Great Recession in Russia
[4] In contrast to this earlier speculation, in September 2009 the Russian government announced plans to sell state energy and transport holdings in order to help plug the budget deficit and to help improve the nation's aging infrastructure.
The state earmarked about 5,500 enterprises for divestment and planned to sell shares in companies that were already publicly traded, including Rosneft, the country's biggest oil producer.
The Russian Central Bank owned US$100 Billion of mortgage-backed securities of the two American mortgage giants Fannie Mae and Freddie Mac that were taken over by the US government.
[22] Many analysts, including Andrei Illarionov, former economic policy adviser to then-President Vladimir Putin, claim that in Russia the crisis in the stock market was deepened dramatically by internal factors, including concerns over state interference in the economy fueled in June by Putin's criticism of Mechel and the conflict over TNK-BP, lack of transparency in banking and political risks associated with escalating geopolitical tensions following the 2008 South Ossetia war in August.
The comments, which raised fears of another attack similar to that made on Yukos in 2004, contrasted sharply with previous efforts by President Dmitry Medvedev to improve Russia's reputation as an investor-friendly country.
[27] On the following day, Mechel issued a contrite statement promising full cooperation with federal authorities,[27] while share values rebounded by nearly 15 percent.
28 July presidential aide Arkady Dvorkovich then sought to restore calm, declaring that all parties would "act in a civilized way", and confirming that Mechel was cooperating with antitrust authorities.
[29] On 16 September Russia's most liquid stock exchange MICEX and the dollar-denominated RTS were suspended trade for one hour after the worst one-day fall in 10 years as Finance Minister Alexei Kudrin reassured markets there was no "systemic" crisis.
[31][32] The simultaneous collapse of money markets prompted reaction from the government and the Central Bank, while Finance Minister Alexey Kudrin sought assurances from U.S. Treasury Secretary Henry Paulson that the U.S. did not play politics with Russia in the crisis.
[25] The crisis continued on 18 September, as trading was suspended for the third day in succession on Russia's two main stock exchanges amidst fear of financial collapse.
[41] A subsequent drop in rouble-to-dollar exchange rate and dollar-denominated prices of Russian corporate securities forced investors to crowd out, worsening the positive feedback loop.
[50] On 18 September, Russian President Dmitry Medvedev ordered ministers to inject 500 billion roubles of funds from the state budget into the markets and pledged that the financial system would receive "all necessary support".
[51] On 29 September, Vladimir Putin announced a government policy aimed at refinancing Russian corporations that previously relied on foreign loans.
Government authorized Vnesheconombank as its principal agent in distributing state loans to these corporations, amounting initially up to 50 billion US dollars, or 8% of Russia's foreign currency assets.
[52] On 23 October, Standard & Poor's changed the long-term outlook on the sovereign credit ratings of Russia from stable to negative, warning of the costs of bailing out troubled banks and a rising risk of a budget deficit in 2009.
Minister of finance Alexey Kudrin, who resisted tax breaks until September,[60] concurred with Putin's proposal, estimating that they will save the businesses around 500 billion roubles annually.
Magnitogorsk Iron and Steel Works laid off 3,000 workers (10% of its Urals staff) and reduced output by 15% on 7 October,[72][73] another layoff of 1,300 was announced in early November.
[73] Evraz Group, employer of 40 thousands workers in Kemerovo Oblast, was reported negotiating layoffs with the unions and regional government since 30 October.
[79] The industry continued to implode, and on 14 and 18 November Novolipetsk Steel shut down two of its five[80] blast furnaces, reducing its pig iron capacity by 2.5 million metric tons, or 27%.
[91] AvtoFramos, Moscow-based manufacturer of Renault Logan, has confirmed that instead of a planned weekly New Year holiday, the plant will stop for a month, 12 December 2008 to 12 January 2009.
[105] In June 2010, President Dmitry Medvedev visited Silicon Valley in San Jose, California in order to cultivate ideas of how to develop Russia as a major research center.
In June–August 2008 the fleet of KrasAir, a Krasnoyarsk-based airline with a controlling state interest, was grounded by the fuel suppliers' refusal to extend credit to the company that defaulted on payments.
[106] Government action focused on setting the cap on jet fuel prices and restructuring its assets into a new company managed by Rostechnologii, a newly formed state conglomerate.
KrasAir also defaulted on payments to its staff, and on 27 October a strike action, coupled with fuel suppliers' denial of service, finally ruined the airline.
Following a 20 percent drop of domestic passenger numbers in Russia per month, the federal government scrapped all plans concerning the new airline on 5 March 2009.
[110] The food industry is, however, locked between high costs of farm produce and tight price and credit terms dictated by retail chains.
Food industry executives anticipate that the chains will eventually lose part of their clients to street markets, as the suppliers are forced to develop this independent sales channel.
[112] A proprietary Ernst & Young survey of 113 clients that leaked into Russian press in November summarized their losses at 8% of managerial and 6% of low-level jobs by end of October.
[74] In telecommunications, Sitronics laid off up to 10% in all business units; in audit services, Deloitte Touche Tohmatsu reduced number of partners in its Russian division by 17 out of 180.
[117] By late November, Kremlin First Deputy Chief of Staff, Vladislav Surkov, was warning that the middle classes should be defended from poverty during the crisis.
