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Russian economists disagree with Obama’s gloom prophecies

January 21, 2015, 15:59 UTC+3 Alexandrova Lyudmila
US President Barack Obama delivering his State of the Union address

US President Barack Obama delivering his State of the Union address


MOSCOW, January 21. /TASS/. US President Barack Obama’s claims Russia is isolated and its economy is in tatters have nothing to do with the reality and represent a perfect sample of wishful thinking, polled economists have been telling TASS. Russia’s unemployment is low, the situation in the agri-industrial sector is not bad at all, the basic industries keep working and the country is looking for new markets and sources of borrowing elsewhere, including Asia. Analysts say it is essential to just evaluate the situation properly and to take the correct anti-crisis measures.

“It is the people and natural resources, such as oil and gas, that constitute the nation’s main potential,” says the deputy chief of the public finance chair at the Higher School of Economics, Dmitry Kamnev. “Russia is exploring new markets for its products in Asia. Contracts with China have been concluded. There are tangible financial reserves.” In his opinion, at this moment it is essential to just correctly identify priorities, diversify the economy and stimulate medium businesses.

The leading research fellow at the Macroeconmic Studies Center of the presidential academy RENAPA, Olga Izryadnova, is certain that Obama’s comments are very far-fetched.

“The reports of our death have been greatly exaggerated, as a US literature classic once put it. Although the oil price slump and sanctions have had a painful effect on the economy Russia still has a growth potential. Besides, the level of unemployment is very low.” At the moment, she believes, there should be a package of measures aimed at promoting the consumer market — the light and food industries. This year’s good harvest may prove very helpful in this respect. And the implementation of the government’s anti-crisis plan is bound to bear fruit.

Senior lecturer at the Russian presidential academy, Olga Malikova, too, believes that US president mistakes his fantasies for the reality. “The condition of the agri-industrial sector is not bad. Some effective measures have been taken in agriculture and the problem of this year’s food supply has been resolved, although the prices of foods have been up somewhat. The basic industries keep working by and large. True, if the price of oil stays at 50 dollars per barrel, there will be problems, but all of them will be surmountable. We shall manage to make it to the shore. Creating jobs in the regions is of the essence. And it is important to stick to the idea of the social state.”

RENAPA associate professor, Vasily Yakimkin, has dismissed Obama’s claims as gibberish. “Even though our economy is not in a very good condition: growth rates are falling, the risk of recession is looming on the horizon, we will go on developing no matter what,” he said.

The work load on Russian corporations is good. The country’s level of unemployment is one of the lowest and the foreign debt has shrunk. True, Russia has problems as the Western sanctions have plugged most western sources of borrowing, but a decision has now been made to look for lenders in Asia.

The director of strategic analysis at the FBK consultancy, senior lecturer at the Higher School of Economics Igor Nikolayev, denies Russia has been isolated. “The current level of involvement in the world economy as it is, this just cannot be done,” he said.

In order to overcome the economic problems there has to be the awareness the remedies of six years ago that were used to resist the first tide of the economic crisis will not work this time, Nikolayev said. “One has to be more realistic in assessing the situation. Budget spending must be revised. Cutting only some spending articles and leaving others intact would be wrong. Also, tax pressures should be eased.”

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