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Analysts: West-Russia compromise essential to easing economic risks

January 19, 16:26 UTC+3 Zamyatina Tamara
© EPA/JEAN-CHRISTOPHE BOTT

MOSCOW, January 19. /TASS/. The forthcoming Davos Economic Forum is a source for cautious optimism, polled analysts have told TASS. In particular, they hope for further steps for a political compromise among the United States, the European Union and Russia for easing mutual economic risks.

The Russian delegation at the Davos forum due on January 20-23 will be led by deputy prime minister, Russia’s special presidential representative in the Far East Yuri Trutnev.

Just several years ago Russian officials were telling the Davos forum it was essential to diversify the economy, create modern infrastructure and develop the human resources. Some major challenges have now interfered with the agenda. After Crimea’s reunification with Russia and the flare-up of the conflict in the southeast of Ukraine the United States and the European Union imposed economic sanctions on Russia. The oil price slump has stripped Russia of the expected revenues. In the just-published report WEF experts say that Russia’s key risks in 2016 will be the budget deficit, hyper-inflation and soaring unemployment.

The world economy, too, will be in the focus of WEF participants, in particular, problems with the new technological revolution and the drastic growth of unemployment.

The president of the VTB bank’s observer council, former Central Bank governor Sergey Dubinin, believes that big businesses in Western and Asian countries are keenly interested in the vast Russian market. "Businesses need growth drivers. They are interested in purchasing cheap Russian raw materials — crude oil, metals, and chemical products. But businesses are very cautious when it comes to investment. They will prefer to watch and wait for politicians in the United States, the European Union and Russia will achieve a compromise on Ukraine," Dubinin has told TASS.

"There has emerged light at the end of the tunnel in settling the Ukrainian crisis. Russian presidential aide Vladislav Surkov and US Assistant Secretary of State Victoria Nuland had a meeting just recently to identify ways of conducting a constitutional reform in Ukraine. Within a matter of days the Contact Group for the implementation of the Minsk Accords will meet in session. This makes one hopeful the anti-Russian sanctions may be lifted and the risks for Russian economy eased," Dubinin said.

"Participation in international cooperation and production chains for Russia is crucial. Not a single country makes everything on its own. The WEF is an excellent place for business people to devise ways of being plugged into international cooperation. Alongside raw materials our Western partners are interested in Russian software and electronics, which may serve as a basis for cooperation. Economic growth around the world is resuming and this means demand will be rising accordingly. This explains why steps to meet each other halfway will be mutually essential," Dubinin said.

A member of the OSCE Council of Wise Men, Sergey Karaganov, a regular participant in WEF sessions, has told TASS: "The search for a compromise to address the Ukrainian crisis and restore relations between Moscow and Brussels will most probably be conducted not in Davos, but within the OSCE. Although the organization is very slow in decision making, Russia will be using the international structures that are available."

And Professor Leonid Grigoriev, of the Higher School of Economics, has described the participation of the Russian delegation in the Davos economic forum as useful.

"The fact that Yuri Trutnev leads the Russian delegation indicates that before the normalization of relations with the West Russia will try to make an eastward turn via Davos, by attracting investment into the Far Eastern region, where Trutnev is the president’s special representative. The Davos forum is an important event for the development of international contacts in Russia and shutting the door closed is not in Russia’s interests," Grigoriev told TASS.

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