Kiplinger.com publishes news story revealing that Russia too is feeling the global economic crisis: “Russia is suffering the effects of the global credit crunch, but that doesn’t seem to be making it any less of a threat to the U.S.”.
The combination of the Georgia war earlier this year (in August) and the US subprime mortgage credit crunch in the summer of 2008 means that Russia is getting hit very hard, at least economically. The article by Andrew C. Schneider goes on to stating that: “Foreign investment has dropped by roughly 90% since the Georgia war. The Russian stock exchange has dropped 80% since May. The multinational banks that were willing to tolerate state intervention and lack of corporate transparency when credit was loose and oil and metals prices were rising have shut off the taps. All the major sectors that have been driving Russian growth — energy, metals and mining, finance, construction and retail — will suffer. Russia’s foreign currency reserves, the third largest in the world till recently, have fallen more than 20% to less than $500 billion. The ruble has fallen 15% against the dollar from its peak in July, pushing up the cost to Russian companies of servicing their dollar-denominated debts.”
Image by lyng883 under CreativeCommons
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