his comrades would die he gave his own life to save his friend. alone in welcome to on the money would have business of russia is business i'm people of russia's economy continues to expand though just barely this is prompted the government to rearrange budget priorities you continue down the path of economic reform on top of this ukraine is back in the news in a very big way and talks with iran move the oil price. to discuss these issues and more i'm joined by dimitri baba he is a political analyst with voice of russia radio station we also have jacob now he is the chief economist with morgan stanley russia and we also have got us off lisa volek he's the chief economist at deutsche bank russia the state of russia's

economy flatlining well i mean look we've had we've had maybe three disappointments this year i think when you sort of put it on the table one is growth we all know about that investment being negative but but other sources of growth also not not far on all cylinders we've seen also the current account decline it's not so much on the trade side but it's more in services and income it's gone down to under two percent of g.d.p. and we've also seen inflation yet this autumn pick up again despite having a pretty good harvest so so that's that's that's three pieces of of unfortunate economic news but i think actually there's a pretty good strategy out there i think that we shouldn't over interpret the bad news so to go through them first of all the growth a lot of the driver of the slowdown has been the government putting the brakes on government spending and that process is a. so i think the slowdown in investment will pick up

a little bit. and that will help growth pick up a little bit next year on inflation i think we have a central bank that's building credibility it's got a difficult inflation target next year but it is we think possible to deliver it with a prudent budget keeping military growth under control with a good harvest with a utility. freeze or cap on price increases so on growth we see it being better on inflation we seeing it being better i think that the biggest change maybe on the ruble where with the we could current account and still high inflation compared to what we see in america and and europe we're probably going to see the ruble weakening more rapidly as we've seen the last few months going into twenty fourteen and that's a change from what we had in the post-crisis period when we had a pretty flat ruble. the bitter pills already been swallowed then apparently well i

think i would agree here with jacob that we do have some possibility to accelerate on the world front including in what has until recently been probably the weakest link which is investment so investment construction this is probably going to recover in the course of next year i think this tariff freeze that we're going to have next year on the electricity on gas is going to provide some breathing space for the manufacturing sector even though this is a temporary phenomenon this is one of the things that will be supportive then on the consumer side i think the consumer is still quite quite strong and while there are some worries about some of the cuts on the in the social sphere. i think generally interims of the. strength that we see is specially in the regions of the russian consumer that's cause for optimism. and then perhaps we will have

some you know still mule the including in the beginning of the year with a little bit sort of leave that will provide some some impetus and if there are there is a good beginning to the year of well then hopefully the year will go in a bit of a better way to make me the political spin of the month so i see that. i am always good while that when i read in the western press that after coming back to paul we can start that to tighten the screws because we never had a more liberal team running the economy now well these team has a lot of importance and one of the bad things about this team is that these people can see that only themselves to be professionals are those they say they just don't understand what they're talking about but we have basically quite a mist of gaidar direction running the economy the economy economic development minister mr. easy decide all gaydar we have had to be are now building up from there you know high school of economics running the central bank and with these

people you may have a lot of trouble with production but you'll always have stable finance you have be credential reserves you sometimes have cuts in social spending but very rarely you have total collapse or also over them really really it's worshipping the balance sheet that this is the most important thing the balance sheet balance the balance sheet is. a great foundation that i probably russia's main competitive advantage that it should exploit to a greater degree but on top of this foundation i think starting from next year the hope is that they will be able to build something in the form of infrastructure push infrastructure development that's the key issue i think longer term yeah i think i think the one interesting change that we're seeing is a big focus on tax compliance and bearing down on the gray economy at the moment because there's a bit of us. difficult position because growth is weeks of revenues

a week but they have expenditure ambitions and they want to run a balanced budget or a gentleman let's change gears here you know so if it's not about iran and oil we were talking before the program how. an agreement or a tentative agreement with the western powers and world powers in iran could have ricochet effects ok because we have met with your lover of coming out the foreign minister saying well you don't need anti-ballistic defense on any war in any more in europe but then again the price of oil has dropped to because it's positive news the possibility of hostilities in that part of the world have gone down at least as this interim agreement has been pushed forward what about russia how does that affect russia and when they're looking at the oil price here well clearly russia is very dependent on oil prices still and including in terms of its real economy in terms of the dynamics of g.d.p. so my sense is that clearly in the markets you see significant growing pessimism on

