American Tech Giants Extensions of the Neocon Agenda

Over the past 60 years, there is no facet of the US government or society that the Neocon-Neolib machine has not penetrated and that of course includes the biggest agents of technology, the IT giants. Their massive potential for influence have been put to work in the failed dream of  "controlled" chaos.
One must be overseas, in a target nation for this "controlled" chaos to truly appreciate how pervasive these extensions of the State Department are.

Several examples: the Ukrainian nazi pusche of 2013 sponsored by America and the EU that resulted in an attempted genocide of the Russian 45% of the population, a genocide that continues with full American and EU sponsorship to this day. Where the nazis lost on the battlefield, though they continue shelling civilians on a daily basis, they have made up by Hitlerite tactics of forced religious and linguistical conversions and police state terror tactics.

Of course one would never know this, as the Western media only praises its this brown plague and quiets over those uncomfortable issues such as mass arrests by the SBU of bloggers or just average citizens voicing critiques of the government. And since its Russians being murdered the West could not care less.

Those who try to push the truth through on Western platforms are banned or blocked by the army of Ukrainian moderators FaceBook has hired.

Now its Belarus, with the hypocritical West savagely suppressing its own protesting population and waxing in grief about the very light police tactics of Lukashenko. Their latest martyr hero who died in the protests, died when his own bomb blew up prematurely. This dead terrorist brought out no less then every EU ambassador, paying him tribute. This insanity has gone so far that even  Gas Gas Gas Them Macron, who for 2 years has set records in the use of CS gas on one's own populace, utilizing absolute third world tyranny against his own French population (not the illegal immigrant arabs or africans he uses to replace his French population) talks about the people's right to demonstrate in Belarus, you know the bottom of morality pit has been reached.

Youtube, one of those platforms that has decided to become an insidious organ of planned chaos, constantly places videos in support of the demonstrations on every Russian's and Belarus' suggestions list. You can not block them. Many are out and out falsehoods, but that does not bother Youtube that instantly blocks conservative sites and channels.

When demonstrations started in Russia in 2014, Facebook for its part tried to mobilize the public using any pretext to get people into the streets: fight for abortions, fight against abortion, against Putin, for the Church and so on. These commercials were placed in most Russians' news streams. All adverted the same date, time and location in hopes of getting as many people out and creating as much havoc. 

During the last parliamentary Russian elections, in the 24 hours of silence before the elections, when all political ads are banned, Facebook continued to flood the timelines with ads for the most radical members of the opposition.

Facebook, agent provocateur.

The Russian government, along with any other government so affected must fight this direct and illegal threat to their sovereignty by a set of elites unanswerable to anyone, to include the laws of their home country of America.

The way to fight these American neocon-neolib hegemons, of course is not banning them. This, firstly, turns them into victims and  hands them the moral high ground, secondly that approach with today's technology is pointless. They must be fought on their home turfs in the best of American traditions^ sued by the victims of their propaganda in single and class action lawsuits. The affected governments, with their deep pockets can easily hire legions of American lawyers to take these tech giants to court, endless court with the aim not necessarily to win but to punish with loss of capital and stock price until the illegal behaviors become to expensive to continue. There are millions of victims of the extremists that these tech giants support directly. In Ukraine, over 8 million people have suffered alone and throughout the world, those numbers are many times larger. No matter the size of the pockets of any one tech giant, they are no contest for the pockets of any medium sized state.

 The same strategy should be utilized by the various conservative groups in America, who have been harmed greatly by the immoral actions of these elitist organizations.

A Wind of Change

 Much can depend in a nation's life on the personality and beliefs of its leader. Even more, often enough, on those of the men surrounding him. To this, Russia is no exception.

President Putin has always stood by the re-industrialization of the economy and the advancement of the real economy vs the financial economy. However, this always met with limited success and seemed to only make advancements more in a reactionary manner to key anti-Russian world events. Import substitution, raised due to western economic war on Russia, is a prime example of this. While successful, its success has been much more limited then by any account it should have been. It is as if the ship of state was constantly being met with a ponderous head wind, breaking its progress. Agriculture and military have been the exceptions.

Indeed, that head wind was the number two man in Russia. An avowed Atlantist and part of the globalist financial elite, Dmitry Medvedev, as prime minister, was never exactly pro Russian development or mercantilism (there it is that evil word Mercantilism, so hated by the neoliberal free trade crowd). It can be understood of course as 1. Financial economics by its nature is an extraction economy, its quick cash through liquidation of industry and sell off of resources. When backed up by people who see themselves as citizens of the globe or global elites and hold no particular driving and all consuming love for their homeland, their Rodina, this is a formula for disaster.

Since the removal of Medvedev from power and with him the Atlantist neoliberal block and their replacement with Prime Minister Mishustin, the winds of change have arrived.

This was first seen by the Russian advantageous positioning to support the economy during and after the Covid19 lock-downs. I detail these HERE. In tendum, the Russian government gave assistance to the Russian medical supply and biotechnology industry to allow Russia to become an over night medical equipment heavy weight, bringing forth top of the line technologies (detailed HERE) and to be the first to start mass production of the first registered Covid19 vaccine (detailed HERE). Already nations have lined up to purchase and franchise the production of equipment and vaccine. Russia has also shown an ability all over her vast distances to greenfield to completion almost two dozen hi-tech medical hospitals, projects completed in under 100 days each and not temporary trailers like the Chinese "wanders" but permanent building with all the hi-tech equipment (also Russian made) that would be expected from world class facilities.

"The president gave marching orders for the government to work out a package of programs for the growth of the Russian IT industry, to create maximum comfortable conditions for specialists of this industry. Now we are reviewing the changes that will be required in the legal codes to create tax havens for the IT sphere."

Prime Minister Michael Mishustin

One such maneuver is the lowering of pension taxes required from the IT industry from 15% down to 7.6%, almost a 50% cut. Taxes on profits will drop from Russia's already low 20% to 3% for companies who earn 90% of their profits from production and sale of software solutions.

Additionally, manufacturers of electronic equipment and AI systems will also be covered under these new taxes.

No major economy in the world has such beneficial tax codes for the IT industry. Coupled with the fact that Russia produces more engineers than any other nation, an excellent communications infrastructure that is now being upgraded to 5G, its comparatively lower salaries compared to other nations and very cheap utilities and land costs and there is no logical reason not to invest, except for fear bred by ignorance and foreign propaganda. Taking into account the weak position of the ruble vs foreign major currencies, for those selling abroad and ignoring this , it is just down criminal incompetence.

