carefully weighing the initiatives which may be set forth following the 2009 Black Sea Energy and Economic Forum. The Black Sea is home to a wealth of unconventional oil and gas resources which could possibly rival Russia in the sheer volume of output and usage.

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Russia has endured a long courtship period with the World Trade Organization - 16 years of talks and counting - yet official membership has always remained just out of reach. There are currently 153 members in the WTO, ranging from Albania to Zimbabwe. Russia is now the only BRIC country not to join, and is by far the largest economy of all the world’s non-members.

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“Bailout” has become an all-too-familiar word as of late, but a Russian auto industry bailout brings an interesting (though not entirely positive) twist to the dreaded word. The goal of this particular bailout is aimed more at social stability than in creating a leaner and more competitive industry for the future. The Russian bailout will focused ensuring employment of autoworkers by avoiding layoffs - in spite of plummeting demand.

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