Research & Insights #1

De-dollarization. Russia continues to de-dollarize its economy. The share of the country’s exports sold in US dollars fell below the symbolic 50% mark for the first time in Q4 2020. According to Central Bank data, 61% of exports were denominated in dollars at the end of 2019, compared to 48% at the end of 2020. The decline is mainly due to Russia’s trade with China, three quarters of which is now in euros. Economic sanctions put in place by Washington are prompting Moscow to limit the use of the greenback as much as possible. The shift away from dollar trade with China accelerated in 2019, when oil major Rosneft PJSC switched crude export contracts to euros. The central bank also reduced its holdings of treasury bills in its foreign reserves, replacing them with gold and euros.

History. On May 9, 2021, Moscow celebrated the 76th anniversary of victory over Nazi Germany in World War II. With more than 25 million dead, the USSR contributed greatly to the defeat of Nazi Germany. In recent years, Vladimir Putin has regularly accused the West of anti-Russian, historical “revisionism” by seeking to minimize the role of the USSR in the defeat of Adolf Hitler. In France, it is interesting to note that there has been a spectacular shift in public opinion on this historical issue. A survey conducted in 1945, 1994 and 2015, asked the French which country had contributed most to the German defeat. In 1945, a majority answered the USSR (57%), followed by the United States (20%) and England (12%). In 2015, 54% of French people consider that the United States was the nation that contributed the most to the German defeat, followed by the USSR (24%) and England (18%).

Oil & Gas. In a recent interview for Energy Policy magazine, Energy Minister Nikolai Shulginov stressed the importance that hydrocarbon energy will continue to play in the next 15 years. “It is not correct to think about abandoning oil exports. There is no need to rush to part with hydrocarbons, rather, it is necessary to develop renewable energy sources along with traditional types of energy,” he said. “It is not worth relying only on the sun and wind without newly-developed energy storage systems. This implies the need to constantly maintain a reserve of traditional generation capacities and reserves of traditional fuels,” he explained. He sees the competition between oil, pipeline gas and liquefied natural gas as opportunities that should be taken advantage of. He also called for nuclear power to be officially considered carbon neutral.

Covid-19. The Gamaleya National Research Center of Epidemiology and Microbiology, and the Russian Direct Investment Fund (RDIF), have announced that the Russian Ministry of Health has approved the Covid-19 Sputnik Light vaccine for use in the country. According to Kirill Dmitriev, CEO of RDIF, the Sputnik Light vaccine significantly reduces the possibility of severe cases leading to hospitalization, with only one injection required. According to Russian authorities, the Sputnik Light vaccine showed an efficacy of 79.4%, 28 days after administration of the shot. It should be noted that such a level of efficacy is higher than that of most existing two-dose vaccines. Sputnik Light was registered in Russia on May 6 and is expected to be marketed in one month for less than $10 per dose.

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