#6 - JRL 2009-237 - JRL Home
Moscow News
December 28, 2009
Predicting Russia in 2010
Anna Arutunyan, Ed Bentley, Andy Potts, Jen Chater, Ayano Hodouchi and Vladimir Kozlov

International relations

Will Russia and the US sign a new START treaty?

Fyodor Lukyanov, Russia in Global Affairs:
There's no doubt, yes - the political decision has already been taken. Agreeing the details is always very complicated. Considering that never has such a complex document been prepared in such a limited time - the delay is not a surprise.

Who will win the Ukrainian election?

Sergei Markov, State Duma deputy:
Yanukovych, because his approval rating is 15-16 per cent higher than Tymoshenko's and his negative rating is 10-13 per cent lower. Also, the Orange [Revolution] has bankrupted itself.

Will Saakashvili remain Georgian president?

Peter Lavelle, RT: It's more than likely that he will remain in power because he continues to have control of the military and security services. Civil or political society does not matter in Georgia, and we have seen this repeatedly since Georgia's aggression against South Ossetia. ... Until there is a critical mass, he will serve out his presidency, but with no moral authority to achieve any meaningful domestic or foreign policies.

Will Russia's relations with Georgia improve?

Sergei Markov: No, but there will be some infrastructural improvements. Communication will be more accessible, there will be charter flights for New Year, there will be direct flights and [land routes]. But while Saakasvhili is in power, relations as a whole will not improve. It's like [dealing with] Hitler.

Will Iran get a nuclear weapon?

Ariel Cohen, Heritage Foundation: Yes, I think Iran may get a nuclear weapon if its programme is not disrupted politically or otherwise. ... It's going to be a real test for Russian leaders to make the right decision, one that will keep Russia with the rest of the civilised world and not as a backer of an irresponsible regime of religious fanatics.

Russian politics

How successful will Dmitry Medvedev's reforms be?

Roland Nash, Renaissance Capital: Success is a relative concept. Russia has been mired in crisis throughout Medvedev's presidency. He and his team have done a superb and remarkably under-appreciated job in steering the country through the crisis. [But] they have not had the resources to even begin tackling the major reforms Russia needs to diversify away from natural resources and reliance on international capital. ... You will see some success in some areas, including in the electricity and financial sectors.

Chris Weafer, Uralsib: We expect to see more progress in 2010. ... A greater determination and more pragmatic policies have emerged. Russia needs to attract [more] foreign direct investment and involvement from companies in industries that represent diversification - otherwise the economy will remain trapped in the boom-bust commodity cycle. The 2012 election provides a powerful incentive for the president's team to start showing results in 2010.

Will security improve in the North Caucasus?

Sergei Markedonov, Institute for Political and Military Analysis: No. For that to happen, we need a completely new system of government. As long as kickbacks are the chief determining factors of policy, nothing is going to change [there].

Will United Russia face a stronger challenge from other parties?

Vyacheslav Nikonov, Politika Foundation: Yes. The economic crisis is not over. ... Our economic indicators are below those in the rest of the world, so there is a basis for discontent. ... Public sentiment will be critical, and so will the parties. It will be difficult for United Russia, because while it isn't directly responsible for state policy, it cannot criticise it. It will be forced to ... [criticise some policies or] ministers.

Will Yury Luzhkov stay on as Moscow mayor?

Vladimir Pribylovsky, Panorama think tank: No, I think he will leave in 2010 - he has a lot of enemies in the Kremlin. He guaranteed loyalty from Muscovites, so they kept him under Yeltsin and Putin. But now that question has been decided and he may leave as early as February or March, but by the end of the year certainly. [There are] three likely successors: Oleg Mitvol, Igor Shuvalov or Sergei Naryshkin.

Business and Finance

Will the oil price go up or down, and by how much?

Chris Weafer: We forecast an average Urals price of $71.5 per barrel in 2010, up from $60.4 in 2009. It is very likely that the oil price will be even more volatile and generally weaker through the first quarter, before recovering in the second half - due to the very high level of oil inventory in the US and a still unclear picture about demand growth. The concern that US interest rates will start to rise mid-year and boost the value of the dollar is also a negative for the oil price during the first half - but as global growth picks up in the second half ... the oil price is expected to be stronger from the summer.

Will unemployment rise or fall, and by how much?

Vladimir Tikhomirov, Uralsib: Unemployment should start to fall from March-April, when economic activity tends to pick up in Russia. The anticipated economic recovery should lead to an unemployment rate of 7.4 per cent by the end of 2010.

Will the RTS go up or down, and what level will it end the year at?

Roland Nash: We can look forward to the resumption of Russian growth, further declines in interest rates, rising reserves, banks starting lending again, and maybe even the Holy Grail of a little structural reform. This suggests that Russian firms ... will move from crisis mode to thinking about how to move their business forward. [There will be] a lot of assets changing hands, capital raising and another good year for the RTS. Our official RTS target this year is 1,900.

Chris Weafer: Our year-end target is 1,950. But, unlike 2009 when the index went up in almost a straight line, the equity market will experience a lot more volatility in 2010. That is because, while the domestic drivers have become more positive, the global environment is expected to be much less clear. ... As rising US rates start to reverse the so-called "risk trade", investors in Russia will need to rely more on ... those stocks and themes that will benefit most from domestic expansion and infrastructure spending. In 2010, for example, the banks and electricity sector will generate better gains than the oil majors.

Will Russia finally join the WTO?

Roland Nash: No. Predictions about imminent membership of the WTO have been made every year since I arrived in Moscow in 1994. Experience suggests that huge scepticism is the sensible approach.

Will Moscow apartment prices go up or down?

David Gilmartin, Troika Relocations: Barring new financial shocks, prices should not fall any more, and some sectors of the market will see prices recovering. At the higher end of the market ... fewer expats [are] coming in, and ... many of those who stayed have downshifted as their employers cut costs. With ... apartments at $3,000 or less, prices are already strengthening [on strong demand]. Russians ... are finding it more difficult to get mortgages, or have simply decided to adopt a wait-and-see strategy, and are renting for now.

What will be the trends on the Moscow restaurant scene?

Roman Rozhnikovsky, restaurateur: Everything is moving in the direction of simplification; there's an obvious tendency towards democratisation in food. ... Pomp, pretentiousness and glitz are on the way out, and the task is clear - to feed inexpensively and tastily in the right atmosphere, and retain your clientele.


How will Russia perform at the Vancouver Winter Olympics?

Leonid Tyagachev, head, Russian Olympic Committee: It will be a difficult Olympics but we are now developing our youngsters. ... We are already looking ahead a little to the 2014 Sochi Games. It's my wish that [we] will come back with medals in [28 events]. I'm sure our athletes will do everything not to disappoint, especially in the cross-country skiing, biathlon and even in snowboarding.

Will Guus Hiddink stay as Russia's football coach?

JK Samson, CSKA fan: The right thing to do would be to vacate the post honourably rather than run the risk of failing twice - but I think for him it is unfinished business. If he does leave only a Russian can take over; I think this will be good for the national team.


Who will be the next breakthrough artist in Russian music?

Alexei Mazhayev, InterMedia agency: I would want it to be the band Invite, but most likely it will be Dasha Luxe, who is now primarily known on YouTube. The 1980s synth-pop seems to be back.

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