the oil price outlook the fact that the geopolitical premium as it is called these of the oil prices is likely to contract further and accordingly of that is the case perhaps the hope to some degree in russia i think is that this somewhat lower will price will probably generate some pressure on russia to try to generate some reform measure of some structural reforms of course i think part of the question here is the scale of the adjustment in the oil prices if it's too radical. probably it's not something that is desirable and constructive in terms of how policy will evolve but if we're talking about ninety to ninety five dollars per barrel which is where increasingly the market seems to be looking for the oil price for next year i think this is probably the right balance between kind of keeping the macro relatively stable but also exerting somewhat greater pressure on russia to improve its policy . both ways obviously yeah i mean i think the funny thing is that the price of oil

actually rose it fell very briefly after the announcement rose which is you know lots of factors affect it but it does look around looking around the world a moment like that they're all markets reasonably tight and we have saudi producing at record highs and committed to one hundred dollars a barrel price and the same is true of u.a.e. and kuwait that they are producing at record highs and those are the three who are members of the opec cartel who can adjust their production in defense of a price target so i think that's the bar for out there that's going to hold up the price of oil and prevent one of the more radical scenarios of all price falling and us guess the other thing to say is that it's still some way before we actually get additional rein in oil coming back onto the market that's the interesting thing to me here in this is this is part of the geopolitical dynamic here i mean if beyond

this interim agreement. really in oil comes back on the market here again the ricochet effect here comes here because you know the saudis are now could be equally like it for many other reasons is because not just oil but russia will have to deal with that too because it will be lower pressure on iranian oil coming to the market well i kind of agree with jake up i also tried to keep track of the prices and my impression is that all prices are driven up not just by absence of the product on the market but sometimes they're driven out by instability and the truth is iran is not the source of instability despite all the bad sides of this regime believe cities iran has not attacked anyone since one thousand nine hundred ninety nine everyone was afraid that iran would attack someone in the meantime the united states attacked and number of countries israel attacked the number of countries but. iran never technique when it was a victim of aggression. and by saddam hussein so i think the prices will not go

down dramatically because the real source of instability are still there we still have the conflict in syria we still have instability or with the media east and i think these factors may drive the prices are up much better than about out of the result of some of your own logic of it's going to fracking in the united states the united states being self-sufficient in energy relatively soon a lot of punditry go out there so this is a very bad news for russia here honey how does america's growing. energy wealth impact other markets in particular russians do you know that it's interesting because we've got a spread in the financial markets between w.t.r. which the domestic u.s. oil price and the global or price brant and i think that's a sign that you continue to have this very strong production in the middle of the american continent which can't make it out to global markets and and really what

happens is when the infrastructure gets built the american price comes up to the global level rather than the global price coming down to the american life or so i would say that it's very exciting what's happening in the states the shale oil production in the classical low boredom is what is it's a global has not yet happened in another country that mix of factors that you have in the states hasn't been replicated elsewhere in fact in russia with a passion of sweet underlying west siberia you probably have one of the places where it's most likely to get replicated but i think until it's replicated outside america you're not going to see it became packed on the global price the other thing is the decline rates and these formations are quite high and so the cost of the oil is quite high and so there's a fall in the price that there will then you might lose that production quite quickly so it's not clear that it's going to drive down pleasant of course we're going to slow panacea i mean as so many american politicians would like to is there . exactly there are

a lot of difficulties with how this is going to be implemented this is probably in terms of the global implications certainly not a short term proposition but more of a longer term development with a lot of question marks there and i think ultimately again i tend to look at this is a challenge in response if there is a challenge that is building for russia globally the response has to be a greater efficiency and where the development of its fuel sector diversification geographically. more oil to china and and also greater diversification and more broadly away from oil and gas towards other sectors of the economy and this is really the fundamental issue for us in the longer term are gentlemen i have to jump in here we have good with your break and after that short break we'll continue our discussion stay.

