Curious about specifically what kinds of trade sanctions (as opposed to financial sanctions, which I covered in more depth here) might cause most harm to Russia? In other words, what does Russia most rely on from overseas, whether in terms of imports sucked into the country, and exports sent out. Here are some clues.
First, here’s what Russia exports. In each of these charts, by the way, you can see more detail if you hover your mouse over the graphic itself. Notice anything particularly glaringly dominant?
And below is where the exports go. In short: oil/gas, and Netherlands/Germany/China are by far and away the most important nodes in Russia’s trade relationship (goods trade, that is) with the rest of the world.
the main products the country imports. Here, the main import is cars, but note that the picture is far less dominated by one specific product than with its exports, which are primarily fossil-fuel-related.
And here is where those imports come from:
You might find the charts above of particular use when contemplating why particular countries are so reluctant (or indeed so open) to impose sanctions on Russia. The graphics are from this brilliant MIT project. Well worth perusing when you have an idle moment.read more
Businesses involved in handling cash and transactions in the UK are obliged to report suspicious activity to the National Crime Agency. Given how much supposedly dirty Russian money is allegedly flowing around the London property market, one might have expected estate agents to make up a large proportion of these so-called Suspicious Activity Reports (SARs). In fact, it turns out that estate agents accounted, last year, for the lowest proportion of SARs in the country.
Just came across this fantastic dataset from the OECD [xls] showing how people in different countries, and of different genders spend their time. I have no idea how reliable the data are, but there are a few interesting nuggets in there. Among them that the average South African spends more than nine hours asleep each night. The lightest sleepers are the Norwegians, at less than seven hours. Britons get just over eight hours.
Another series shows how much time we spend eating. Here, perhaps unsurprisingly, it’s the French who come out top, spending well over two hours each day eating. Britons come out lowest, spending less than an hour each day eating.
I’m sure there are plenty of other great insights in there too. Though I’ve no idea how reliable the dataset is…read more
Quantitative easing is five years old today. Over the course of that time, monetary policy in the United Kingdom has changed beyond all recognition. The reason why is summed up in the chart below. Back in the pre-QE days, the majority of UK government debt was owned by insurance companies and pension funds.
Today, the biggest single owner of UK Government debt is the Bank of England. To put it another way, since 2009 the Government has issued around £750bn of debt (this has been a very expensive recession). The Bank of England’s holdings are equivalent to about half of that.
These are staggeringly large sums. Quantitative easing is a staggeringly large policy. And yet because it is deeply complex, because the assets being bought by the Bank are more-or-less invisible, the scale and significance of the scheme is often lost on us. I’ve tried, occasionally, to sketch out just how enormous it has been (for instance, it could have put a man on the moon; or bought every single property in Scotland), but I suspect the importance of this policy still has yet to sink in.
However, as with all sizeable economic policies, QE is having significant economic and social consequences. Among the most important is the fact that, even by the Bank’s own calculations, QE has made the rich considerably richer. This has happened through a variety of channels. One is rather simple: QE tends to increase the value of assets, so those who already have assets see the value of those assets going up, whether they are shares or properties.
By the same token, the extra cash pumped into the economy has, by most estimates, meant that unemployment is lower than it would otherwise have been.
It has also been responsible for a major redistribution of wealth from savers to borrowers. Those who put aside money before the crisis, presuming that was the sensible course of action (encouraged, for that matter, by politicians and policymakers) have suffered substantially as a result of QE and rock-bottom interest rates.
All the same, we are apt to overlook the significant economic effects of monetary policy in recent years, in part because the Bank of England is independent rather than political, in part because we prefer to blame the Government for most things. Even the politicians themselves overlook it. Ed Miliband blames David Cameron for the cost of living crisis. David Cameron blames Labour, who were in office when it really began. But neither of them ever seems to mention the fact that what’s happened to wages, prices and assets is influenced far more by monetary policy than by anything the politicians are capable of.
So for the avoidance of doubt, let me put it as clearly as possible: quantitative easing was a necessary intervention. It helped Britain avoid a Great Depression-style collapse. However, this enormous economic policy came with enormous unintended consequences. It is likely to exacerbate inequalities of wealth more than almost any other policy in recent history. At some point, politicians will have to address this – most likely through fiscal (eg tax and spend) policy. But so far none of them seems capable of even diagnosing the issue, let alone suggest any solutions.read more