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Newsmakers

State Duma Approves Putin’s Pension Proposals

Measure’s third and final lower house reading to be held today.

By Chris Butera

Russia’s lower house of parliament approved President Vladimir Putin’s controversial pension reforms Tuesday, in the second of three readings.

Although Putin’s nine amendments are softer than the original changes the State Duma passed in June, they have not quelled public outcry.

The original measure would gradually raise the retirement ages to 65 from 60 for men and to 63 from 55 for women. Then came an enormous public backlash, with demonstrations.  The result was Putin’s August revisions that reduced the age for women to 60 by 2034, but leaves the new male retirement age alone. That will fully take effect by 2028.

Putin softened the blow by adding some protections for Russians losing out on the retirement eligibility shift: those who now find themselves five years away from the new retirement ages—meaning men who lost the ability to retire at 60 and women at 55. 

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This group can claim higher unemployment benefits and they also receive employment guarantees. The government will punish companies for firing or refusing to hire the elderly without good reason. The State Duma passed these changes as well, adding the penalties to the criminal code.

The changes are being made to shore up Russia’s economy, but many remain unhappy nevertheless. That’s because the average Russian life expectancy is 66 for men and 77 for women. Constant protests have occurred since June, and Putin, who had been promising that there would be no pension reforms under his watch since 2005, has seen his approval ratings plummet.

In addition to social unrest, the measures have even sparked temporary allegiances between opposing political parties, such as the Communist Party of the Russian Federation and the People’s National Party. Another protest was held outside of parliament’s headquarters during the second reading.

Today will be the bill’s third and final Duma reading. If it passes there, it goes to the upper house, and then Putin’s desk.

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Home > News > Market Moves > US Will Be Victor in Trade War, El-Erian Says
Market Moves

US Will Be Victor in Trade War, El-Erian Says

Allianz economist says American economy and stock market shouldn’t be hurt by the conflict.

By Larry Light

The escalating American-Chinese trade war won’t harm the global economy or the stock market, and the US will win it, according to economist Mohamed El-Erian.

The chief economic advisor to European financial services giant Allianz, El-Erian said in a recent CNBC appearance that Beijing eventually will realize the “US will win this war.”

“As long as the US is willing to incur damage, which it is, then ultimately it makes sense for others to provide concession,” he said. “We’ve seen this with Mexico. We’ve seen this with Korea. We’re going to see it with Canada and China; we’ll see it down the road.”

President Donald Trump has slapped huge tariffs on China, which he castigates for stealing American jobs and intellectual property, and the Chinese have retaliated in kind. A trade war, the president has said, is “easy to win.”

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Many have pointed out that the US has an advantage: It imports much more from China, thus making Beijing more vulnerable to onerous duties on their goods. China shipped $505 billion to America last year, and the US sent the Chinese just $130 billion.

At this point, the impact on Americans has been minimal, contained to the farming sector, such as soybean growers. The next round could end up jacking up prices to US consumers of items ranging from electronics to housewares to clothing.

Meanwhile, US investors have largely shrugged off any threat to stocks, although Chinese ones appear worried. Since the trade tiff began in earnest in June, the S&P 500 has risen some 7%. The Shanghai exchange, on the other hand, is off almost 10% since then.

The Sino-American conflict, El-Erian said, will “get worse before it gets better.” But he didn’t think that the problem will spread elsewhere. “All this rhetoric you hear from both sides,” he added, “it’s about the journey, not the destination. The destination, in my opinion, will not be global trade war.”

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