Russia's national economy has faced dramatic challenges in the period of recovery and structural adjustment following the 2008-2009 economic and financial crises.The current “zero growth” phase of economic development will be followed by long-term “stagflation” with capital flight and social degradation.
At the end of June a number of new faces appeared in the Government and in the Presidential Executive Office. The Economic Development Ministry got a new head, while Elvira Nabiullina took the helm of the Central Bank of Russia. All the new appointees have always strictly followed these rules in their previous positions.
It is the common wealth, or the accumulated and permanently growing public wealth that has real significance. A growing national economy as such is a factor of attraction. Broadening markets promise lucrative contracts to any economic partner.
The existing list of state-owned companies marked for privatization includes a wide range of companies in various industries which may be owned by federal, regional or municipal authorities and which also vary in the form of ownership – some are joint stock companies while others are municipal enterprises or state companies which are structurally part of government agencies. This heterogeneous lot cannot be privatized following a uniform procedure.
Russia’s economic role will more likely be to create demand for products and services produced in the EU, along with other emerging markets fulfilling their WTO commitments. To do that, Russia needs special agreements with the European Union, which effectively operates as a customs union.
Sergey Dubinin, Member of the Board, VTB Capital Investment Business VTB Group, took part in the eighth annual conference of the Valdai International Discussion Club. The theme of the conference was “The 2011-2012 Elections and the Future of Russia: Development Scenarios for the Next 5-8 Years.”
The Russian authorities have succeeded in easing the consequences of the economic and financial crisis of 2008-2009 for the population. At the same time, the crisis has exposed structural weaknesses of the Russian economy.