With the global financial crisis and ensuing economic slowdown passing its first anniversary, Business RT spoke with Aleksandr Osin, Chief Economist at Finam Management about how the Russian economy has fared.
RT: What lessons can Russia take from the experiences of the last year?
AO: Actually, the crisis has revealed the main flaws of Russia’s economy, with its main problem, excessive dependence on oil and gas export revenues, which need to be overcome. So, the most obvious conclusion the year of crisis has brought us to is the urgent need to diversify.
Furthermore, the banking system has proved to be inconsistent and inflexible in a crisis. Today authorities are trying to fight the problem through a consolidation of the banking system, i.e. reducing the number of banks and increasing their capital. I think it’s also necessary to develop the banking infrastructure, such as non commercial organizations, to reduce system risks.
RT: What Russian industries have suffered the least in a year of crisis?
AO: The energy sector and agriculture been quite ok this year. As for the former, there are virtually no questions, as this raw material will always be popular with investors. And agriculture has proved stable as the sector isn’t that dependent on credit facilities and is being basically funded by direct investment.
RT: And what sectors have been hit most heavily?
AO: Industries heavily dependent on credits, mainly the automobile industry and others connected to it, have suffered the most.
RT: When, do you think, the Russian economy will show clear signs of a rebound?
AO: I think the year 2010 will see some positive results. To be more specific, the recovery is expected at the end of the year, and our Government is taking particular steps in this direction. It is providing monetary stimulus to consumers and producers, controlling prices, giving credit guarantees to companies, and supporting the banking system with capital. I think, it will also go on increasing funding the pension system and index link salaries, which should help to fight inflation.