The Russian government has also undertaken a gigantic effort in reviewing, updating and deleting antiquated government standards throughout all industries. This has helped catapult Russia into one of the world leaders of the Ease of Doing Business index in 6 short years. What, the Western MSM forgot to mention that?

Post COVID 19, A World Only For The Rich

As most people with any lick of understanding of how the economic world works, at least in its present incarnation, understands that the rich, the really rich, are little affected by the downs of the economic cycles.

There are several reasons for this, one amongst which is mentality quite separate from the middle and lower classes. Many in the modern lower 95% of any modern society are dominated primarily by two strains of though: a duty to pay off any debts taken upon their shoulders and a live for today and face tomorrow when it comes mentality. Both of these are sure to always lead to disaster in a long enough time scale and even more so in the present post COVID economic collapse.

First, the mentality of the "duty to pay off debts". Believe me, the rich do not share your ignorant mental state, ignorant because it ignores the business construct of any such interest laden debt, that of mutual risk. Sure they foster that mental state on the lower 95% to make sure the poorer classes will spend their last penny in savings to pay off what will more than likely be confiscated anyways. They teach you that default and bankruptcy should be cringed at, as some how below real people of character. However, they themselves have no such qualms, never had and never will. Just look at how many times the president of the United States, Mr. Trump, has filed bankruptcy, as a millionaire and billionaire.

In truth, their approach is the correct one. When one takes out a loan, one is entering into a mutual risk agreement with the creditor.  The creditor knows there is a risk that the creditie will not pay off the loan and the creditor sets the loan rates accordingly. The creditie knows that there is a chance that he will not be able to pay off the credit and will loose the object of that credit and should, though most absolutely do not, set his priorities on payments (and thus the overall value of the credit) accordingly. At all times a cost vs benefit analysis should be done by the creditie, at all times during the credit pay off period. If it becomes a bad investment, and a house or car is just that, an investment, not your property or your "home" but a cold blooded investment up until the point it is 100% paid off, the creditie should be ready to cut his losses and return the keys to the creditor. This is especially true when the creditie looses their soul source of income.

Bankruptcy and default not a slur words and the rich have never had a second thought of utilizing the tools set before them to reinvent themselves and safe guard their wealth. 

Secondly, is the mentality of living for today. Most of the rich have plans and plans within plans. Those that work take on contracts with contingency plans, the golden parachutes of modern speak. They are always looking for better opportunities and will jump ship as needed. They do not hold loyalty to their companies as those companies do not hold loyalty back to them. This is especially true the lower one goes on the employee grade. Modern corporations will not think twice about down sizing or reducing paid staff as needed to dictated by economic prudence. The bigger the corporation the more this is the truth, with a few exceptions, primarily in smaller, talent dependent companies, such as consultancies, who are only as good as their talent and must be ready to plus up on a very short notice.

Of course, this was not always so. Under the more socialist models, it was disallowed and in some countries such as France, it is still very difficult, but in any Neo-liberal economic model, labour is a resource, as my MBA B-School professors taught us, a view I never agreed with, but that is irrelevant as 99% did.

The Rich are always on the look out, following trends, switching and reinventing themselves, their industries and their locations as need be.

However, as is the problem with all Neo-liberal economies, the super accumulation of wealth, whether its flaunted or kept behind tall walls, in the hands of a very small subset of society, has been on a relentless drive. In most Neo-liberal societies wealth and property ownership by the top 5% is often between 60-80% of that nation's total wealth. With that comes a power over politics unmatched in by any other segment and perpetuates the wealth accumulation.. As a matter of fact, if one takes away the description of the supposed form of government and compares wealth distribution in the Neo-liberal "democracies" with that of most Middle Eastern dictatorships, such as the Saudis or Kuwaitis, one will find more commonalities then discrepancies. With wealth comes real power.

Now we reach the post Covid reality, which is very quickly coming upon the majority of the world. Prior to now, in the global lock down, much was written about this and even more ignored. The majority of the lower 95% preferred to believe in the myths of the V shaped rebound: "just you wait, as soon as the doors open, it will be back to work and just like before". Like before was already broken and slowly sinking, now the corks are out of the barrels and water has poured in.

The reality is that many businesses aimed at the middle class and poor are gone. The cost of credit to open new ones and for the lower 95's purchasing are skyrocketing.  Social distancing laws are a force multiplier on price. Additionally, with mass unemployment will come a massive downward push on most salaries, even as meager savings are destroyed on survival.

Lets take commercial flying for example. With airliners required to seat passengers in every other seat, this will lower occupancy in large planes by 30% and in small commuter planes by up to 60%. Associations of commercial airliners and experts have already predicted an average cost of increase in tickets of 40%. This will put commercial flying out of the reach of the majority of Neo-liberal societies suffering from downward pressures on wages and lack of credit to fuel spending. Equally so for small and many medium sized businesses.

The average office manager will think twice before sending an employee to a conference or training. Sure, online trainings will take up some of the slack, but they are rarely of the same caliber or bring in the same revenue for the hosting company. Again, downward spiral of a negative feed back loop.

As fewer and fewer economy classes passengers will be available, ticket prices will inadvertently rise, making them yet more inaccessible, until the primary target will be the cost immune rich. I have flown on business class only flights, those do exist and they will start to expand, pushing out the unaffordable economy class flights. More and more, we will return to an era where only the rich flew and had that mobility.

A similar process will start to take place in many other industries: restaurants, live entertainment, vacationing, housing, upper education, insurance and medicine and so forth.

Additionally, as all of this is happening, already often bankrupt local governments are finding tax income streams collapsing while outlays are exploding. Like it or not, they will have to raise taxes, further destroying their economies, or force austerity, further destroying their economies or like several American cities have already done: file bankruptcy and quit the game.

The present landscape and its socioeconomic trends are moving much of the Neo-liberal world into a full tilt dystopia, something more akin to Latin American realities: a tiny upper crust that owns 80% of everything, a service/managerial educated 20% who owns the remaining 20% and 79% in total grinding poverty, debt slaved to the top 1%. A bright happy future this is not.

