Russia Roundup: Singapore PM Visit, Journalist Departures, New Taxes?

By Teresa Rivas

The Van Eck Market Vectors Russia exchange-traded fund (RSX) is trading up at recent check, and there’s plenty of news for investors to digest.

Central Bank headquarters in Moscow, Russia

Reuters

Singapore’s Prime Minister Lee Hsien Loong will meet President Vladimir Putin and Prime Minister Dmitry Medvedev later this week on his first bilateral trip to Russia, the first for that nation’s leader since former Prime Minister Lee Kuan Yew visited in 1990, when it was still the U.S.S.R.

The Prime Minister will also meet the chairman of the Eurasian Economic Commission (EEC); Russia was Singapore’s 21st largest trading partner in 2015.

Details from Channel NewsAsia:

The EEC is the executive regulatory body of the Eurasian Economic Union (EAEU), which comprises Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan. For Singapore, the EAEU offers a combined market of 180 million people and a total GDP of US$4.2 trillion.

Singapore is expected to sign a Memorandum of Understanding with the EEC to promote closer collaboration, in areas like customs administration, trade in services and investments and information technology.

Three top editors have departed from the leading Russian media group RBC. The group had previously uncovered information that the Kremlin was unhappy with, and critics say that the move is evidence of continued decline of freedom of the press under Putin.

RBC had reported on a number of issues including the career and wealth of Putin’s daughter and son-in-law and the finances of Kremlin-linked political organizations and the Russian Orthodox Church.

The BBC reports:

Russian government officials have denied there is anything political in the changes at RBC. Most independent journalists disagree.

“The point is that RBC had begun to have a serious influence on public opinion, and that it was one of the most quoted outlets in recent times,” said Dmitry Muratov, editor of the independent newspaper Novaya Gazeta.

“When it is a matter of hundreds of thousands or millions of people, this is politics.”

Speaking of finances, Russia continues to deal with the consequences of low oil prices and sanctions related to its annexation of Crimea. Those two factors have combined to put significant strain on the nation’s budget.

The obvious answer is higher tax revenue, but that’s unlikely to be popular with Russians who have felt plenty of economic pain in recent years. That’s why any tax increase would come after the next presidential election, The Wall Street Journal says:

Several Russian officials say the government is considering raising income-tax levels and increasing value-added tax but that any changes would only take place after 2018—a presidential election year. Any increase would be a sensitive issue in Russia, where real incomes shrank 9.5% in 2015 and the number of those living below the poverty line was projected to grow in 2016 at its fastest rate since the 1998 crisis, according to the World Bank.

“Discussions are going on now about how not to look excessive and not to hit people too hard,” said one official.

Finally, Russia is not happy with the outcome of the Eurovision song contest, as the top prize went to the Ukrainian singer Jamala, who referenced the World War Two Soviet deportation of Crimean Tartars in her act.

Russia claims that jurors were swayed by an anti-Russian “information campaign” and some in Moscow are calling for a boycott to next year’s contest. Russia came in third place.

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Emerging markets have been synonymous with growth, but the outlook for individual nations is constantly changing. Countries from Brazil and Russia to Turkey face challenges including infrastructure bottlenecks, credit issues and political shifts. The Barrons.com Emerging Markets Daily blog analyzes news, data and research out of emerging markets beyond Asia to help readers navigate the investment landscape.

Barron’s veteran Dimitra DeFotis has been blogging about emerging market investing since traveling to India and Turkey. Based in New York, she previously wrote for Barron’s about U.S. equity investing, including cover stories and roundtables on energy themes. Dimitra was among the first digital journalists at the Chicago Tribune and started her career as a police reporter at the Daily Herald in the Chicago suburbs. Dimitra holds degrees from the University of Illinois and Columbia University, where she was a Knight-Bagehot Fellow in the business and journalism schools.