February 23, 2019

Former teacher & mother of 4 becomes Russia’s 2nd female billionaire

This year, Wildberries – the leader of Russian online retailing, where you can find hundreds of thousands of items from clothing to electronics – has made it into the top 5 most valuable companies in the country, according to Forbes. The company Bakalchuk owns is now in fourth place in the Forbes rating, with a net value of $1.2 billion.

As Wildberries is not a public company, its valuation was based on the volume of company sales and profits, as well as the financial data of similar projects and investors’ estimates.

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Founded in 2004, Wildberries is sometimes compared to global online retail giant Amazon. In 2018, Forbes said that the company’s value stood at $600 million. However, the founder herself said it could be twice that amount. Last year, it significantly increased the number of pick-up points to 2,799 and started the construction of additional warehouse facilities in the suburbs of Moscow and in the city of Ekaterinburg.

The first woman to be added to Russia’s richest people list was the former Moscow mayor’s wife, Elena Baturina, who heads investment and construction company Inteco Management.

From mum on maternity leave to ‘Russian Jack Ma’

Tatyana Bakalchuk, 43, is one of the most mysterious personalities among Russia’s wealthy – there are not many photos of her on the internet, and some even doubt that she exists. She usually shies away from the public eye, but gave her first video interview last year.

She started her billion-dollar company just one month after her first child was born (she now has four). Back then, Bakalchuk wanted to get back to her job as an English teacher, just like Chinese billionaire Jack Ma. However, the baby required a lot of her attention, and she had to come up with something new.

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At the dawn of her business, the woman and her husband Vladislav had around $700 to launch it, and spent around $70 per day on advertising. She ordered clothes from a German mail-order catalog, and posted the scanned pictures of them on her website. She delivered the parcels to her customers instead of making buyers pick up their purchases from her first “office” in her apartment.

Her business eventually started growing, and she began working directly with contractors when the businesswoman faced her first setback. The first person Bakalchuck hired to help her stole all the money set aside for paying the manufacturer, and vanished. The woman struggled to cover the loss, but did not lose faith in people.

From a small office in her apartment, the company grew into a giant with its own depots and 15,000-strong workforce. She says that she does not see any direct rivals to her business on the Russian market, but often tries to learn from others. Honesty and devotion of people to what they do remains one of the main values of Wildberries, according to Bakalchuk.

“You should not be ashamed to look your children and your employees in the eyes… Everything you do, you do according to your conscience,” she said.

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Arrested US investor faces 10 years in Russian prison for major fraud

The US citizen, who was put in pre-trial custody by a Moscow court, could get up to 10 years in prison along with a fine of up to one million rubles (US$15,000) over alleged participation in the fraud scheme, which involved Russia’s Vostochny Bank.

The court had previously rejected Calvey’s request to release him on five-million-ruble bail. The prosecutors insisted that the detention was an absolute necessity, as the detainee might flee the country. Calvey’s attorney reportedly vowed to challenge the detention order.

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Several other people were also detained on suspicion of taking part in the scam.

According to investigators, Calvey embezzled 2.5 billion rubles from Vostochny Bank via a fraudulent scheme. The investor and his associates allegedly persuaded the bank’s board to accept a package of shares of an enterprise instead of paying off a debt. While the shares were said to be worth over 3 billion rubles, their real cost was merely 600,000 rubles.

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US & China start outlining deal to end trade war – reports

Sources told Reuters the broad outline of what could make up a deal is beginning to emerge from high level talks held on Thursday and Friday in Washington.

Beijing and Washington are pushing for an agreement by March 1 which could mark the end of a 90-day truce that US President Donald Trump and Chinese President Xi Jinping agreed to when they met in Argentina late last year.

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According to the sources, the sides still remain far apart on demands made by the Trump administration for structural changes to China’s economy.

Negotiators are drawing up six memorandums (MOUs) of understanding on structural issues. Those include forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture, and non-tariff barriers to trade, two sources familiar with the progress of the talks said.

The process has become a real trade negotiation, one of them said. The other source cautioned that the talks could still end in failure, adding, however, the work on the MOUs was a significant step in getting China to sign up both to broad principles and to specific commitments on key issues.

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Washington has repeatedly accused Beijing of stealing trade secrets, forcing foreign companies to hand over technology as the price of access to the Chinese market, and subsidizing its own tech companies. As part of the standoff Washington imposed tariffs on $250 billion in Chinese imports. Beijing retaliated with levies on $110 billion in US goods.

