By DMITRY KOSYREV / Pic By BLOOMBERG
Consumer credits are back, the economists are telling us, bringing consumers back to shopping malls
Lean, angry and buying again — that’s what Russians are today. Let’s start with “lean”.
My hairdresser tells me that, while in December his old customers had to come by appointment, this year he doesn’t know what to do with himself most of the time.
All through last year, people who previously saw him once in two weeks were now content with a once-in-a-month haircut.
And, he adds, everybody is complaining or is plainly angry at something, like taxes and house utility bills, but mostly at the government in general.
Angry at the world, too, or at least at the Western part of it, with its sanctions and endless accusations of any kind.
We’ve had a year of idiotic nationwide scandals, on the subjects of arts and culture, religion or divorce settlements of stars.
The TV show that I attend regularly slides into furious shouting of eminent experts at each other.
But at the same time the people are back to shopping centres this year-end, Moscow has been clogged by cars these days.
So, where do they get the money now, if they were saving on haircuts? Consumer credits are back, the economists are telling us.
These credits you get right at the cashier’s desk when buying, say, a modest refrigerator or washing machine.
It takes maybe five minutes to spread your payments, for a year or more, in small portions, they just write your credit card number into a contract and copy your ID.
Why so, if only last summer no customer was willing to burden oneself with such credits? That’s because many can see the good days are back, just in time, right when everyone has spent one’s last resources.
The banks are not afraid anymore to risk bad credits for two basic reasons.
First, the economy in general is definitely growing.
There are bets being made on the figure of 2% (above or below it). The Ministry of Economy tells us that the growth of 2017 will be more than 2%. Economists are saying that 1.8% is much more likely.
And, second, 2017 was the year of investment records (5% more than in 2016). We are talking about direct foreign investments into concrete projects, not in the volatile money markets. Money is coming to Russia and staying here.
Direct investments from Asia are up 25% in 2017 to US$32.4 billion (RM130.25 billion). You may think China is the leader. After all, it was China that initiated a series of deals with Russia after Russia’s disagreement with the West in 2014.
But, no, its leadership will come maybe in 2018, after expected big deals make China a virtual co-owner of several big oil and gas (O&G) Russian companies.
The biggest Asian investor into Russia is, unexpectedly, Japan, willing to engage not only in hydro-carbons, but also in industrial ventures.
The US$15.1 billion the Japanese placed here is almost twice more than China’s US$8 billion.
And, surprisingly, Europe in general is investing more than Japan.
There is no final figure for 2017 yet, but it is known that Russia has suddenly made it to the 10th place in Europe as direct investments’ destination.
Germany, as usual, is in the lead, putting in 20% more money than a year ago into 43 big industrial ventures.
America, in the meantime, is isolating itself from the trend, doing almost no business with Russia.
So, we have foreign money coming in.
But at the same time Russia is welcoming back its old love, the O&G money.
Nobody expected oil to go up to US$60 a barrel, but there it is.
I recently met a typically enthusiastic oilman (office and limousine type), predicting the price hitting a US$100 per barrel, if the Chinese go on raising their demand.
But in the meantime, the economy has almost overcome its oil curse, aiming to cut the hydrocarbons revenue budget share to 5% from the current 7%-8%.
In any case, the excessive oil bonanza goes directly to replenishment of currency reserves.
So, things are looking up, but the public, even the shopping centre crowd, is still full of aggression after two-three harrowing years.
It hasn’t yet decided to vote against the President Vladimir Putin (his re-election is due on March 18, 2018, and he’d get 83% of the vote if it was today).
But at least two key ministries, Health and Education, are a constant target of not always fair attacks.
There are other targets, like big businessmen who have substantial “unpatriotic” holdings abroad.
Even ladies driving flashy SUVs are under fire.
There were cases when courts, hearing cases of such ladies hitting someone on the pedestrian crossings, were besieged by people demanding the harshest possible penalty.
Men are somehow being spared such attitude.
But in any case, I like an angry Russian more than a downcast one.
- Dmitry Kosyrev is an author of 8 novels and a book of short stories as well as a columnist for 2 Moscow publications. Orientalist by education (Moscow University), he has a special love for Malaysia.