Russia has completely overcome the economic decline caused by the Covid-19 pandemic, President Vladimir Putin said on Tuesday during a meeting on economic issues.
“Based on the results of the seven months of this year, the gross domestic product has reached the pre-crisis level. The decline that was caused by the pandemic has been fully overcome,” the president said.
He pointed out that industrial growth in the country during the January-July period amounted to 4.4%.
At the same time manufacturing industries showed growth of 5.6%, Putin said.
“The volume of investments in fixed assets increased by 7.3% year-on-year in the first half of the year, which shows the positive mood of business and investors,” he added.
The president has set a task for the government to restore employment to the 2019 level by the end of 2021.
“What I want to say is that now, in the post-crisis phase, it is necessary to form a model of sustainable economic development, which could fully cover all the industries and regions of Russia… And, of course, economic growth is the key to successful implementation of state plans and projects, and achievement of national development goals,” Putin concluded.
The world’s largest vaccine producer, India, has announced that starting from October it will resume coronavirus vaccine exports to developing countries that have struggled to inoculate their populations.
The announcement comes after New Delhi, which had already exported 66 million doses to 95 countries, had temporarily halted vaccine shipments abroad in April amid a resurgence of cases at home.
According to Indian Health Minister Mansukh Mandaviya, the nation’s vaccine manufacturers “are expected to produce more than 300 million doses” in October for the country’s own vaccination drive, with any surplus supplies being sent to other countries in the global fight against coronavirus. “We will help the world, and through Covax we will also fulfil our responsibility,” the minister said.
Covax is a multilateral initiative which aims to provide access to Covid vaccines to all the countries of the world. It is led by the Global Vaccine Alliance (Gavi), the World Health Organization (WHO) and Coalition for Epidemic Preparedness Innovations (CEPI).
In June Covax, which expected to supply 1.9 billion doses for the entire year, cut its forecast partly because of the export ban in India. It now expects to distribute 1.4 billion shots by the end of 2021.
Meanwhile, India wants to vaccinate its adult population by the end of this year. It has given more than 818 million doses of the three approved jabs since the beginning of the vaccination drive in January. So far, over 609 million people (more than half of India’s eligible population) have received at least one dose. Statistics show that 21% of eligible adults in the country are fully vaccinated.
The US says Russia must increase supplies of natural gas to Europe through Ukraine to curb skyrocketing energy costs, sticking to its negative stance on the launch of Russia’s Nord Stream 2 pipeline.
“The reality is there are pipelines with enough capacity through Ukraine to supply Europe. Russia has consistently said it has enough gas supply to be able to do so, so if that is true, then they should, and they should do it quickly through Ukraine,” Amos Hochstein, senior adviser for energy security at the US State Department, said in an interview with Bloomberg TV.
Hochstein said supplies of gas from Russia to Europe are “inexplicably low compared to both previous years and to what they have the capacity to do.” He also said that Russia’s state energy giant Gazprom’s refusal to book additional gas transit through Ukrainian territory for October “increases the concern.”
The US official also accused Moscow of trying to use Europe’s energy crisis to speed up the launch of the newly constructed Nord Stream 2 pipeline, which runs from Russia to Germany through the Baltic Sea. Hochstein underlined that US President Joe Biden and his administration oppose the launch of the project.
Gas prices in Europe have been hitting records, with October futures on the Dutch TTF exchange reaching record $963.9 per 1,000 cubic meters this month, while on September 20 the estimated price was $911.2.
Russia’s Gazprom has repeatedly pointed to the connection between high gas prices and lower-than-needed reserves in European underground storage facilities ahead of the approaching winter. As of September 19, those reserves were only 72% full, TASS reported, which is nearly 14% lower than in the past five years.
However, Gazprom emphasized last week that its current volume of gas supplies to Europe is in full compliance with the existing contracts. The company has been uneager to book additional volumes in the pipelines running through Ukraine due to high fees.
Gazprom is also counting on the launch of Nord Stream 2, a pipeline capable of delivering 55 billion cubic meters of Russian natural gas annually. The pipeline’s daily capacity of gas supply is comparable to the entire volume of liquefied gas that is now supplied to Europe.
However, Russia may have to wait up to four months for EU certification required to start deliveries. The project has been repeatedly delayed under pressure from Washington and some Eastern European countries, which view increasing energy imports from Russia as a threat to Europe’s energy security.
Europe is being ravaged by an unprecedented energy crisis, and it may already be spreading. Asia, the world’s biggest buyer of gas and coal, may be next, with China particularly vulnerable because of the size of its economy.
Perhaps somewhat surprisingly, the big problem for China is not natural gas. It’s coal, which powers the majority of its power plants, Bloomberg reported this week, citing state-run outlet China Energy News.
According to a report in the news outlet, Chinese power plant operators are finding it hard to buy enough coal to keep their facilities running, which is raising the likelihood of an energy crunch when winter comes. Inventories are low because of the surge in coal prices this year, and some power plants have already had to turn off their boilers to save costs.
It appears that just like the gas crisis in Europe, this one was years in the making. The European energy crunch should not have come as a surprise given Europe’s decisive shift away from fossil fuels and the consequent underinvestment in local gas production, which made it almost entirely dependent on imports for its energy security.
Likewise, China – along with India – is about to become the victim of underinvestment too, in coal. The dirtiest fossil fuel and the target of much energy transition work has fallen out of favor with investors so badly as they seek investment opportunities in renewable energy that the coal price spike this year must have come as quite a shock.
As Nikkei Asia reported earlier this month, benchmark coal was trading at $177.50 per ton on September 10. This was a more than twofold increase since the start of the year and an even bigger increase from the $50 per ton that benchmark coal was trading at a year earlier.
“What we are seeing is a dilemma for investors, financiers as well as companies,” Shirley Zhang, principal analyst at Wood Mackenzie, told Nikkei Asia.
“Despite the effort of moving the whole region into a cleaner future, you still need coal for the next 10 years.”
There is, indeed, a dilemma, and it is between a green transition and energy security. The surge in coal and gas prices is proving that the energy transition will be neither smooth nor easy, and government decisiveness in net-zero goals will be nowhere near enough to effect it. But there are more immediate implications of an energy crisis in China. It will spill globally.
In the UK, industries are already feeling the pinch of soaring gas – and electricity – prices. There is talk about blackouts, although energy minister Kwasi Kwarteng has assured the public these will not happen. But if industries are struggling, that’s not good for inflation and economic growth. And China, while a much more centrally controlled economy than the UK, is not that different in the fundamentals. If electricity prices rise, the prices of everything else will rise, hitting growth.
What’s worse is that if there is not enough coal and gas for China, there will not be enough gas and coal for everyone else who needs to import it. Countries with local coal and gas production will rake in a fortune from energy exports. But the rest, having to pay through the nose for that energy, will see the same effects on their economic growth, namely a potentially severe stumping.
A lot has been said about the emission aspect of fossil fuels. The current crisis offers another angle: fossil fuels tend to get expensive, sometimes prohibitively so, when demand significantly exceeds supply. This is, in fact, one of the strongest practical arguments in favor of renewables: you may not have gas reserves, but every country has sunshine and wind. Renewables are good for energy independence. And the latest crisis in Europe and the risk of a crisis in China only shows that we are nowhere near this energy independence.
Another massive cyberattack on a major US agriculture group has forced the services provider’s systems to go offline. The attack is believed to have been carried out by a successor of the Colonial Pipeline hacker.
Boom Bust’s investigative journalist Ben Swann analyses the threat and explores whether the cyberattack could cause major disruptions to America’s food supply.
