Economy

The Reasons For Russia's Trade Woes Are Stowed Inside That DHL Package

DHL trucks in Moscow
DHL trucks in Moscow
ppz
Kirill Zhurenkov, Sergei Melnikov, Olga Filina

MOSCOW - There are four global logistics companies (DHL, FedEx, UPS and TNT) that are generally considered barometers of the global economy. They told of a crisis before it had engulfed the world, when international exchanges began to lag as trade was slowing down, and the price of shipping packages became cheaper.

That’s why economists are interested in these companies. And a study done by DHL last year has caught the attention of a lot of experts around the world: an index of global integration, showing which countries were open to globalization and which ones were closing in on themselves. The index took into account not only economic factors such as the movement of capital, but also non-economic factors, such as the quality of Internet connections, the number of international phone calls and the number of immigrants and international students.

It was a view into globalization from a, well, global point of view.

The most recent edition of the index came out just recently. It shows that global integration is not more than 20 percent for most countries in most categories, and that the difference between well-integrated and more isolated countries is wide. The Netherlands, considered the most integrated country, scored 88% integration on the index, while Burundi, the lowest, ranked 10. According to the study’s authors, that means that fears over globalization are probably exaggerated.

Russia, already low, dropped two places in the rating compared with last year, falling to 68th place in 2012. Russia isn’t able to break into the world's leadership in globalization not only because of a weak economy, but also because of bureaucracy, which can especially be a problem for logistics companies like DHL.

Off the grid

The study reports that major logistics companies complain about problems with the Russian customs systems, and the requirement that they gather hundreds of documents to transport even the most simple, everyday goods. This helps explain why in Russia global integration has been fueled primarily by private individuals who want to buy goods overseas and communicate with the rest of the world.

“Of course, the level of globalization in any country comes from the intensity of the country’s commercial and business contact,” explained John Pearson, general director of DHL Express in Europe. “But the sum of all private packages is also considered. In Russia’s case, that is fair. Russia’s e-commerce is very active, and people buy household items and clothes from overseas. Ahead of the holidays the private international packages send to Russia increases, which means that Russians buy gifts from overseas.”

But Russian experts say that if the country doesn’t solve its infrastructure problems, it is not going to be able to get around the problems with integration on a national level.

Anatoli Fedorenko, head of the department of logistical infrastructure at the National Research University, notes that the World Bank surveys rank Russia 138th in terms of the functioning of the customs service. "We’re 83rd in terms of the railroad system. For comparison, Ukraine and the Baltic states are close to the top of those lists,” said Fedorenko.

One problem leads to another - the low speeds required for commercial traffic on Russian roads means international road shipments comparable with Soviet times. There is also a technical problem: The railroads in Russia are slightly wider than European railroads, so European trains can’t run on Russian tracks, and train cargo has to be transferred from one type to the other in Belarus. The good news, though, is that recently a new project to extend “Russian” rails to Vienna was approved, as well as the construction of a special center in Vienna designed to transfer rail cargo from one type of train to the other.

“It’s easier in Europe - it’s united. But logitistics is also closely related to the economy," Fedorenko explains. "As long as we are sending raw materials to Europe, we only need pipelines, shiplines and railroads. And they’ll be building other things, too, like new roads and air cargo centers.”

Still, there is yet another connection that Russia is not doing so well with. According to DHL, the average Internet connection speed in Russia was 32 bytes per second, compared to 163 bytes per second in the Netherlands. Here, you can feel the difference.

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Queen Elizabeth II with UK PM Boris Johnson at a reception at Windsor Castle yesterday

Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

👋 Hej!*

Welcome to Wednesday, where chaos hits Syria, Brazilian president Jair Bolsonaro is accused of crimes against humanity and a social media giant plans to rebrand itself. For Spanish daily La Razon, reporter Paco Rodríguez takes us to the devastated town of Belchite, where visitors are reporting paranormal phenomenons.

[*Danish]

🌎  7 THINGS TO KNOW RIGHT NOW

• Syrian violence erupts: Army shelling on residential areas of the rebel-held region of northwestern Syria killed 13 people, with school children among the victims. The attack occurred shortly after a bombing killed at least 14 military personnel in Damascus. In central Syria, a blast inside an ammunition depot kills five soldiers.

• Renewed Ethiopia air raids on capital of embattled Tigray region: Ethiopian federal government forces have launched its second air strike this week on the capital of the northern Tigray. The air raids mark a sharp escalation in the near-year-old conflict between the government forces and the Tigrayan People's Liberation Front (TPLF) that killed thousands and displaced over 2 million people.

• Bolsonaro accused of crimes against humanity: A leaked draft government report concludes that Brazilian President Jair Bolsonaro should be charged with crimes against humanity, forging documents and incitement to crime, following his handling of the country's COVID-19 pandemic. The report blames Bolsonaro's administration for more than half of Brazil's 600,000 coronavirus deaths.

• Kidnappers in Haiti demand $17 million to free a missionary group: A Haitian gang that kidnapped 17 members of a Christian aid group, including five children, demanded $1million ransom per person. Most of those being held are Americans; one is Canadian.

