MOSCOW, November 21 (Itar-Tass) —— President Vladimir Putin said Russia has been facing increased risks after accession to the World Trade Organisation (WTO) due to crisis tendencies in global markets.
“Crisis tendencies in global markets have increased the risks related to the obligations we have assumed, primarily those to reduce import duties for certain goods,” Putin said at a meeting of the Security Council on Wednesday, November 21.
He noted that “our economy will have to make a big adaptation effort and reach a new level of competitiveness and openness during the initial period of our functioning within the WTO”.
The president did not rule out “some difficulties in the short term, especially at the moment when global growth rates have slowed down”.
In his opinion, “The global market today is characterised by low demand and investment activity. This creates the risk that we might not get quick positive results from WTO membership. But pursuing an effective policy to attract investment could partially offset the negative impact of global stagnation.”
“All of us ... realised during the concluding stage of the negotiation process [with the WTO] to just what extent the global economy could slide into recession, and we realised full well that our partners made concessions in many areas and agreed to some of our demands, understanding the obligations as we did, and trying to secure guaranteed access to our markets. We made a conscious decision to accept these risks,” Putin recalled.
He stressed that “we have joined the WTO on far more advantageous terms than did many of our neighbours and partners, but this does not lessen the risks related to global recession”.
The resident believes that Russia “everything necessary during the negotiations to give our companies the chance to adapt to the new situation and rules”. At the same time, he admitted that “some sectors could face particular problems, above all in some areas of livestock farming, agricultural machinery, the automotive sector, light industry, food processing, pharmaceuticals and manufacturing medical equipment”.
Putin said that Russia’s membership in the WTO could create additional difficulties in regions with little economic diversification, in single-industry towns, for example. “The closure of loss-making, ineffective companies, especially big enterprises, could increase unemployment and create social risks. There is also the risk of regional budgets seeing their revenue fall. Ultimately, this could increase the gap between regions in terms of social and economic development, and this is a serious challenge,” he said.
The president set the task of minimising these risks and negative effects and protecting people’s interests.
Putin recalled that the government is to draw up an action plan for adapting particular economic sectors to the new situation that the WTO membership creates. “Some of the required measures have already been carried out, but these are just the first steps,” he added.