you know there's one thing that i still can't understand i said but i don't want to ruin your good mood but i have this one question when doing this all for you that you had everything they respect and so that you give them all up in the senate to go your way but what for. it was a way to inform he tried to restrain himself but look at all the first out anyway. if it really puts me off that i have such

a father. it was one small but very great secret that i have to live with your favorite. book picked right on the scene. in the first street. and i think picture. on a reporter's twitter. on instagram. to be in the know. on. the olympic torch is on its epic journey to such. one hundred and twenty three days. through two thousand my number top two cities of russia. relayed by

fourteen thousand people or sixty five thousand kilometers in a record setting for. find land air see your numbers mate. olympic torch relay. on r t r c dot com. there's a media lead us so we leave that maybe. by the same person secure. your party there's a goal. for shoes that no one is asking with the gas that you deserve answers from it's all on politics only on our team.

welcome back to on the money where the business of russia is business on peter lavelle reminder we're talking about russia's economy but before that let's have a look at the following report. russia's growth prediction for a twenty thirteen is coming in lower than expected according to the russian ministry of the konami developments the forecasted real g.d.p. growth for twenty thirteen is down to one point eight percent. as for the upcoming year official growth predictions are that the economy will expand to range from two point eight to three point two percent next year's budget deficit will amount to zero point five percent of g.d.p. based on the oil price assumption and budget spending plans the official prediction is that at an average of ninety three dollars per barrel the budget will run

a deficit of three hundred and ninety billion rubles the revised forecast has lower expectations also in government and foreign investments and it predicts lower retail trade growth lower growth in real incomes and slower industrial production. as for long term investments low inflation will play an important part in the current forecast lowers the expected accumulated change in the level of consumer prices in twenty thirteen to twenty thirty my more than twenty five percent this means investors are expected to revise their predictions experts say indeed the forecast net capital inflow figure has been lowered varian significantly. at the same time russia has risin eight positions to rank fifty six best country in the latest survey of taxation environment it is part of the world bank's doing business effort the improvement was due to reduction of administrative red tape but as the

russian newspaper veta mr writes the survey of one hundred eighty nine countries found that russian companies continue to have a high tax burden. the ministry of the canonical development has managed to improve russia's standing on the world bank's ease of doing business ranking which the ministry uses is a key performance indicator russia jumped twenty places in the world bank's ease of doing business survey it is now number ninety two out of one hundred eighty five countries this is happened at a time of concerted reform effort and widespread improvements in access to electricity according to a new report from the international body. and the money r.t. . gentlemen let's start out with the biggest news of the month and that is ukraine jacob how do you read this i mean where does ukraine stand right now because it didn't sign the association agreement with the european union is

pivoting the talk about the customs union with russia but there's no real movement there it's about talks to have talks where does ukraine stand it's in a precarious situation they've got a big current account deficit they've got big external debt repayments they've got falling reserves they got to exchange rate peg it's a precarious situation they need to find external financing. and they've got a presidential election coming up which means i think it's going to be difficult for them to do the tough measures the i.m.f. would tomorrow and raising domestic gas prices and reducing budget expenditures so we think that they'll be some form of deal with russia but it's very unclear on the timing of the details of that deal or how do you come out on this because it's it's neither here nor there right now exactly with a lot of noise in between i'd like to point out it almost seems like ukraine is trying to have the benefit of an alliance with the europe and to get the financing from there but also to get some support from russia and. it seems like there

could be a case where by none of these benefits me come ukraine's way and the of course that all the. and on how they play their cards in the near term but my sense is that indeed one of the most likely scenarios is that russia well it has already allocated some support to ukraine there are indications that there may be further support in the form of more favorable terms on gas supplies etc so there is scope for russia to in the near term to to provide the support but of course in the end of the day i think a lot of the people realize that the ultimate choice by ukraine is a very difficult proposition because it's a country that part of it is in the west part of it is in the east and to make a choice in one direction is something that creates significant turmoil within the

country as we can see all three of you is a compromise out there because it seems so polemical if you look at some of the leadership i mean brussels took it as a snub they were in salted because so much work had been done on this agreement and then you know which are and away from really to me is that is there a compromise here of zoe to always saying is that you ukraine is in the east it is in west it's staying exactly where it is ok it's a geo political problem but people live there and they have leadership there and you have an economy can you find a compromise to fit both tried to be short on that i think it's possible to find some kind of a solution if the three parties the e.u. ukraine and russia sit together and find what they can find out what they can do what are don't think that it's going to happen the main problem is with the e.u. will because the insists it's between us and ukraine russia has nothing to do with that and the reaction of the e.u.

