Main topic: The resilience of Ukraine's tech startup ecosystem amidst the country's war with Russia.
Key points:
1. Despite the challenges caused by the war, Ukrainian startups have shown resilience and earned $6bn in revenue in 2022.
2. The Ukrainian government and private investors worldwide have provided substantial support and investment to the startup ecosystem.
3. Ukrainian startup delegations have traveled to international events, such as the Mobile World Congress, to showcase their talent and attract investors.
### Summary
The Russian stock market's recent gains are a facade and the country's economy is in decline, according to Yale researchers. Russia's frozen foreign assets and the depreciation of the ruble have artificially inflated stock market profits. Additionally, the economy is suffering from a loss of confidence, with people and money fleeing to neighboring countries.
### Facts
- 📉 The Russian stock market's recent gains are an illusion, masking the true state of the country's struggling economy.
- 🧊 Russia has frozen inflows and outflows of foreign assets, preventing investors from cashing out and propping up the stock market.
- 💸 The depreciation of the ruble has artificially inflated the value of Russian stocks, as the country's commodities are sold in foreign currencies.
- 💼 Workers, academics, and oligarchs are leaving Russia, taking with them technical and intellectual capital essential to the country's economy.
- 💔 Trust in President Vladimir Putin and confidence in the Russian economy have eroded, leading to a lack of domestic and foreign investment.
- 🌍 Neighboring countries like Armenia, Georgia, and Kyrgyzstan have become destinations for Russian money and talent fleeing the country.
- 📉 Experts warn that Russia's economy could continue to decline and the country may even become a failed state if the costly war in Ukraine persists.
### Summary
Russia's currency, the ruble, has plunged to a 16-month low, leading to surging prices of sushi due to the country's economic challenges and rift with the West.
### Facts
- 💰 Russia's currency, the ruble, hit a 16-month low last week, as the country's current account suffers from Western sanctions.
- 🍣 Local prices of sushi in Russia are expected to surge by as much as 30% in the coming weeks due to the weakened ruble and strained relations with the West.
- 📈 Russia's official inflation rate reached a five-month high of 4.3% in July, but some economists estimate it to be over 60%.
- 🍱 Restaurateurs in Russia are already facing increased costs of sushi ingredients, such as rice, fish, and seaweed, which are imported and dependent on the dollar exchange rate.
- 💸 The embattled ruble sank past 100 to the dollar, prompting the Russian central bank to raise interest rates significantly.
- 📉 Capital outflows, reduced reliance on Russian oil by European nations, and falling export revenues have added to Russia's economic challenges.
- 🇷🇺 President Vladimir Putin held an emergency meeting to discuss measures for stabilizing the exchange rate, including export restrictions and limits on foreign currency movement.
Russia's stock market is performing well on the surface, but experts believe it is an illusion meant to hide the declining state of Russia's economy, which is likely to continue suffering as long as President Putin remains in power.
Russian President Vladimir Putin stated at the BRICS Summit that the decline in the global role of the US dollar is an irreversible process, emphasizing the bloc's de-dollarization efforts.
Russian President Vladimir Putin has acknowledged the rising risks of inflation and has urged the government and central bank to keep the situation under control, as soaring prices could pose a threat to living standards and his upcoming re-election bid, while Russia's budget is also strained due to its military operation in Ukraine.
The Russian economy is facing several major issues, including a labor shortage, soaring inflation, a tumbling ruble, the risk of recession, a real estate bubble, and the nationalization of foreign businesses, which could lead to stagnation and a fall in GDP growth in the long term.
The West needs to increase pressure on Russia's economy by intensifying sanctions and implementing stricter controls on Russian exports, oil price caps, and financial transactions, while also uncovering hidden stashes of money and putting Russia under a full financial embargo.
Russian President Vladimir Putin acknowledged that inflation in Russia has made it nearly impossible for businesses in the country to plan, but he brushed off longer-term concerns, stating that the problems are not "insurmountable."
The Central Bank of Russia has raised its key lending rate to 13% in an effort to combat inflation and stabilize the struggling ruble, which has weakened significantly against the dollar due to decreased exports and increased imports. The country also faces challenges with low unemployment and a brain drain of talent to other former Soviet states. However, the Russian government remains optimistic about economic growth forecasts for 2023.
The Chief of Defence Intelligence of Ukraine believes that if the war of aggression against Ukraine continues, the Russian economy will only hold out until 2025 and their arms supply will dry up in 2026 or earlier.
Despite facing Western sanctions, Russia has managed to sustain its economy through increased military spending, but questions remain about the long-term viability of this militarization.
Russian billionaire Oleg Deripaska believes that the economy has not collapsed as much as he initially predicted under the weight of Western sanctions in response to Russia's expansion in Ukraine, and argues that countries like China and India are reluctant to sever economic ties with Russia due to their own practical reasons and need for Russian resources. Additionally, Deripaska suggests that Russia is content to maintain the status quo in the conflict, rather than escalate it further.
Russia's economy is expected to grow by 1.5% this year, defying previous projections of contraction and proving more resilient than expected to Western sanctions due to rising oil prices and new export markets, though an eventual slowdown is still predicted.
The Russian rouble's decline is causing tensions between the central bank and finance ministry, as inflation rises and growth slows, threatening the country's ability to wage war effectively.
Russia's economy is being increasingly structured around war, with nearly one-third of the country's spending next year devoted to defense, redirecting funds from sectors like health care and education; however, the economic impacts of the war, including inflation and a weakened ruble, are causing concerns for citizens and the government alike.
Russia has reintroduced some capital controls in an effort to stabilize the ruble as the cost of war with Ukraine continues to impact the economy, with the currency gaining 3.4% after Moscow announced exporters would be forced to convert foreign revenues into rubles. These controls are similar to those implemented in 2022 after the start of the conflict, where Russia ordered exporters to swap 80% of their foreign currency revenues for rubles and banned residents from making bank transfers outside of Russia. The ruble has lost over a third of its value against the dollar this year due to the war and declining revenue from the energy industry.
Russia's rouble strengthens as Moscow imposes capital controls to stabilize the currency, similar to measures taken after the invasion of Ukraine in 2022, but experts warn that the rouble may weaken again in the future.