Nothing to see here. Russia’s state statistics agency, Rosstat, will stop sharing details on Russian real incomes. According to Rosstat, the agency currently has access to only poor or scarce data to calculate that figure, so it’s switching to a new methodology. That doesn’t explain, however, why the agency is taking down all of the existing data. The Russian government may be concerned that real wages are low and growing too slowly to meet the cost of living, and Moscow may believe that publishing the data would be politically risky. Indeed, we anticipated that there would be more social unrest in Russia in 2019, primarily because of a decline in standards of living driven by factors like lower wages and higher taxes.

Russia’s answer to SWIFT. Moscow is touting a Russian alternative to the Belgium-based SWIFT system, which is used for transferring funds around the world. Russia fears that it could be cut off from the system, like Iran was in 2012, limiting its access to global financial markets. The Russian system is not new – development began in 2014 – but Moscow is now in talks with China, India, Iran and Turkey in an attempt to get more trade partners to join the system. This would, to some degree, lessen the United States’ ability to intervene in Russia’s economic affairs. The head of the Russian Banking Association claims that there are currently more than 400 (mostly Russian) companies in its new system.

Moving money to a different corridor. Pakistan is diverting small amounts of funds intended for the China-Pakistan Economic Corridor to other projects. Around $172 million initially earmarked for the joint infrastructure initiative has been reallocated to other infrastructure and construction projects. (CPEC originally cost $62 billion, although revised figures indicate that the total package is now closer to $54 billion.) The reason for the diversion is unclear. It could be pure domestic politics – appeasing legislators by letting them make decisions about development projects. Or the government may simply be capital constrained. Either way, China has not yet responded to the diversion, indicating that the sums being discussed are not worth making a fuss over – yet.

Honorable Mentions

  • The U.S. and China will hold another round of trade talks in Beijing next week, and Vice Premier Liu He will visit Washington the following week.
  • The U.S. and Brazil agreed to lower tariffs on wheat and beef.
  • The Collective Security Treaty Organization – which includes Russia, Armenia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan – has announced a new counterterrorism operation, dubbed Operation Mercenary, which will take place within member states.
  • The U.S. extended a sanctions waiver to Iraq, so it can continue purchasing energy from Iran.
  • Pakistan is planning to erect a border fence with Iran to limit the incursion of Pakistan-based jihadist groups into Iran. The announcement comes after a number of cross-border terror attacks in southeast Iran, near its border with Pakistan.
  • Saudi Arabia announced that it will invest $23 billion to improve “quality of life” in Riyadh.