Russia: Where to Head in the Post COVID Economic Crash

Let us face it, the Western world's and its satellite's system of Debt-Finance driven paper growth was broken long before COVID showed up and gave it the coup de grace in the back of the head. The system was showing severe strains and creaking under its engorged weight in H2 2019 and Recession was in the air. It was the big white elephant in the room, about which only a few dared to talk to loudly.

COVID's arrival did two things: on the one hand, it turned what was apt to be a medium strength recession into a depression that may make the Great Depression look relatively mild and on the other hand it gave the politicians an excuse for all their 30 years of folly and self enrichment and thus a way out without changing anything. Additionally, it has presented the western central banks the opportunity to play out their latest insane theory: the Modern Monetary Theory...that is, print print print and its all good to print some more. Perpetual Quantitative Easing. A crack binge of epic proportions with a naive belief that nothing bad will arise from it. Ask the Romans how well that worked out for them, or the last Mongol dynasty of China. Two thousand years of history proves otherwise, but then again, History has ended, correct?

I wrote months before COVID lock-downs why anyone working remotely should already be living in Russia, it only makes economic sense. Now for the rest.

The West was already facing steep youth unemployment, with the US suffering in the 25-30% margin, many of the starter jobs having been taken either by illegal aliens, for the low skilled, or by H1Bs and automation for the higher skilled labor pool. Europe, even worse, with some EU members hitting the 50% mark. With COVID this will only get worse.

Russia is in a unique position. For one, it has a giant reserve of half a trillion dollars that is actually growing, due to the increase of the cost of gold, even as the government pulls funds to support the economy. The government has done a lot to make sure that Russia is well positioned to come out of this in one piece. The crisis has given feeder stock to many Russian industries, some created in answer to COVID that will feed industrial production in the years to come.

Additionally, with debt to revenue of 16% of GDP, as opposed to most Western nations of 80-150% and growing rapidly, and because of the endless anti-Russian sanctions, Russia is mostly immune from the crashing banking and tsunami of debt storms rolling down on these economies. The final plus is that the Russia lock-down looks set to serious lifting in mid to late May and in all will last only about 1.5 months, as opposed to the 2-3 month lock downs or longer in the West.

This of course means there will be greater opportunities in the Russian market for all those western unemployed engineers and scientists, well greater than sitting around on a bankrupt government dole.
Metallurgists, industrial engineers, mechanical engineers, electrical engineers are in extremely short supply and that considering that Russia graduates more engineers than any other nation, almost twice as many as second place America.  It is also huge and experts are needed.

With all of this, where do you think that venture capital is going to go? To bankrupt struggling western economies or to where it can still earn some semblance of a profit?

Finally, for those who fancy themselves social conservatives, Russia is definitely a go to place. Society is naturally conservative and old fashioned. More akin to the majority in the West in the 60s, 70s and 80s rather than the present. In other words, the good old days the present leading generations remember from their childhoods. Christianity is not frowned upon, it is celebrated. Getting on a plane or a public bus, one is apt to see icons of Christ or the saints on the dashboard of the driver or in the corner of the niche for the stewardesses. Like wise moderate Islam, Judaism, Buddhism, Shamanism, Catholicism can be found practicing in peace and without interference. Even in this COVID madness, the churches were never closed, because under the Russian constitution, the government has no right to interfere in religious matters.

In a roll of good news, the Russian government has continued to liberalize immigration policies. In a follow on article, I will outline just how easy it is for Americans to move to Russia and get citizenship.

Amongst other things, the requirement to give up the previous citizenship has been removed, effectively allowing duel citizenship for anyone who is not directly working for the government, in politics or working on secret projects. Additionally, anyone who has a spouse or child who is a Russian citizen no longer has to pass the Russian language test (though you will be hard pressed with work if you do not learn Russian) and the 3 year living in Russia requirement to put in for citizenship.

Next on the list is the reform of the Temporary and Permanent Residency programs. The order is to first get the Temp, which lasts 3 years and then put in for the Perm program. The Permanent Residency used to require reissue every 5 years but is now life long, as long as at least 183 days a year are spent in Russia. The cross hairs are now on the Temporary Residency which will be removed totally with everyone going directly to Permanent Residency.

Russian Highly Qualified Specialist work visas are also relatively easy to get, as long as you have a sponsor. In all, it takes less than a month to get the visa processed.

So if you have not wondered, you should be. If you have not planned, you should be. There is still a light in the middle of this bleak spring of despair.

Every Catastrophe Offers Opportunity

In true form, when ever one door closes another door opens.

With Covid-19 ravaging supply chains all over the world, medical supply chains have found themselves no exception. From the early days of the pandemic in China to the now global crisis, it quickly became evident that outsourcing the majority of your medical materials and equipment manufacturing, including ingredients for medication, to one country, is hardly a good idea.

Long before Covid-19 became a household name or was even thought up, various voices in Russia were urging the government to more fully invest in local manufacturing of at least medicines if not the equipment for hospitals. The government was slow to act, however the financial and economic war that the West declared on Russia in 2014 brought more attention and political will to this issue.

As President Putin made it his aim for the drastic improvement of the Russian medical system, especially outside of the top 5 major cities, it quickly became obvious that importing all the needed medical equipment would prove to be a very expensive endevour and one that was wrought with tensions as the US Congress played its favorite game of Tariff Russia. Thus, investments were already being realized in the medical fields for manufacturing of state of the art medical equipment for various purposes in Russia: from x-ray to artificial/assisted breathing machines.

Along comes Covid-19 and world wide everything unravels. Luckily for Russia, or a God send, you decide, the plague hit Russia almost last and has only in the past 2 weeks started to rev up. This gave Russia an additional two months to ramp up manufacturing in many sectors and to start to move fringe developments and technologies into full on exploitation. There is nothing like a war time footing to move technology along at rates otherwise not imagined. Survival is the real mother of innovation.

And so, Russia now stands on the precipice of coming out of this as a power of modern medical manufacturing. Below we will go over only a few of the new or expanding productions. As more information appears I will of course update this post.

This can be equally seen in the 16 new infectious disease hospitals being built across the country. These, unlike the Chinese container temporary Wuhan facility, are permanent state of the art facilities with 41 days start to turn key completion build cycles. Each of the hospitals are set up for 500-1000 beds and all the equipment has been procured from Russian companies. From top of the line adjustable beds, to surgical equipment, monitoring systems and stations, ambulances and assisted breathing machines. All are being delivered now and this is only possible because they are localized production, not imports from China or Europe.

