Sberbank President German Gref, has warned the Russian Government about the major challenges for continued growth in the country.
Gref says the bank along with World Economic Forum members have outlined 12 priorities in which Russia needs change. "The top priority is the quality of work of the institutions such as, law enforcement agencies setting up the judicial system. The second priority is the infrastructure where the quality of roads, ports, railways, communication lines, electric power lines is the main focus.”To reach all the targets financial funding is important says German Gref, “Further privatisation is a good source.” However, the money from privatisation should be directed towards even more profitable projects which are sustainable. “These revenues should be invested in new investment projects. So, we will create permanent sources of tax revenues, and they can be spent for anything,” he said. Russia has almost no debts, and a minimal budget deficit, but there are some obstacles preventing steady growth such as capital outflow which explains why “we are ranked in the second hundred of countries in the figures of the investment climate,” Gref said. Despite strong support of the state budget from oil revenues the favorable situation in the oil market will not last much longer and "the positive effect of no debts and the minimal budget deficit is minimized with the dependence from the oil prices” says Gref. In this respect he added that Russias’ “third priority is macroeconomic stability.” Meanwhile the population density and demographic decline “is one more serious global challenge that we are facing,” Gref says that 2012 will be a benchmark in Russian demographic history. “we will witness a sharp decline of workers and growth in the number of pensioners. With such demographics countries rarely show a good economic growth rate.”