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| Thanks to Sanctions, Russia Is Cushioned From Virus’s Economic Shocks | Thanks to Sanctions, Russia Is Cushioned From Virus’s Economic Shocks |
| (6 days later) | |
| MOSCOW — Six years ago, the United States and the European Union slammed the door on Western bank loans for Russian companies, starving the country’s oil and banking industries of financing. The harsh measure, and others that followed, were intended to punish Russia for military interventions in Ukraine and Syria and for meddling in the 2016 American election to help Donald J. Trump. | MOSCOW — Six years ago, the United States and the European Union slammed the door on Western bank loans for Russian companies, starving the country’s oil and banking industries of financing. The harsh measure, and others that followed, were intended to punish Russia for military interventions in Ukraine and Syria and for meddling in the 2016 American election to help Donald J. Trump. |
| Paradoxically, however, those sanctions and the policies Russia enacted in response prepared the Kremlin for what came this month: a universal dislocation of the global economy from the coronavirus pandemic and an oil price war that led to a collapse in oil prices and the revenues that Russia relies upon to support social spending. | Paradoxically, however, those sanctions and the policies Russia enacted in response prepared the Kremlin for what came this month: a universal dislocation of the global economy from the coronavirus pandemic and an oil price war that led to a collapse in oil prices and the revenues that Russia relies upon to support social spending. |
| Far from being a basket case, Russia enters the crisis with bulging financial reserves, its big companies nearly free of debt and all but self-sufficient in agriculture. After Russia was hit with the sanctions, President Vladimir V. Putin’s government and companies adapted to isolation and were virtually forced to prepare for economic shocks like the one hammering the global economy today. | Far from being a basket case, Russia enters the crisis with bulging financial reserves, its big companies nearly free of debt and all but self-sufficient in agriculture. After Russia was hit with the sanctions, President Vladimir V. Putin’s government and companies adapted to isolation and were virtually forced to prepare for economic shocks like the one hammering the global economy today. |
| “Russia will be a bit better off than other countries because of its experience, because of sanctions and because of reserves,” said Vladimir V. Tikhomirov, chief economist for BCS Global Markets, referring to the roughly $600 billion in gold and hard currency reserves the country has amassed. | “Russia will be a bit better off than other countries because of its experience, because of sanctions and because of reserves,” said Vladimir V. Tikhomirov, chief economist for BCS Global Markets, referring to the roughly $600 billion in gold and hard currency reserves the country has amassed. |
| To be sure, Russia has taken a hard hit from the collapse of oil prices, with the national currency, the ruble, losing about 20 percent of its value in recent weeks. Oil and natural gas account for about 60 percent of Russia’s exports. | To be sure, Russia has taken a hard hit from the collapse of oil prices, with the national currency, the ruble, losing about 20 percent of its value in recent weeks. Oil and natural gas account for about 60 percent of Russia’s exports. |
| It is still too early to predict how outbreaks of the virus will spread and how various governments will respond. Given the state of Russia’s ramshackle and underfunded health care system, the coronavirus outbreak could be catastrophic. With the state’s tight grip on the news media, many Russians suspect that the Kremlin could be hiding the scale of the problem or the extent of preparedness, hampering an effective response. | It is still too early to predict how outbreaks of the virus will spread and how various governments will respond. Given the state of Russia’s ramshackle and underfunded health care system, the coronavirus outbreak could be catastrophic. With the state’s tight grip on the news media, many Russians suspect that the Kremlin could be hiding the scale of the problem or the extent of preparedness, hampering an effective response. |
| Still, some countries, Russia among them, seem better positioned than others. For Russia, that is linked to the Western sanctions. | Still, some countries, Russia among them, seem better positioned than others. For Russia, that is linked to the Western sanctions. |
| Take, for example, a 2014 sanction limiting loans from Western financial institutions to a maximum of three months. Russian companies responded by paying down their debt so that total government and corporate foreign debt in Russia fell to $455 billion at the start of this year from $713 billion in 2014. By contrast, Western companies have taken advantage of low interest rates to run up trillions of dollars in debt in the past decade. | Take, for example, a 2014 sanction limiting loans from Western financial institutions to a maximum of three months. Russian companies responded by paying down their debt so that total government and corporate foreign debt in Russia fell to $455 billion at the start of this year from $713 billion in 2014. By contrast, Western companies have taken advantage of low interest rates to run up trillions of dollars in debt in the past decade. |
| “Russia over the past six years has been living with a hostile foreign environment because of sanctions,” said Mr. Tikhomirov. When the virus threat passes, he said, “it’s possible things will come back to life faster in Russia than in other countries because there won’t be the negative drag of debt.” | “Russia over the past six years has been living with a hostile foreign environment because of sanctions,” said Mr. Tikhomirov. When the virus threat passes, he said, “it’s possible things will come back to life faster in Russia than in other countries because there won’t be the negative drag of debt.” |
| The Russian government on Thursday published its plan to contain the virus and maintain economic activity. It said that all pneumonia patients would now be tested and that the country was making 100,000 test kits a day. | The Russian government on Thursday published its plan to contain the virus and maintain economic activity. It said that all pneumonia patients would now be tested and that the country was making 100,000 test kits a day. |