So, we will start with the big heavy weight of the Covid-19 season: artificial/assisted breathing machines.

At present, Russia has some 44.000 units of various age and capacity in service, Japan 23.000. As a further comparison, Krasondar, the main southern commercial center with a population of about one million people has 950 such units in service. Milano, the main Italian industrial center with a population of 1.3 million coupled with horrid air quality, had 48 units.

As of March, Russia was producing some 300 state of the art units per month. With massive government support, the production is being increased to 500 units this merry month of April, with the aim of 2500 units monthly by the close of May and peaking at 3.000 units. Of course this level of sustained production is well past the capacity needs for Russia itself, but it will go to fill export orders. As of now, 30 nations have either placed or in the process of placing orders for machines.

The units are being produced by Shabe Holdings, a division of Rostec, in their Uralskii Optical-Mechanical manufacturing plant.

Other key productions of masks and garments are also taking off. Small and medium sized businesses are retooling. Production of the high grade masks has reached 2.1 million units per week with another 300.000 coming online this week. Of course this does not fill the demand but considering previously Russia was importing all of this volume, this has gone a long way in manufacturing from basically nothing.

Two technopark universities in Ekaterinburg and Tymin have also begun printing plastic masks (they still require cloth for the breathing filters) on 3D printers, in serial production. While still at small batches of 500 units per 2 days of printing, the proof of concept in a production environment has been provided, opening the doors to mass production that does not require outsourcing and international logistics or major manufacturing facilities. Equally they are printing replaceable parts to assisted breathing equipment, such as plastic valves that must be changed once every 24 hours.

Medical garment manufacturing, robes for doctors, at 6.000 units daily. At present this is well below daily consumption and stocks are filling the gap. However, manufacturing is being ramped up to 25.000 units per day, as even heavy industry giants like Komaz and Tatneft are retooling for a new manufacturing branch job.

The big bottle neck is cloth for the medical gowns which is still mostly imported from China. In steps Chaikovskii Textile which has come up with a new medical material Panatseya PP180 which is a light weight, flexible material that is inhospitable to bacterial, fungal and viral microorganisms. The textile also is not absorbent, so liquids do not penetrate and cause stains. Full sustained production is in its early stages set to ramp up.

March goggle manufacturing was at 12.000 units per day with the aim of reaching 22.000 units per day by end of April.

Additionally, by end of March, respirators production had reached 20.000 units per day.

Of the seventeen key medications used in treatment of Covid-19, fourteen are manufactured in Russia, the remaining 3 are having to be imported. Unfortunately, this is a much slower ramp up issue, but one that has once again been high lightened as a weak link.

Russian pharma companies are also working on 7 separate vaccines, with live human trials on 60 volunteers (these people are already chosen and half are the scientists themselves) set to start by end of May/early June. Due to the long incubation periods of this virus, testing will take at least 1 month. Generiym, one of those companies, has patented and pushed into full scale production an express test for Covid-19 that delivers results in 30 minutes with a 94% accuracy rate. Yes, I know, the western media has not squeaked a word about this, which should not be in the least surprising.

Other high tech equipment is being manufactured by such companies as Litharinskii Optical Glass Plant, working with Germanium lenses to manufacture top of the line thermal imaging equipment that allows a doctor to scan a crowd up to 30m out and identify individuals in the crowd whose body temperatures are out of norms set.

Evromedservise is now manufacturing a full line of medical furniture with built in ultraviolet radiation lamps for quick and full sterilization of medical equipment and supplies.

Rosatom Helskia has produced large scale radiation sterilization equipment that will sterilize up to 58 million masks per month. Their work contract goes into effect this month.

To keep this engine of production and innovation chugging, the Russian central bank has relaxed all lending requirements to any company starting or currently manufacturing medicines, medical supplies and medical equipment.

Now we will see in what position Russia will be on the medical equipment markets once all of this settles out. Next time you are at your doctor's, the equipment might just read "Made in Russia".

Russia Is Well Positioned UPDATE 4 (1 June 2020)

Despite the "best wishes" of the Western mass media that everything in Russia is failing, the reality of the situation is that Russia is uniquely positioned to rebound economically faster and stronger then the over leveraged West.

Even the NYT came to this conclusion "Thanks to Sanctions, Russia Is Cushioned From Virus’s Economic Shocks", true, you can taste the bile in the first half of the article, but then they get to the various points.

Russia has been cut off from the Western financial markets, Russia has been busy regrowing its industry for the past 7 years and Russia has a huge reserve of over $600 billion set aside for occurrences just like this with a government debt of less than 10% to GDP. But this is not enough, what Russia has, unlike the West, is a leadership that is ahead of the curve.

The Russian leadership has foreseen what is coming down the road and has taken key steps to block that road as best as possible. Russia instantly closed the borders with China, while infected people from China were still traveling everywhere. Russia closed commercial flights with the rest of the world more slowly and that did allow for the infection to leak in. Either way, for what ever reasons: Grace of God, cold weather, partial immunity from TB vaccines, the virus has been slow to spread and the rate of full recovery is 5 times to that of deaths, while globally right now its about 2 to 1, of the officially recognized infections.

The Russian government has stock piled medical equipment and has retooled very quickly to manufacture additional equipment and materials, enough so as to send aid to 14 other nations, including the US, as well as 15 plane loads of trucks and personnel to aid Italy, bringing lacking equipment, such as disinfectant machines, spreaders, and liquid as well as over 200 doctors and military biochem experts. Russia has disinfected over a twenty hospitals and homes for the old, as well as building field hospitals, throughout hard hit northern Italy.

Russia has over 44000 artificial/assisted breathing machines and two large manufacturers are working 24/7 manufacturing more. As a comparison, Japan with the world's oldest population, a population of 120 million, has only 24000 and 10000 are already occupied by the sick from other infections. Milan, Italy had 48.

But more so then the medical preparedness, is the economic steps that Russia has taken to make sure that a post infection economic crash does not come at the end of the month long quarantine.