to the recent events was just so inadequate that i don't expect them to correct their position instead of looking for their own mistakes and allies in their own shortcomings they just put all the blame. only on forty and you know coach it's not us it's them you can compromise i think but personally i think that we'll probably have to wait until after the presidential elections now before there's a clear political choice in ukraine and so i think we're in a holding pattern until the end and if you think that in the in the meantime i mean i think you realize is that you are good advice for you when they afford it to me but i mean look what we do our very grain is to use that time until the presidential elections to decide on key issues right but my sense is that indeed it's probably the best scenario for ukraine would be to have all of the main players at the negotiating table coordinating the process of integration with the e.u. with russia and then potentially you can get spillover positive effect of say russia

and the e.u. progressing towards a real substantial economic integration agenda five to six years ago the issue of free trade zone between russia and the e.u. was seriously discussed in russia in new europe right now it's completely out of the agenda why is that the case perhaps the positive scenario would be that why ukraine via all of these discussions you can have that kind of a positive effect these of you russian e.u. relations with jacob it doesn't work that way i mean you work in the world of finance you work in the world of finance the human eye working in the world of media and we know how people in media spin this i mean it has to be black and white it has to be binary this is driven from the western perspective by politics well i would say that certainly the global media plays a very negative role in your crean i mean they're the consequences of their so-called orange revolution the consequence was that ukraine still has and want

full democracy but relations between russia and the west more so are for nothing and now because of all these spin about very young age and but putin it will be even more difficult now. before the viewing assignment for the three pockets for the u. ukraine and russia to sit together and find the solution i would remind you that just one hundred years ago before the first cold war there were very difficult problems but there was the portage problem the ukrainian problem the problem but as it turned out it's possible to seek to solve these problems if all the park it sit together and discuss on the positive note that there are many thanks to our guests and thanks to our viewers for watching us here on the money see you next time stay .

with economic down in the final. days. and the rest. will be a prickly. live

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a little victoria treeless. on r t r two dot com. when the crisis leaves us traces everywhere an. empty closed rooms become the norm . children pay for the mistakes of adults. by working in a tobacco field or in a cafe if. they are the ones who come back call him last. so his games are just in their memories. weeks between thanksgiving and christmas in the united states a conforti roughly twenty percent of annual mall traffic during that period of time people are much less rational one day when they self yes certainly in our modern

era people are often spending money that they don't have and spending it on things they don't need to accomplish what they have bought. or is probably the most complex and difficult to. all of us are still locked up in the phenomenon of friendly fire probably extends back to the invention of gunpowder. just killed a bunch of people you know don't know what they're up their families there are of us people. right now reading. this some of them

shoots my brother in the leg not intentional because of it because it was night times four in the morning even the best even the mesh shoulders. are going to make mistakes does this whole idea of brotherhood an author. and camaraderie in the sense that was it in this context it has absolutely no place. i was thinking somehow i had to come back because mom was waiting for me. i just knew that everything would be fine for some reason they were so confident because we were going to get married officially after he came back how could he not come back because the mere thought of it never crossed her mind. when the militants decided to try and break through to her new guinea above

screaming grenade. go forward base blow them blow them all run is back your war. a little and it was all over all. we know that our call rats on our commander won't leave us no matter how tough it gets we're team. there who are getting was a senior in his military trio. he knew that if he didn't smother that grenade with his body more if comrades would die he gave his own life to save us friends. good luck for a jury. to believe the needs most sophisticated. fortunately doesn't sound anything. to teach music creation and why it should care about humans and.

this is why you should care only. dozens wounded on the rest of the ukrainian police wanted on protesters in kiev as turns of thousands. for the country's leadership to resign after rejecting. deal. from guantanamo bay prison has reportedly agreed to spying for us in exchange for. more guilty you or i may have been better for you critics condemned the cia toxics saying dangerous elements a might have gone out while innocent months stay locked up indefinitely. the bahraini authorities and the main opposition going to jail despite him being eligible for release on the same. day at the moment he isn't interested in.