KEY CONCLUSIONS
Russian economy’s dependency on oil prices is going down
“Russia needed the oil prices to be at 110 USD per barrel in 2014. After the past 5 years the price settled around 40 USD per barrel. What other country can go through a transformation like that in such a short time?” Maxim Oreshkin, Minister of Economic Development of the Russian Federation
“Growth shouldn’t come from oil, it should come from other sectors. Last year processing industry showed +7% of investment, there should be room to grow. Agriculture showed +5%, there should be room to grow. I’m talking about service industry, new technologies” Maxim Oreshkin, Minister of Economic Development of the Russian Federation
Macroeconomic stability is an important economic growth factor
“Russia managed to survive the crisis period and create an image of a stable economy. There are healthy elements that help attract investment: federal budget surplus <…> highly disciplined implementation of budget policy and monetary policy… <…> Conservative policy that is aiming towards stability is a serious advantage compared to other growing countries” Stephanie Flanders, Senior Executive Editor for Economics, Bloomberg; Head, Bloomberg Economics
Russia is keen on making environmental policy part of its economy
“Russia is more active in reducing CO2 emissions than most other countries in the world <…> Russia will play its role so that the economic growth is as environmentally friendly as possible” Maxim Oreshkin, Minister of Economic Development of the Russian Federation
“Business needs help in raising its environmental standards. As a regulator, Bank of Russia is working to make green financing tools are more accessible” Elvira Nabiullina, Governor, The Central Bank of the Russian Federation (Bank of Russia)
PROBLEMS
Economic growth remains slow
“Indeed it is a low tempo: 0.5% in the first quarter” Anton Siluanov, First Deputy Prime Minister of the Russian Federation – Minister of Finance of the Russian Federation
“In the coming years or growth potential is 2% tops or even less <…> because we don’t enforce structural change and don’t strengthen our institutions” Alexey Kudrin, Chairman, Accounts Chamber of the Russian Federation
Weak institutions and lacking rule of law
“Over 55% of our business people don’t trust our judicial system, while 2/3 believe it be biased and lacking independence. <…> We have weak institutions and rule of law can’t be achieved. When it comes to law enforcement <…> 70% are confident doing business isn’t safe. <…> Michael Calvey situation is yet another proof.” Alexey Kudrin, Chairman, Accounts Chamber of the Russian Federation
“State regulation efficiency needs to be improved. Currently, Russia is more so towards the bottom of the list in terms of management efficiency, rule of law, and corruption control” Stephanie Flanders, Senior Executive Editor for Economics, Bloomberg; Head, Bloomberg Economics
High rate of consumer credit growth
“If we look at the overall credit structure today, we’ll see that consumer credit is in the lead. <…> I believe that it’s the consumer credit problems that are most likely to lead us to the next recession” Maxim Oreshkin, Minister of Economic Development of the Russian Federation
“People don’t take out credit to live large, it’s not the demand that is growing… <…> it’s the way to maintain a lifestyle when your income is growing slowly” Elvira Nabiullina, Governor, The Central Bank of the Russian Federation (Bank of Russia)
SOLUTIONS
Structural reforms
“We need to instigate structural changes. We’re promoting national projects that are hitting problems where it matters the most: labor efficiency, infrastructure, export incentives, small and medium-sized enterprises. <…> I’m confident that will boost economic growth” Anton Siluanov, First Deputy Prime Minister of the Russian Federation – Minister of Finance of the Russian Federation
“We have a slow growth problem <…> which can only be fixed through structural reforms” Elvira Nabiullina, Governor, The Central Bank of the Russian Federation (Bank of Russia)
Assuring entrepreneurs’ rights and property
“Many entrepreneurs today talk about the need to protect entrepreneurs’ rights and property. We need to work with that <…> We need to find the ways to protect entrepreneurs” Anton Siluanov, First Deputy Prime Minister of the Russian Federation – Minister of Finance of the Russian Federation
Conservative fiscal policy
“Softening fiscal policies when limitation lies in a different sphere isn’t going to instigate economic growth but will create inflation and financial instability risks instead. Stable low inflation is one of the factors leading to investment type of growth” Elvira Nabiullina, Governor, The Central Bank of the Russian Federation (Bank of Russia)
“We should be very careful when it comes to the reserves. They saved us the last time and we need to accumulate more to assure our security. <…> Second: spending the reserves means the weakening of budget rule” Anton Siluanov, First Deputy Prime Minister of the Russian Federation – Minister of Finance of the Russian Federation
Investment stimulation
“The legislature to protect and stimulate capital investment is ready. It will provide stable conditions throughout the entire investment project. <…> We started to push a policy to make the credit cheaper and to subsidize interest rates” Anton Siluanov, First Deputy Prime Minister of the Russian Federation – Minister of Finance of the Russian Federation
Development of education
“Last but not least are the investments into education and technologies. We’re investing slightly over 3% of GDP. Innovative countries, such as Sweden or Germany invest 5% to 7%” Alexey Kudrin, Chairman, Accounts Chamber of the Russian Federation