Europe and the US panicked, sending everyone into lock down without a single thought about how the already financially overstretched and struggling populations will feed themselves and survive a month plus without money to buy food and in some cases without food, not to mention pay rents, credit debts and utilities. All plans came only as an after thought, not much for proper full spectrum planning. Over 10 million have filed for unemployment in the US alone, in just two weeks. Unheard of numbers.

The Russian government, spearheaded by President Putin has avoided this and has put in key points for both the workers and the small and medium businesses. They are as follows:

For people:

1. 50% increase to unemployment benefits by the Federal government, so that unemployment will not be less than the minimum allowed salary. Sure a person will not be eating steaks on this but he will not be starving either. Unemployment is available to anyone who has worked for at least 4 months previously. As a comparison, in the US unemployment is available only to those who work full time, on contract pay (not hourly workers) and has worked at least 12 months previously.

2. Provinces will add to the unemployment payout as much as their budgets allow. Moscow for one will double the unemployment payouts of the Federal government.

3. Sick leave pay has also been increased by 50%.

4. People facing unemployment or inability to pay credit due to pay cuts are now able to take a 6 month credit holiday from payments. Banks, by law, have 3 days to process the paperwork and freeze credits.

5. Pensions will be indexed +6%.

6. Filing for Bankruptcy is now free.

For business:

1. For small and medium businesses percent free loans to pay salaries up to 20 million rubles ($270.000 at current exchange rates) without a need to pay back for 8 months after the emergency is lifted.

2. Rents owed on Federally owned lands and infrastructure waived for 8 months.

3. All taxes on rent givers are waved in exchange for them lowering the rent payments demanded from their renters.

4. All business taxes, with the exception of VAT, are waved for 6 months.

5. Large funds for investment in support of whole business sectors.

6. Bankruptcy for businesses can be stalled for 8 months.

Other ideas are still being worked out.

As you can see, the Russian government is dead set on making sure Russian bounces back fast, hard and ahead of its Western competition. But to make sure Russia does not become a temporary slush fund for Western credit, two additional laws were passed:

1. a 13% tax on all percents, dividends and other earnings on deposits or investments over 1 million rubles. This is only on the money earned, as money making money will now be equated to income, unlike in many countries, so the rich will pay their fair share along with all workers.

2. a 15% tax on all monies being transferred out of Russia. So it will no longer be a quick slush fund and get the cash out later, doing damage to the economy built on those monies. At least a portion will remain in the country to be put back into the economy.

Now we will wait and see what other new projects or laws will come in and only time will tell who in 2 months will be standing, who will be on their knees and who will be on the floor bleeding out with a white chalk outline.

God Bless.

Update 6 April 2020

The situation on the ground has continued to evolve, with several governmental and non-governmental actions starting to continue easing life for Russians and Russian business.

1. Sberbank has created a payment holiday for its clients, for up to 6 months. This, unfortunately, does not mean that percents are not accuring, but payments can be put off, as follows:
   -- Mortgages up to 1.5 million rubles
   -- personal loans up to 250.000 rubles
   -- automobile loans up to 600.000 rubles
   -- credit cards up to 100.000 rubles
   -- small business short term loans up to 300.000 rubles
While the sums are small, it is a start.

2. Government has cut pension contributions from businesses for their employees by 50%. This is the biggest chunk of the payroll taxes that a business has to pay.

3. Internet- all major internet providers have agreed that they will not cut service for those who are unable to pay, during the crisis period, however long it lasts.

Update 8 April 2020

The Russian government has allocated 10 billion rubles ($133 million) to double the salaries of medical personnel fighting the Coronavirus out break.

Emergency salary loans to small and medium businesses are now full operative and are being turned around in under a day. Bank staff are working from 0800 to 2400 daily.

Update 17 April 2020

In order to recharge the economy once the locks downs are over, the Russian government is now offering guaranteed 6.5% mortgages, with the government picking up the tab for any percentage above the 6.5% level. The mortgage level limit is 5 million rubles for Moscow and St. Petersburg and 3 million for the rest of the country.

Update 1 June 2020

The Russian government has now started to pay a one time sum of 10,000 rubles per child between the ages of 5 and 16. The first deposits have started and parents have up to the end of September to file.

Government loans to small and medium businesses for the purpose of paying salaries have now been modified so that if 90% of the work force is kept on, the government will wave the debt totally. If 80% of the work force is kept, 50% will be waved.

When Dealing With Russian Suppliers: Hold Areas

Western companies, especially European companies, when developing drawings for large engineering projects, have a tendency to complete an 80-90% drawing, with various "Hold" areas where technical issues are still open for one reason or another. 

These drawings are then passed on to their Western suppliers who begin the manufacturing process and await updates that cover these "Hold" areas. 

This does not work with Russian suppliers. Russian suppliers want all technical questions answered before they commit to work and will not begin until everything is worked through and signed by both parties. 

Part of this stems from the unwanted risk of loosing money on having to redo work. The majority, however, arises from legal concerns. If a tragic incident occurs from such unorthodox work methods, Russian prosecutors will go after everyone from the CEO to the line engineer of the manufacturer. Thus such risks are considered unacceptable at personal levels. 

Often what happens in such a "relationship" is that the Russian manufacturer will raise the issues verbally, and be told not to worry about it, its for later. They will not start work. Then they will begin to write letters to the client and his engineering department. In the case of an Italian company I worked for, the project manager laughed in their faces that he just threw their stupid letters out and they would get the answers when it damn well suited him. I, as the procurement project manager had to repeatedly explain to him and the Italian engineers that realize it or not, they are not doing any work till they get the answers and our due dates are quickly slipping out. 

Such cultural misunderstandings or especially on the part of western Europeans, absolute refusal to consider cultural and legal differences and frameworks led us to long delays, sour relations and stiff fines.

Food for thought.

How to Motivate Russians

A few years back, I had a senior regional vice-president from Houston give me and others advice that the only way to motivate Russians is with the whip. He thought he was at the peak of wisdom, when in reality he showed everyone, who was Russian anyways, his absolute ignorance. 

This, like many stereotypes comes from yellow propaganda of the Cold War that dipicted Russians as some sort of slave race under either the Tsars (who were hardly what one would call despotic) or Communist leadership. 

True, Stalin did use slave labour, but this was first and foremost against political opponents not as a form of economics.

So what then? Money? To some degree, yes but that wears thin on the Russian soul rather quickly.