Trump has threatened to extend the tariffs to an additional $267 billion in Chinese goods if a trade deal is not reached by the March 1 deadline. The White House also plans to hike tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent. China denied all the accusations, calling US measures protectionist.

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Gold hits 10-month high amid hopes for successful outcome of US-China talks

Gold for April delivery on Comex rose 0.2 percent to $1,347.1 per ounce after touching a high of $1,349.80. The contract increased by 1.7 percent to mark the highest close since April 19.

March silver futures rose 1.3 percent to trade at $16.177 an ounce, following a 1.4 percent rise earlier this week. The metal was up 15 percent since summer. Palladium briefly jumped above the $1,500 per ounce mark for the first time ever. The best performer among precious metals, palladium, is up nearly 17 percent on the year and up 80 percent since its August lows.

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The US dollar moved lower against a basket of six major currencies before bouncing back as the US Federal Reserve rekindled expectations for another rate hike in 2019.

A weaker dollar traditionally boosts gold futures, as the precious metal becomes cheaper for market participants that heavily invest in other currencies. At the same time, investors’ hopes for positive results of China-US trade talks may boost demand for emerging-market currencies, putting some pressure on the greenback and, thus, supporting prices for gold.

“Hopes for a deal between the US and China and the US dollar, which is slightly lower, are offering support to the metal,” ABN AMRO analyst Georgette Boele told Reuters.

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Russia’s industrial zone in Egypt’s Suez Canal to be launched by end of 2020-early 2021

That’s according to the head of the Suez Canal Authority, Mohab Mamish, who told TASS the zone will be “launched in late 2020 – beginning of 2021.”

He said factories manufacturing agricultural machinery will be located in the Russian industrial zone, adding that the machinery is in demand not only on the Egyptian market, but also in the markets of other African countries, as well as the Middle East and Europe.

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According to the Russian Minister of Industry and Trade, 20 Russian companies have already confirmed their interest in locating their facilities during the project’s first phase until 2023. In general, the number of companies interested in participating in the project exceeds 50.

The ministry expects that by 2026, resident companies will be able to manufacture production worth US$3.6 billion annually.

According to Russian President Vladimir Putin, around $7 billion worth of investments will be attracted to the zone.

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The decision to build a Russian industrial zone in Egypt was agreed in 2014. The industrial park will have a friendlier tax regime for resident Russian firms and is expected to provide tens of thousands of jobs. The tax rate for businesses in the project and personal income tax will be 10 percent. Sales tax will be abolished.

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Five years ago, Cairo announced the modernization of the Suez Canal, with a vast range of services, as well as several industrial parks, including Russian, Chinese, and Italian areas.

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US arm-twisting & pipe dreams aside, Europe just won’t quit Russian gas imports

Meeting with US President Donald Trump in Washington on Wednesday, the 32-year-old chancellor stood up for Austria’s continued support for the Nord Stream 2 pipeline, which is due to be completed later this year.

Austria wants a secure gas supply, Kurz told local media after meeting with Trump, adding that Vienna has no problem with buying liquid natural gas (LNG) from the US, “but as long as the price is better, Russia is more attractive as a partner, as Trump can certainly understand as a former businessman.”

The price of US imports is “currently not competitive,” Kurz said, so the gas for Austria “will continue to come mainly from Russia” in the foreseeable future.

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Germany has also pushed back on US pressure to halt the pipeline in recent days, with the new leader of the ruling CDU party Annegret Kramp-Karrenbauer describing the project as something that “just can’t be turned back” and adding that Germany has “quite legitimate economic interests in energy supply.”

Once completed, Nord Stream 2 will have the capacity to stream 110 million cubic meters of gas from Russia to Germany, and onwards into Europe. While this makes Berlin and Vienna happy, the prospect is apparently keeping the authorities in Warsaw and Kiev – who currently profit from transit fees on Russian gas – awake at night.

On Tuesday, two Polish diplomats from Warsaw’s mission to NATO published an appeal for the alliance to treat natural gas supplies as a major security issue, and to throw its weight behind establishing Ukraine as an alternative gas supply hub to counter Russia.

Though ostensibly acting in their personal capacity, Dominik P. Jankowski is a political adviser for the Polish mission to NATO, and Julian Wieczorkiewicz works for the same mission as an expert in energy security. Their pitch appeared on the pages of National Interest, a Washington-based magazine of the think tank that, back in 2016, hosted then-candidate Donald Trump’s flagship foreign policy speech.

