“None of them” was Russian President Vladimir Putin’s response to questions regarding his preferred pension reform option, “Why? Because [raising the retirement age] cannot be pleasing to the overwhelming majority of our citizens”. Indeed, they have proven to be very unpopular. Public outcry against proposed pension reforms – that include raising pension ages from 60/55 to 65/63 for men and women respectively – has been pronounced with tens-of-thousands at various protests since their announcement in mid-June; Putin opinion polls are at their lowest in years. Some indicators put his approval ratings at the lowest in almost four years following the recent sharp drop from above 80% to now ‘just’ 67%.
Steven Mnuchin, the U.S. Treasury Secretary, will have to be on his game over the next few days as the G20 finance ministers meeting in Buenos Aires begins. The talk of tariffs and trade wars will never be far from ministers’ minds as Mnuchin tries to defend Donald Trump’s trade plans against an increasing irate audience. As former Treasury and Federal Reserve international policy official Edwin Truman put it, ‘He’s going to get an earful from them’ adding, ‘Mnuchin is going to be playing defence in his comments and he’ll put the best face on it that he can’. Whilst the tariffs announced so far may have a limited global impact, anything that constrains trade will also constrain global growth, so any escalation of trade wars will need careful watching.
This year's G20 Summit concluded on Monday with ~85% of the world leaders departing from China's Hangzhou City and attention seeking North Korea launch three Rodong ballistic missiles which ended up in the Sea of Japan. Poor Mr. Obama neither had a red carpet rolled out on arrival, nor an appropriate staircase, this upset Mr. Trump no end, who tweeted his total disbelief at the ‘sign of such disrespect’. ‘First World problems’ comes to mind.
It seems there was a lot of chat at the Summit but very little outcome. For one, UK PM, May stood firm, not settling on any firm trade deals, despite Japan’s 15 page memo warning of Japanese businesses’ potential exit and Obama’s statement that although 'very special', the US’s relationship with the UK is not a priority.
Comrades, today sees the one year anniversary of when the Russian rouble was set free from central bank control, the first time in its post-Soviet history.
Twelve months ago the Russian central bank decided to stop depleting their foreign reserves and allow the rouble to fall, and it did, down over 38% over the last twelve months against the US dollar. This fall almost mirrors the fall in the oil price; over the same period brent crude is down 42%. So what have been the consequences of this currency devaluation?