Now wait, if I can not whip them or bribe them, then how do you motivate those damn Russians? Or is it all a riddle in a quandary? 

Truth be told, it is all much simpler than that. Russia is a great nation, one that has withstood what would have ground any other people into sand. A quick perusual of Russia's 1400 year history will quickly teach that lesson. 

 So what is the secret? Its in that Greatness itself. Russia and Russians must always have a great cause to strive for. Be it for the Mother Russia of the ancient knyazei (princes) or Holy Third Rome Defender of Orthodox Christianity of the Tsars or the World Proletariat Unite of the early Bolsheviks or Building Enlightened Communism of the later Bolsheviks, Russians have to have an overwhelming goal to strive and sacrifice for, to believe in. 

This is why the 90s were such a disaster. The Communists fell and all the new, corrupt, self absorbed leadership could come up with was: now we will be like all other nations....what? That's it? Then there is nothing to strive for. And that is one of the keys to President Putin's success, to some degree, he has returned those ideas, albait still in a murky form. 

 So there is the example. Your workers are not just building and designing trucks, they are building the best trucks in the world that will be exported all over the world. Your genetisists and their lab assistants are not just making vaccines but are making vaccines which will save the lives of millions of children. 

But do not make these empty words. When the leadership does not believe in what it is saying, the Russian worker will see through the smoke quite quickly and then you are in an even worse state than before. 

To manage in Russia is to lead in Russia and for that you need actual leaders and leaders with vision, vision that goes further than the next quarterly report. Who is up for the task?

GOST: Yes Russia Does Have Standards

Many foreigners, when dealing with Russia in thr 90s and on, and even today are under the very big misimpression that Russia has no government standards that its business operates under and thus the foreign business is free to do as it pleases. 

This, of course, could not be further from the truth. Since 1925, Russia has been operating under GOST (Government Standard)...yes, those latin words do translate that close.  GOST is a set of standards that covers everything from food preparation to building construction to wire manufacturing. At present they are undergoing their biggest review since their inception with several thousand outdated standards being removed or heavily redacted.

This is a very thick series of standards that cover all manufacturing of any and all products or product categories. Companies are allowed to make technical exceptions to GOST but these must be approved by the appropriate GOST committees and can not be weaker than the existing standards. GOST has been translated into English and is available online.

I have heard numerous times that Gazprom, Rusneft or some other entity has agreed to API standarsa whicg is why we are producing in API instead of GOST. But here is the key, they agree to exploit (use) the API standard project NOT accept it for exploitation. Acceptance or completed projects is conducted by Rostecnadzor (Russian Technological Supervision) which is the government agency that must sign off before a project is completed and accepted, and they work exclusively in GOST. 

Now, however, if you are manufacturing for exportation out of Russia and not into another nation adhering to GOST, you can manufacture to whatever standards you wish.

You Work Remotely and Are Not Living in Russia?

Surely than you do not value your money or appreciate your own efforts.

 Now that I have your attention, lets deconstruct the Western myths and lies and discover why for remote workers, Russia is the optimum place to live.

 Lets begin with some life basics. Russia is not a frozen gray hellhole of unsmiling people, perpetual winter and vodka fuelled depression. I will deconstruct these myths in detail in a later piece. And while some villages and some remote provincial towns may look like that, the majority of the country is modern and filled with all the conveniences Westerns are used to. Go to any large grocery store and you will be hit by a selection of dairy, cheeses and meat products twice as large as the average American is likely to see in his life time in an average US supermarket. As for climate, Russia has everything from deep subtropics to frozen arctic, from sandy beaches to deep forests, from steppe to impenetrable mountains, so you get a wide variety of choices in that category too.

 But that aside, let us review things such as the costs of working or doing business. Just for starters, in the Ease of Doing Business Index for 2018, Russia rates in 31st place, up from 35th in 2017 and way up from the low score of 124 just 8 years ago. This puts Russia ahead of such heavy weights as France, 32, Switzerland, 38, Japan, 39, China, 46, US Puerto Rico, 64, India, 77, Brazil, 109.

 Lets go deeper, we will begin with taxes.

 If you are a resident of Russia and a tax resident (you spend at least 183 days in Russia) you pay low local taxes, which for most employees is 13% income and the rest the employer picks up. However, if you are working for yourself or with a very small staff, you can register with the tax authorities as an individualni predprinimatel (individual businessman). The simplified tax is 6% of income, plus gov insurance and pension taxes, which translates into approximately 7% taxes. Big difference from a US base tax starting in the 20% and up.

Now, if you are an American and spend less than 36 days in the US per year, your first $107,000.00 are US income tax free, so you only need pay the Russian 7%. Good deal or what? And filing those taxes is extremely simple, no need to hire expensive accountants or spend days over the tax programs.

Then there is the fact that your every day expenses will be half or less what you are used to paying in the US. For example, a phone plan with 10Gbytes internet, 100 texts and 1000 minutes will run you about $10, while a high speed cable internet connection with unlimited download will set you back on average $20. There are 4 major phone companies and an average of 5-10 ISP providers in any major city or town. Electricity and gas is dirt cheap.  For example, one kw of electricity will run you on average $0.06 and gas for heating is even cheaper.

 Rent, outside of Moscow or the first tier cities, will set you back about $200 for a 1 room apartment, $500 for a three room. Foreigners are also allowed to purchase none agricultural lands, so you could easily purchase an apartment or house. As a matter of fact, doing this is the fast way to help get you to the top of the list for residency.

To prove this point, I will compare below the cost of living in three American cities: NYC, Houston, Oklahoma City with three Russian cities: Moscow, St.Petersburg, Krasnodar. For this, I will use Numbeo.com

 NYC: Moscow
You would need around 2,879.43$ (187,874.03руб) in Moscow to maintain the same standard of life that you can have with 7,900.00$ in New York, NY (assuming you rent in both cities). This calculation uses our Cost of Living Plus Rent Index to compare cost of living. This assumes net earnings (after income tax).
NYC: St.Petersburg
You would need around 2,277.78$ (148,618.09руб) in Saint Petersburg to maintain the same standard of life that you can have with 7,900.00$ in New York, NY (assuming you rent in both cities). This calculation uses our Cost of Living Plus Rent Index to compare cost of living. This assumes net earnings (after income tax).