Once Nord Stream 2 is complete, Russian gas deliveries will be able to bypass Poland and Ukraine entirely, which Wieczorkiewicz and Jankowski obviously find alarming. Ukraine, they point out, earns roughly $3 billion in transit fees per year, which is almost Kiev’s entire $3.6 billion military budget from 2017. How dare Moscow deprive Ukraine of money to fund its war against ‘Russian aggression’!

The Russia-hating establishment in the US is also on board with this narrative: a January 2018 report commissioned by Senate Democrats also argued Nord Stream 2 was endangering Ukraine’s gas revenues. What’s left unsaid, but definitely kept in mind, is that bypassing Ukraine and Poland would deprive Washington of the ability to interrupt gas deliveries to Europe, while blaming Russia for it.

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Wieczorkiewicz and Jankowski’s proposed “solution” is to make Ukraine a depot for natural gas from Norway and the US, arguing that Washington is the world’s largest LNG producer and that in 2018 Poland demonstrated that US-made LNG can compete with Russian gas on European markets. There is only one problem: Norwegian exports are actually declining, and the US simply can’t make up the difference.

A year ago, US Energy Secretary Rick Perry argued that Washington “is not just exporting energy, we’re exporting freedom.” The choice of where to buy energy offered to allies in Europe is freedom, he said, “and that kind of freedom is priceless.”

Economic reality does not care about geopolitical pipe dreams, however. Statistics from 2017 show that Europe imported 164 billion cubic meters of gas from Russia, while Europe and Turkey combined accounted for only around 3 billion cubic meters of US LNG. More recent EU data shows that Russian imports only increased in 2018, to over 40 percent, while US imports weren’t big enough to register by themselves, but rather fall into the “other” category.

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A report on the state of Europe’s LNG infrastructure in 2018, produced by the international law firm King Spalding, shows Eastern Europe with only one LNG import terminal – in Poland’s Swinoujscie – and one floating storage and regasification (FSRU) facility in Lithuania’s Klaipeda. That’s not exactly a feasible alternative to Russian pipelines, by any stretch of imagination.

While the US is indeed a growing producer and exporter of LNG, it currently has only two operational liquefaction terminals – one in Alaska and one in Louisiana – with two more under construction and one in Texas whose opening was delayed until September 2019 at the earliest, reportedly due to flooding damage during the 2017 Hurricane Harvey.

Then there is old-fashioned supply and demand. In 2018, China and Japan were willing to buy US gas at much higher prices – $8 and up per million BTU – compared to $6 50 in Europe, for instance – so that’s where the US LNG went. The trade war between the US and China launched by the Trump administration has since resulted in higher tariffs on US LNG, making Russian gas more attractive to Beijing. Gazprom’s new pipeline to China is expected to open ahead of schedule in early December 2019. Meanwhile, there is no indication the price of US gas in Europe has become any more competitive.

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Even the authors of the “sanctions bill from hell”aimed against Russia have conceded that it does not specifically target Nord Stream 2. Dubbed ‘DASKA,’ the proposal was reintroduced last week by Senators Bob Menendez (D-New Jersey) and Lindsey Graham (R-South Carolina).

“There’s no specific provision here on Nord Stream 2,” Menendez told reporters in Brussels on Monday, adding that the US was seeking “close collaboration” with Europe on perfecting anti-Russian sanctions.

Simply put, giving up Russian gas imports would be “economic suicide” for the EU, as geopolitical expert Dr. Pierre-Emmanuel Thomann told RT last month. EU and NATO allies have already suffered the brunt of economic consequences from Washington’s obsession with sanctions against Russia since 2014. As statements from German and Austrian leaders clearly show, giving up gas would be a step too far.

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Article source: https://www.rt.com/business/452034-europe-russia-gas-us/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Bitcoin is ‘brilliant, much better’ than paper money, but no use for Tesla – Elon Musk

Musk, who was once in hot water over a bitcoin-related tweet, touched upon the crypto topic as the discussion steered away from Tesla in an interview for ARK Invest’s podcast, released on Tuesday.

“Paper money is going away and cryptocurrency is a far better way to transfer value than pieces of paper,” Musk told hosts Tasha Keeney and Cathie Wood, adding that despite its ability to bypass currency controls, it still has some downsides.

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Bitcoin is quite “energy intensive” as people have to use powerful computers to create a new token. At the same time Tesla is not going to jump on the bandwagon and has no plans for bitcoin, according to the CEO.

