Currency converter
All news
News Search Topics
Use filter
You can filter your feed,
by choosing only interesting

Expert Opinions

This content is available for viewing on PCs and tablets

Go to main page

Western sanctions to promote Russian economic development

March 31, 2014, 14:32 UTC+3 Alexandrova Lyudmila
© ITAR-TASS/Vladimir Smirnov

MOSCOW, March 31. /ITAR-TASS/. Far from slowing Russia's economic growth, Western sanctions would give an impetus to economic development that would “get off the import needle,” Russian state officials and experts said. This was not because they sought to find something good in bad. Sanctions would push Russia to make non-standard economic solutions, promote industrial revolution and change in liberal doctrine to make domestic companies stake their positions on the domestic market, they said with confidence.

First results of sanctions were already obvious in this respect. Russian bank Rossiya, under the impact of sanctions, decided to work only on the home market and only with rubles. After international payment systems Visa and MasterCard suspended servicing of bank cards among clients of this and several other banks, state authorities announced the forthcoming creation of a nationwide payment system that did not depend on actions from other countries.

“Those changes that are being made in bank Rossiya are largely a step forward to make our economy, our banking sector, a true sector of domestic currency, and we have opportunities for this,” Vnesheconombank (VTB) President-Chairman Andrei Kostin believes, adding that “Russia should sell its resources and its products, from weapons to gas and oil, for rubles.”

“(Russia should) buy products for rubles as well. Then we will fully use those advantages which the ruble gives us as a convertible currency.”

Many high-ranking state officials called for creating a full-fledged nationwide payment system. The president also supported the initiative. Vladimir Putin said that the Central Bank of Russia and the government were working actively on forming such a system.

The president believed that this step would make the home economy more protected and the financial sector more stable.

Prime Minister Dmitry Medvedev has recently raised the issue of import substitution strategy. “Regardless of the international context and some difficulties that our economy experiences, we should deal with this closely because we are fixed on the import needle too deeply,” he admitted.

“It is impossible to do everything. The global economy and global technologies are developing. But we cannot produce ourselves a lot of the products we buy,” Medvedev believes. Notably, in his view, it was necessary to provide conditions for quality food products to be made mainly in Russia.

“No matter how paradoxical this sounds, the current situation may finally allow us to deal with our production industries and promote other industries that are underdeveloped now,” Deputy Chairman of the International Affairs Committee of the State Duma lower house of parliament Leonid Kalashnikov said.

“It was a blessing in disguise! Imposition of economic sanctions is just an impetus that makes us change economic policy and pull the domestic economy from the vicious circle,” Russian academician and presidential adviser Sergei Glazyev said.

“Economic sanctions are the strongest stimulus of economic growth and under this threat, we can resolve problems that had ripened a long time ago, particularly creation of domestic credit sources, expansion of our processing industries and an upsurge of investment activity thanks to internal sources,” Glazyev believes.

Meanwhile, such threats give Russia an opportunity to reprocess raw materials in the country as the fewer raw materials we export, the larger the raw material base will be and better the capabilities for reprocessing are, the academician added.

“Current crisis in relations with the West provoked by events in Crimea seems to turn in a factor of economic development,” director of the Institute of Globalization and Social Movements Boris Kagarlitsky told Nezavisimaya Gazeta daily, noting that “instead of holding back economic growth in the country, sanctions may stimulate it.”

The wave of patriotic indignation caused by actions of Western governments certainly was not a boost for the economy, the expert noted. But this factor promoted a turn towards the domestic market as it was high time for this before events in Crimea. In this sense, sanctions may bring an unexpected positive effect for modern Russia.

“Russia’s integration in the world economic system is specific in that for the sake of entering the global market the country largely sacrificed its domestic market, giving up protection of its own production industries and development of its technologies,” the expert noted, adding that “the liberal doctrine triumphing among our economists required the largest possible transparency which should be attained at any cost, sacrificing social tasks, employment, scientific projects and long-term investment.”

It was clear that active import substitution was possible only with the backing of an advanced industrial policy which leading liberal economists did not like from the very beginning of Russian reforms, Expert magazine reported. “We evidently witness a change in the epochs of Russian economic policy,” the magazine concludes.


ITAR-TASS may not share the opinions of its contributors