NYC: Krasnodar
You would need around 1,781.46$ (116,235.10руб) in Krasnodar to maintain the same standard of life that you can have with 7,900.00$ in New York, NY (assuming you rent in both cities). This calculation uses our Cost of Living Plus Rent Index to compare cost of living. This assumes net earnings (after income tax).

Houston: Moscow
You would need around 2,845.95$ (185,689.96руб) in Moscow to maintain the same standard of life that you can have with 4,300.00$ in Houston, TX (assuming you rent in both cities). This calculation uses our Cost of Living Plus Rent Index to compare cost of living. This assumes net earnings (after income tax).
Houston: St.Petersburg
You would need around 2,251.30$ (146,890.38руб) in Saint Petersburg to maintain the same standard of life that you can have with 4,300.00$ in Houston, TX (assuming you rent in both cities). This calculation uses our Cost of Living Plus Rent Index to compare cost of living. This assumes net earnings (after income tax).
Houston: Krasnodar
You would need around 1,760.75$ (114,883.85руб) in Krasnodar to maintain the same standard of life that you can have with 4,300.00$ in Houston, TX (assuming you rent in both cities). This calculation uses our Cost of Living Plus Rent Index to compare cost of living. This assumes net earnings (after income tax).
Oklahoma City: Moscow
You would need around 2,886.37$ (187,050.13руб) in Moscow to maintain the same standard of life that you can have with 3,600.00$ in Oklahoma City, OK (assuming you rent in both cities). This calculation uses our Cost of Living Plus Rent Index to compare cost of living. This assumes net earnings (after income tax).

Oklahoma City: St.Petersburg
You would need around 2,278.90$ (147,683.50руб) in Saint Petersburg to maintain the same standard of life that you can have with 3,600.00$ in Oklahoma City, OK (assuming you rent in both cities). This calculation uses our Cost of Living Plus Rent Index to compare cost of living. This assumes net earnings (after income tax).

Oklahoma City: Krasnodar
You would need around 1,782.41$ (115,508.23руб) in Krasnodar to maintain the same standard of life that you can have with 3,600.00$ in Oklahoma City, OK (assuming you rent in both cities). This calculation uses our Cost of Living Plus Rent Index to compare cost of living. This assumes net earnings (after income tax).

And do not worry so much about Russian. Not only are english language menus and such available in most places in the larger cities, but the language itself is not nearly as difficult to grasp as you are led to believe. Sure you may need a few years of effort before you are reading Dostoyevskii in Russian, but you will grasp enough in half a year to live and get around, and if need be, hiring a part time translator is not expensive.
And finally, that costliest of all things for any American, the medical bills. Russia, like many European countries, has a dual medical system. The first is a government universal coverage that comes out of your and every other person’s taxes. This is available to all legal residents of Russia. Depending on what you need done and where you live on the quality of the service. Basic dental work or check ups will not require a long wait, more serious issues may and the further you are from the main cities, the worse the quality. The government is investing huge sums and providing incentives for doctors to move to small towns and villages, but this is all work in progress.
There is also the private sector, which for the most part, is high quality. There are of course quacks and crooks, like in any system, so buyer beware. But lets compare: the writer of this column had an infected molar, in which one of the roots rotted out and collapsed. The tooth was removed, all pieces of the root were removed, gum was opened up, drained and sewn up. All told, the cost was $90. In the US, the same operation costs $1,600 on average. An implant was put in the place of the lost tooth. The top of the line implant plus labour ran this author $550. In the US you will be lucky to escape with only $3-4,000. And so on and so on.
So, ready to make the life enhancing move you deserve? I will outline just how to do this, in the next instalment.

Characteristics of a Russian Meeting

As anyone meeting with anyone in Russia, there are a few ground rules you should be aware of: 

1. Timeliness While Russians are not as prompt as Germans, Russians are rather prompt. So being 5 minutes late is ok, anything later needs an excuse and one that is preferably called ahead. Aka: We are stuck in traffic. Being 30-40 or more minutes late without a formal reason, such as the tendency of Italians or Spaniards, is considered very bad manners. 

A side note on this, if during the meeting you agree to set due dates or deadlines for some document or action, be sure to accomplish it by the agreed upon date. Everything during the meeting will be set down in writing in the Minutes of Meeting and not meeting due dates is a major blow to one's credibility and reliability in Russia.

2. Inclusiveness It is considered very rude to turn your back on someone while continuing your conversation with another person in the group...one to remember for non-Russians who have no such issues. This additionally means, turning to your co-workers, and beginning a conversation in a separate language not understood by everyone. This is also considered very rude. If the need arises to have such a discussion, request some time alone, a break from the meeting and maybe a separate room to do so in.

 3. Emotions While getting into an emotionally "hot" discussion happens, never over do it. Never get personal and never ever ever throw a temper tantrum and walk out. I had an EPC project manager who would do this. He had zero respect from the other side who had to beg him to return. This is viewed as unmanly and childish.

4. Shaking Hands Do it with everyone and anyone who enters the room after the start and before you hand out or receive business cards individually. When leaving, equally, shake everyone's hand. Walking by some person who stops to talk to someone in your party? Shake his hand. And make it a firm hand shake. Additionally, women shake hands also, so not to shake the hand of a woman is a grave insult.

5. Woman enters the room to join the meeting? Get up and show respect, as if it was a senior person, and since 42% of Russian executives are women (twice that of the progressive West) it just may be. Additionally, if there are no more seats, surrender yours to the woman.

6. Bargain Hard Russian price negotiations used to be described as something between a mugging and a bar fight. Its gotten a bit more civilized but....I remember fighting a supplier over each 0.01$ of a price on forgings...ok we finally agreed to limit it to just full round dollars or we would never get done. Pulled out 15% savings from already low prices which saved us several million dollars. 

7. Never take the initial NO IT CANT BE DONE as the end answer. If the junior or secondary management says no, go straight to the senior leadership. If they say yes it will be yes. Equally, since the culture is conservative, use your persuasion skills to sell the idea, either by its merits or by its profitability.

8. Figure out who the trusted lieutenant of the general director is. Russian chain of commands are linier except for that special lieutenant who has the ear of the boss. 

9. Meetings must come to some decisions...why else are you in a meeting, other than if its just an introductory meeting.Southern peoples like to have meetings for the sake of meetings and no decisions are reached, this is very infuriating to Russians. Most meetings usually have a set agenda and the agenda is set to come to a decision.