“Bitcoin’s structure is brilliant but I don’t think it would be a good use of Tesla’s resources to get involved in crypto,” Tesla founder said.

Musk earlier admitted that he has small cryptocurrency holdings, some .25 BTC, gifted by a friend “many years ago.”

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In October last year, the billionaire’s Twitter account was suspended after he asked one of his followers if they’d like to buy some bitcoin. Musk explained he was “just joking” at the time and the account was blocked as there was “some automatic rule that if you try to sell Bitcoin or something.”

The tweet came shortly after some impersonators staged a crypto giveaway scam via a verified Twitter account masquerading as Musk.

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Russia remains Ukraine’s key trade partner despite Kiev’s claims of cutting economic ties

Sales of Russian produce to Ukraine saw 12.3-percent year-on-year growth to US$8.1 billion. That makes Russia the biggest Ukrainian supplier, leaving China, Germany, Belarus, and Poland far behind. At the same time, the Russian market remained a major destination for Ukrainian exports. Ukraine sold $3.7 billion worth of goods to Russia, marking a 7.1 percent increase compared to the previous year.

© AFP / LUKE SHARRETT Russia remains main supplier of coal to Ukraine as coming bitter frost forces Kiev to boost imports

Moscow suspended the free trade zone deal with Kiev shortly after the Ukrainian government signed an association agreement with the EU. Ukraine was automatically included on Russia’s counter-sanctions list against the EU, introduced by Moscow in 2014 in retaliation to European penalties over re-unification with Crimea and Russia’s alleged military involvement in Ukraine’s eastern regions.

In 2015, Ukraine imposed sanctions on a wide range of food imports from Russia, including meat and fish, coffee, dairy products, chocolate and confectionery, grains, cigarettes, beer, and many others. Last year, Kiev added fertilizers to its endless list of restrictions. In December, the Ukrainian authorities extended the measures for another year. The country also introduced sanctions against several individuals and entities.

In response, Russia banned the import of more than 50 Ukrainian goods, worth $510 million. The Kremlin announced that the restrictions can be lifted if Kiev gives up its own restrictions targeting specific Russian goods.

Despite bilateral restrictions, trade turnover between Russia and Ukraine has been increasing in recent years, with Russia enjoying a significant trade surplus.

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Putin orders Russian brand of ‘green’ non-GMO produce to be set up

“We are not just one of the largest exporters of wheat, last year’s exports amounted to 44 million tons. We have reached at least one more achievement,” the president said on Wednesday in his annual address to the Federal Assembly.

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He explained that “Thanks to Russian scientists, we have ensured our independence in wheat seeds. Experts will confirm how critically important that is.”

Russia’s advantage is in its huge natural resources, Putin said, adding that these resources should be used specifically to increase the production of organic, non-GMO food products.

“I instruct the government to create a protected domestic brand of environmentally friendly, green products. We should ensure that only safe for the human health technologies are used in that production.”

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Putin noted that the production should “serve as a guarantee of high quality both domestically and internationally.”

“I assure you these products will be very popular abroad because nothing of high quality is left there.”

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India ready to welcome Russian gold & diamond miners – official

“The Indian market is one of the largest in the world, annually valued at around $100 billion,” the minister told journalists after bilateral talks with his Indian counterpart in Bangalore.

According to Manturov, the parties have made a start for deep cooperation in various sectors with India interested in bringing Russian technological expertise to boost manufacturing and develop India’s domestic economy.

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“This refers to Russian companies specializing in mining of gold and diamonds. We have agreed to carry out a seminar on the issue in the near future,” the official said.

India is the second biggest gold consumer market in the world, topped only by neighboring China. The country purchases around 850 metric tons of gold annually, according to US gold and silver dealer Provident Metals. The precious metal is mostly used in India for jewelry and in ornamental sectors.

At the same time, the country boosted its bullion reserves in 2018 after nearly a nine-year pause, slashing its share of US sovereign debt at the same time.

Indian gold imports increased by 72 percent year-on-year to 879.8 tons, while total consumption increased by 30 percent to 781.9 tons, attributed to a 35-percent surge in jewelry consumption, according Gold Survey 2018, provided by Gold Fields Mineral Services, research and consultancy owned by Reuters.

When it comes to diamonds, India is the second biggest global consumer after the US. In 2018, the country bought $21.9 billion worth of gems, accounting for nearly 19 percent of the world’s total consumption, according to World’s Top Exports. Purchases from Russia were reportedly up 242 percent and totaled $2.4 billion.

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