| The plan revised rules for paid sick leave so that companies must pay an advance when an employee goes on leave. It will dip into the National Welfare Fund, the main sovereign wealth fund, to pay bonuses to medical workers. | The plan revised rules for paid sick leave so that companies must pay an advance when an employee goes on leave. It will dip into the National Welfare Fund, the main sovereign wealth fund, to pay bonuses to medical workers. |
| Russia has 55,000 hospital beds available to treat coronavirus patients and 40,000 ventilators, which are critical in treating the sickest patients, the statement said. By Friday, Russia had reported 199 cases of Covid-19, the disease caused by the virus. | Russia has 55,000 hospital beds available to treat coronavirus patients and 40,000 ventilators, which are critical in treating the sickest patients, the statement said. By Friday, Russia had reported 199 cases of Covid-19, the disease caused by the virus. |
| For now, Russia is relying on quarantines of individuals and contact tracking without major lockdowns. But measures to halt the virus’s spread will most likely bring Russia’s economy to a halt, as they have elsewhere, as companies send employees home. At that point, Russia’s treasure chest of hard currency will be of little help. | For now, Russia is relying on quarantines of individuals and contact tracking without major lockdowns. But measures to halt the virus’s spread will most likely bring Russia’s economy to a halt, as they have elsewhere, as companies send employees home. At that point, Russia’s treasure chest of hard currency will be of little help. |
| The reserves will come into play during a recovery, though, as Russia will not be competing for financing from capital markets to stimulate the economy. | The reserves will come into play during a recovery, though, as Russia will not be competing for financing from capital markets to stimulate the economy. |
| For years, economists criticized Russian economic policy as overly conservative, emphasizing saving over spending. It seemed to reflect a deep-seated Russian belief: No matter how bad things are today, they can always get worse. Now, that policy looks justified, particularly in view of the country’s reliance on natural resource extraction for most of its hard currency earnings. | For years, economists criticized Russian economic policy as overly conservative, emphasizing saving over spending. It seemed to reflect a deep-seated Russian belief: No matter how bad things are today, they can always get worse. Now, that policy looks justified, particularly in view of the country’s reliance on natural resource extraction for most of its hard currency earnings. |
| Updated June 22, 2020 | |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| “Russia is more ready than ever before in its history,” said Vladimir Osakovsky, the chief Russia economist at the Bank of America, referring to the economic fallout from the virus’s spread. | “Russia is more ready than ever before in its history,” said Vladimir Osakovsky, the chief Russia economist at the Bank of America, referring to the economic fallout from the virus’s spread. |
| Russia built those reserves throughout the sanctions period by writing into its budget an artificially low estimate for the global price of oil. All tax on profits above that level went into the national piggy bank. The policy starved the economy of investment — the gross domestic product grew at 1.3 percent last year — but put Russia in a solid position entering the coronavirus crisis. | Russia built those reserves throughout the sanctions period by writing into its budget an artificially low estimate for the global price of oil. All tax on profits above that level went into the national piggy bank. The policy starved the economy of investment — the gross domestic product grew at 1.3 percent last year — but put Russia in a solid position entering the coronavirus crisis. |
| Russia’s agricultural sector is also benefiting from changes introduced after sanctions on food imports. Before European agricultural products fell victim to the sanctions war, for example, Koza Nostra, a small company making gourmet cheese, was a barely viable family enterprise. But after sanctions cut off French cheese imports, the company doubled and then tripled its output in ensuing years. | Russia’s agricultural sector is also benefiting from changes introduced after sanctions on food imports. Before European agricultural products fell victim to the sanctions war, for example, Koza Nostra, a small company making gourmet cheese, was a barely viable family enterprise. But after sanctions cut off French cheese imports, the company doubled and then tripled its output in ensuing years. |
| “It was the right approach,” the general director, Aleksandr Asatryan, said of the Kremlin’s move to prop up Russian agriculture in response to sanctions, useful today as insulation against trade disruptions. | “It was the right approach,” the general director, Aleksandr Asatryan, said of the Kremlin’s move to prop up Russian agriculture in response to sanctions, useful today as insulation against trade disruptions. |
| Since 2014, the share of imported food on the Russian market has fallen to about 10 percent today from about 25 percent. Russia is self-sufficient for most staples other than fresh fruits and vegetables. More than guaranteeing nutrition, the shift allows the government to reserve its hard currency for a recovery rather than expend it propping up the ruble to keep imported food affordable. | Since 2014, the share of imported food on the Russian market has fallen to about 10 percent today from about 25 percent. Russia is self-sufficient for most staples other than fresh fruits and vegetables. More than guaranteeing nutrition, the shift allows the government to reserve its hard currency for a recovery rather than expend it propping up the ruble to keep imported food affordable. |
| “Even in a bad scenario, Russia can survive this shock better than many other economies,” said Sofya Donets, an economist at Renaissance, a Moscow investment bank, who returned to work last week after a mandatory quarantine. | “Even in a bad scenario, Russia can survive this shock better than many other economies,” said Sofya Donets, an economist at Renaissance, a Moscow investment bank, who returned to work last week after a mandatory quarantine. |