10. All meetings will end in a Minutes of the Meeting with all parties involved signing. Sometimes getting the MoM done takes longer than the whole meeting and all parties most definitely must sign it, so be careful what actually goes in to it, as this is a legal document.

Why Russian Steel Goods Are Cheaper

There is an age old, ok more like several decades old, myth, that all things from China....and if not China then surely India, are cheaper and better quality than anything Europe and for that matter Russia can produce.

The truth of the matter is that this is a well crafted PR illusion that China has nourished for two decades and that most American managers, directors and VPs accept on blind faith. One sr. director of mine would repeat "I can't believe that Russia is cheaper than China" over and over at the start of every weekly meeting, even as we poured resources into establishing Russian suppliers. The facts were right there in front of him and with quite a bit of personal push we were moving in the right direction, but some part of him could no believe it.

He even had other supply chain managers demand that the Chinese forge shops give him the same prices as our Russian suppliers. To his credit, they did. Unfortunately for the company, that only lasted long enough for the company to invest in dies and samples and then the Chinese bumped their prices straight back up.

But why is this so and in what steel goods?

True, in open die forgings, the Chinese are kings and for good reason. Open die forgings are low technology, no engineering efforts pushing out blocks and round bar. You can easily dump minimally trained employees on to these efforts and the equipment does not need to be to high tech.

However, the Chinese quickly loose all advantages when faced with manufacturing details that are complex and thus engineering and machine driven. Closed die forgings, detailed machining, coatings and assemblies are all such items and in all such items, the Chinese are not cost compatible, not if a real analysis is done, and  when TCO costing models are used, it gets even worse.

Russian suppliers, in these categories, tend to be 10-40% CHEAPER than the Chinese. Yes, that's not a misprint. No its not 1-4% it is 10-40% and with the ruble devaluation, things have gotten even better.

Furthermore, taking into account TCO (Total Cost of Ownership), things only get worse. Considering that once producing at high quality, Russian manufacturers will remain true to the course and take great pride in manufacturing quality. Chinese suppliers tend to take great pride in maximizing profits and that tends to come at the cost of quality. Any shortcuts even potentially deadly ones will be observed over time with most Chinese suppliers.

We experienced several cases where we were forced to scrap up to half the Chinese production, which was still considered a good buy because of the per piece cost (on paper). Well, dear fellows, when you scrap half, the base price just doubled and that is before you count holding inventory costs, logistics, replacement (usually out of desperation at the highest spot prices) and lost business and contractual fines.

Furthermore, Russia is better placed to service Europe and the US logistically, with shorter routes and thus quicker times, requiring less safety stock to maintain. Russian suppliers get the 18% VAT refunded to them when their production goes to export, another price advantage on the bottom line.

Over all, you just should not argue with reality....but many Western managers just do.

The New Realities of Russian Sourcing

Many in the West may have missed the fact that Russia has opted out of Recession and has entered a  weak, economic growth phase. It has decoupled from Sanctions and has partially decoupled from the price of oil, with an economy based on manufacturing that is continuing to diversify. As a matter of fact, resource based economics makes up roughly 19% of the Russian GDP. This is the situation that brings us to this topic.

Sanctions, like war, bite and often bite the hand that unleashes them. A large part of Russia’s uplift has been based on over a score of major infrastructural and industrial mega projects that had previously been put off or the need for which had not been apparent as well as import substitution with various degrees of government assistance, something that was all but lacking in the pre Cold War 2.0 era.

To that end, the Russian government has taken a series of projects to economically expand the Far East and create the needed energy infrastructure to develop the Asian market away from Europe. Four greenfield projects, in the $2-4 Billion range are in the works for the Amur River area, specifically the Amurskaya Oblast. The first is entering its third and final stage of construction.

So how are sanctions biting?

On these and other government funded projects, American suppliers, unless working specifically through European/Asian or Russian subsidiaries and manufacturing in Russia, Europe or Asia, are banned from the projects, as politically unreliable suppliers. Yes, the Russian government has heard the US Congress’ continuous drum beat of economic, financial and political warfare and has shot back and as usual, while the US Congress gets fat off of special interest donations, US workers will suffer lost opportunities. The only exception to this is when unique technologies are at stake, but this is a rare exception.

Equally US companies, like Exxon, have lost their place in the various artic projects. Just in one light sweet crude oil patch in the Kara Sea, Exxon, who had a 10% stake, has lost an estimated $100 billion over a 10 year period. No, that was not a mistake in the number of zeros.

However, Europeans and Asians should not feel too relieved, as this position is not the only new force in play.

Going into effect on 1 January 2017 was a new decree signed by President Putin that specified a preference for local, Russian manufacturing. It works as follows: whenever a tender is launched, and everything now requires a full tender, and a foreign company is competing against a Russian company, the Russian company’s bid is automatically counted as 15% cheaper. In the event that the foreign company still wins, they are then forced to automatically lower their last bid offer by a further 15% or be disqualified.

Considering that 38% of the Russian economy is manufacturing based, with huge inflows in investment over the past 36 months, most everything needed for these projects can be found in country, either from Russian or foreign manufacturers. And that makes sense, considering that Russia has the lowest utility costs, some of the lowest taxes, lowest wage rates and low cost raw resources.

Due to sanctions, four automobile engine plants were built over the past 5 years. Compare that to zero for the proceeding 24 years. Nissan now builds cars in Russia for export to Mexico, South America and SE Asia. Half a year ago, Mercedes opened a new manufacturing plant, just west of Moscow. The state of the art plant employees some 1.500 employees for full cycle assembly.

What does not make sense is the raw fear of many medium and small Western companies to manufacture in Russia, where companies can sue and win against the government, as opposed to many countries where these corporations do manufacture. Russia ranks 28 in the World Bank’s list of countries in the Ease of Doing Business Index, moving up over 92 positions in 7 years. To put this in perspective, Japan is 29, China 31, France 32, Netherlands 42, Belgium 46, Italy 58, India 63, Brazil 124.

Since major reforms and extremely pro-business economic conditions have not been enough to fight against the Western yellow journalism, the government has decided to make a more pointed approach to forcing localization. Since Russia is one of the few countries running well over a dozen major mega projects in an otherwise recessionary global economy, they have the leverage to do so.