russia (compared with china). group members aaron sakulich ryan schultz craig schroeder
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Russia
(Compared with China)
Group Members
Aaron Sakulich
Ryan Schultz
Craig Schroeder
General Facts
Russia China
Location Eastern Europe, Northern Asia
Central Asia
Capital Moscow Beijing
Population 143 Million 1.3 Billion
Currency Russian Ruble Chinese Yuan
Russia: Geography
China: Geography
Economic Comparison
Russia China
Growth Rate 7.3% 9.1%
Unemployment 8.5% 10.1%
Inflation Rate 13.7% 1.2%
Per Capita Income $8,900 $5,000
Trade Balance $59 Billion $39 Billion
Trade Bal. Ratio 2.17 16.14
GDP Production $1.282 Trillion $6.14 Trillion
Deficit $10 Billion $319 Billion
Debt 153.5 Billion 197.8 Billion
Debt Ratio 138.2 20.17
Deficit Ratio 32.10 30.1
12%
23%
65%
Labor Composition
50%
22%
28%
AgricultureIndustryServices
Russia China
Events in Russia
Yukos is Russia’s largest oil exporter
Putin (Russian Government) targeted Yukos
Believed to be a move to destroy its CEO, Mikhail Khodorkovsky.
What Happened
Targeted by Russian GovernmentCharged $27.5 billion in “back taxes” Important assets auctioned off at low
prices indirectly to the government– Sold Yuganskneftegaz– Produced 60 percent of Yukos' oil
Current Status
Filed Bankruptcy in Russia– Tried to prevent sale of assets– Not protected by the Russian Courts
Filed Bankruptcy in Houston, Texas– Judge dismissed the case
Yukos sues for over $20 billion in violations of bankruptcy stay
Economic Warnings
U.N. economists warned Russia to watch their pursuit of this issue.– They say it will drive away foreign investment and
hurt the country’s economy.
When a country’s property rights can easily be challenged by the government, international investors react very badly.
Economic Warnings
Russia’s economy is very vulnerable because it relies heavily on gas and oil.
The Yukos affair is not going to encourage an internationally competitive industry.
Until the legal outcome of the Yukos affair is announced, investors may be apprehensive.
Symptoms of Problems
Yukos made up 1/5 of the countries main RTS stock index by capitalization
In recent months the RTS has lost about 1/3 of its value.
Because of the affair many are scared to trust banks, 10 percent of depositors of each credit organization declined banking services.
Economic Outlook
GDP– 7.3% higher in the first 5 months of 2004
compared to 2003– Expected growth to hit 10% in 2006
Domestic consumption is rising steadily
References
1. CIA World Factbook – China http://www.cia.gov/cia/publications/factbook/2. CIA World Factbook – Russia http://www.cia.gov/cia/publications/factbook/3. Countrywatch – China http://www.countrywatch.com/4. Countrywatch – Russia http://www.countrywatch.com/5. Herald Tribune. http://www.iht.com/bin/pring.php?file=528051.html6. Putin.ru. http://putinru.com/new/item/26633.html7. Access News. “UN Warns Yukos Affair Could Hurt Russian Economy.”
http://www.axcessnews.com/business_072204.shtml8. Mosnews.com. “BP Chief Calls Oil Company’s Experience in Russia ‘Positive’”
http://www.mosnews.com/money/2005/02/24/bppositive.shtml9. The Mercury News, “Judge mulls Yukos bankruptcy dismissal.”
http://www.mercurynews.com/mld/mercurynews/business/10981740.htm?1c10. Yukos homepage. http://www.yukos.com/11. New Times. “Will back taxes ruin Yukos?” http://www.newtimes.ru/eng/detail.asp?
art_id=1206
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