Macro Advisory Eurasia- Russia Consulting 

Eurasian Union, September 2017 

Steady Progress. Progress in building the trade and legislative structures within the EaEU continues on a slow but steady course.This is as expected given the experience of how long it took the EU.

Gradual trade integration. The best KPI for EaEU progress is the share of intra-EaU for each member, although this is not perfect. Here there is also steady, but slow, growth.

No immediate expansion. There is no sign of any potential new members joining the five-country union over the medium term. The relationship with Uzbekistan is growing and the 30-million people country is expected to join eventually. Moldova gained observer status, but domestic politics will stop it joining. A free trade agreement with Iran should be signed this year.

Belt and Road will make a difference. This expanding rail network means that transport links across and in/out of the region are improving and trade is becoming easier and cheaper. That may be a power driver for growth in some areas in the future. Chinese companies are more interested in investing in rail infrastructure and in other projects along the transport corridors.

Please read the full version of the article here.

Rosneft and Statoil agree to move joint development of the North-Komsomolskoye field into the next phase

Russia Sanctions Guide by Chris Weafer

What difference have sanctions made and, is that about to change?

Economy has adjusted to new conditions. The economic impact of the sanctions applied against Russia by the US, EU and other states in 2014 has been relatively slight. The reason is because the government was forced, due to the combination of sanctions, counter-sanctions and lower oil revenues, to address problems in a real way and not just “kick the can down the road” as before. The economy has now adjusted to (pre-August 2017) sanctions and lower oil revenues and is on course to grow by 1.4% this year.

NRCC Networking Meeting in Oslo - 29 August 2017

On 29 August 2017, the NRCC Networking Meeting took place in the facilities of the Norwegian Shipowners’ Association, Oslo. About 55 participants took part in the meeting.

Mr Jarle Forbord, NRCC Managing Director, opened the meeting by welcoming all the participants. Then Ms Anu Fredrikson, Director of the Arctic Economic Council Secretariat, held a presentation about the Arctic Economic Council business to business activities with focus on Russia. 

Working visit to the Møre Maritime Cluster in Ålesund on 21-23 August 2017

The working visit to the Møre Maritime Cluster in Ålesund was organised on 21- 23 August 2017.

The delegation was represented by H.E. Ambassador of the Russian Federation to the Kingdom of Norway, Teimuraz Ramishvili, Mr Igor Kozhedub, Attaché, Embassy of Russia in Norway, Mr Timur Chekanov, Attaché, Embassy of Russia in Norway, Mr Alexander Anikin, Trade Representative, Trade Representation of Russia in Norway, Mr Alexander Lizogub, Head Expert, Trade Representation of Russia in Norway, Mr Sergey Alekseev, Head of Arctic Engineering Center, Krylov State Research Center, Ms Liv Monica Stubholt, Chair of the NRCC Board, Mr Jarle Forbord, NRCC Managing Director and Mr Rune Methi, NRCC Senior Project Manager.

Regarding the program, on the first day the delegation visited Optimar AS presented by Mr Asbjørn Solevågseide and Skipsteknisk presented by Mr Hans Ove Holmøy and Ms Inge Bertil Straume. The evening continued with a dinner at the Atlanterhavsparken aquarium.

Russia Macro Monthly eport for August 2017: Economic Recovery Solidifies

Please find Russia Macro Monthly report for August 2017, prepared by Chris Weafer, Senior Partner at Macro-Advisory Ltd from Moscow. Short summary of the report:

Economic Recovery Solidifies

Economic recovery is solid. The Economy Ministry expects Q2 GDP growth may be 2.7%, bringing growth for 1H to 1.6% and ahead of consensus for the full year. That is still on the optimistic side. The Gaidar institute forecasts average growth at 1.5% for 2017 & 2018.

Driven by both investment and consumption. Q2 investment growth was faster than the 2.3% seen in Q1, while, in June, consumption grew by 1.2% YoY and looks set to strengthen in 2H. Confidence indicators weaker, but still positive. Manufacturing and services PMI are both still in expansionary territory, but not as high as earlier in the year. Lending to SMEs is recovering, according to CBR data, and the average interest rate is falling.

Sanctions. President Trump, reluctantly, signed the new sanctions bill into law. The new law does not immediately impose new sanctions but raises considerable concern over future expansion and adds to Russia risk uncertainty which may slow inward investment.

Muted Russian reaction. The government’s only reaction was to replicate the US expulsions of Russian diplomats (albeit a larger number) of last December. So far there are no signals of any further actions but that may change after the vacation period.

Far East Forum. The next major event will be the BRICS Forum in China in late August and the Far East Economic Forum in early September. Russia has simplified the visa process to attract delegates and clearly hopes to show strong Asian investor interest.