• Putin bows out of COP26 in Glasgow: Russian President Vladimir Putin will not fly to Glasgow to attend the COP26 climate summit. A setback for host Britain's hopes of getting support from major powers for a more radical plan to tackle climate change.

• Queen Elizabeth II cancels trip over health concerns: The 95-year-old British monarch has cancelled a visit to Northern Ireland after she was advised by her doctors to rest for the next few days. Buckingham Palace assured the queen, who attended public events yesterday, was "in good spirits."

• A new name for Facebook? According to a report by The Verge website, Mark Zuckerberg's social media giant is planning on changing the company's name next week, to reflect its focus on building the "metaverse," a virtual reality version of the internet.

🗞️  FRONT PAGE

"Oil price rise causes earthquake," titles Portuguese daily Jornal I as surging demand coupled with supply shortage have driven oil prices to seven-year highs at more than $80 per barrel.

#️⃣  BY THE NUMBERS

98

For the first time women judges have been appointed to Egypt's State Council, one of the country's main judicial bodies. The council's chief judge, Mohammed Hossam el-Din, welcomed the 98 new judges in a celebratory event in Cairo. Since its inception in 1946, the State Council has been exclusively male and until now actively rejected female applicants.

📰  STORY OF THE DAY

Spanish civil war town now a paranormal attraction

Ghosts from Spain's murderous 1930s civil war are said to roam the ruins of Belchite outside Zaragoza. Tourists are intrigued and can book a special visit to the town, reports Paco Rodríguez in Madrid-based daily La Razon.

🏚️ Between August 24 and September 6, 1937, during the Spanish Civil War, more than 5,000 people died in 14 days of intense fighting in Belchite in north-eastern Spain, and the town was flattened. The fighting began on the outskirts and ended in house-to-house fighting. Almost half the town's 3,100 residents died in the struggle. The war annihilated centuries of village history. The town was never rebuilt, though a Pueblo Nuevo (or new town) was built by the old one.

😱 Belchite became an open-air museum of the horror of the civil war of 1936-39, which left 300,000 dead and wounds that have yet to heal or, for some today, mustn't. For many locals, the battle of Belchite has yet to end, judging by reports of paranormal incidents. Some insist they have heard the screams of falling soldiers, while others say the Count of Belchite wanders the streets, unable to find a resting place after his corpse was exhumed.

🎟️ Ordinary visitors have encountered unusual situations. Currently, you can only visit Belchite at set times every day, with prior booking. More daring visitors can also visit at 10 p.m. on weekends. Your ticket does not include a guaranteed paranormal experience, but many visitors insist strange things have happened to them. These include sudden changes of temperature or the strange feeling of being observed from a street corner or a window. Furthermore, such phenomena increase as evening falls, as if night brought the devastated town to life.

➡️ Read more on Worldcrunch.com

📣 VERBATIM

We still cling to the past because back then we had security, which is the main thing that's missing in Libya today.

— Fethi al-Ahmar, an engineer living in the Libyan desert town Bani Walid, told AFP, as the country today marks the 10-year anniversary of the death of dictator Muammar Gaddafi. The leader who had reigned for 42 years over Libya was toppled in a revolt inspired by the Arab Spring uprisings and later killed by rebels. Some hope the presidential elections set in December can help the country turn the page on a decade of chaos and instability.

🇮🇷🎓  IN OTHER NEWS

Iran to offer Master's and PhD in morality enforcement

Iran will create new "master's and doctorate" programs to train state morality agents checking on people's public conduct and attire, according to several Persian-language news sources.

Mehran Samadi, a senior official of the Headquarters to Enjoin Virtues and Proscribe Vices (Amr-e be ma'ruf va nahy az monkar) said "anyone who wants to enjoin virtues must have the knowledge," the London-based broadcaster Iran International reported, citing reports from Iran.

The morality patrols, in force since the 1979 revolution, tend to focus mostly on young people and women, particularly the public appearance for the latter. Loose headscarves will send women straight to a police station, often in humiliating conditions. Five years ago, the regime announced a new force of some 7,000 additional agents checking on women's hijabs and other standards of dress and behavior.

Last week, for example, Tehran police revealed that they had "disciplined" agents who had been filmed forcefully shoving a girl into a van. Such incidents may increase under the new, conservative president, Ibrahim Raisi.

Speaking about the new academic discipline, Samadi said morals go "much further than headscarves and modesty," and those earning graduate degrees would teach agents "what the priorities are."

Iran's Islamic regime, under the guidance of Shia jurists, continuously fine tunes notions of "proper" conduct — and calibrates its own, interventionist authority. More recently the traffic police chief said women were not allowed to ride motorbikes, and "would be stopped," Prague-based Radio Farda reported.

Days before, a cleric in the holy city of Qom in central Iran insisted that people must be vaccinated by a medic of the same sex "as often as possible," and if not, there should be no pictures of mixed-sex vaccinations.

✍️ Newsletter by Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

Thoughts on Facebook's new name? Zuckerverse? Tell us how the news look in your corner of the world: Drop us a note at info@worldcrunch.com!

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