Something is coming over the Russian economy in 2003
The collapse of the US energy giant Enron, of the telecommunication company Worlcom and several other American companies resulted in the outburst of distrust towards the American economy. This eventually led to a serious crisis at world exchanges. The outflow of investments from the US economy continued throughout almost the whole year. The aggravation of relations with the Arab world, particularly with Saudi Arabia, increased the outflow of Arabian petrodollars.
Russia has not been affected with those events. At least, it seems so at first sight. Moscow was happy about the growth of oil prices. Yet, the Russian government acknowledged at the end of the year 2002 that the economic growth continued only in the field of fuel and energy complex and in the food industry. Other industrial branches experienced either a setback or a standstill. Therefore, Russia will have to experience the consequences of the world crisis in the new year anyway.
The international policy of the Russian government took a clearly economic character in 2002. Foreign Ministry, ministers, the prime minister, and even the president started lobbying the Russian business on the international arena. Russia has never had anything like this before. The USA and the European Union acknowledged Russia as a market economy country. This implies better sympathies to Russian exporters on the part of Western markets. Viktor Rashnikov, the President of the Magnitogorsk Metallurgical Factory has recently had a meeting with President Putin. Mr. Rashnikov told the president that the Russian metallurgical branch experienced a great relief owing to those efforts of the Russian government. Although, both anti-dumping persecution and customs obstacles are still there.
Another achievement of the Russian government is the fact that the international association for struggle with money laundering (Financial Action Task Force, or FATF) struck Russia out of its so-called black lists. Ukraine has not made anything on time concerning this subject. Now it experiences big problems because of that. Furthermore, international rating agencies raised Russia’s credit rating too. However, one of the most important questions of the Russian economy still remains undecided. This is the question pertaining to Russia’s membership in the World Trade Organization. The Russian government stated in the beginning of the past year that it was one of most important issues to deal with. After that, the government was lambasted by Russian oligarchs.
Two political parties fought with each other all the year round, trying to win Vladimir Putin’s attention. The president managed to keep a neutral position. Putin said to the whole world that Russia had its “natural advantages,” and that the country was not going to refuse from them. In addition to that, the WTO tried to drive all those competitive natural advantages out of Russia, if it wanted to join the organization. As a result, there is no progress in negotiations. Vice Prime Minister of the Russian government, Aleksey Kudrin went to Europe at the end of 2002. Mr. Kudrin had a strong intention to announce that Russia was determined to join the WTO. Aleksey Kudrin also said that Russia wanted to make this membership bring good to the country. In return, WTO members came out with tons of new claims and terms. Discussions are still on.
The foreign economic progress that has been achieved in the year 2002 opens wonderful international perspectives. However, the economic recession in the whole world as well as the intention of the European Union to use this opportunity in order to establish the new economic order for its own favor makes it clear: Russia will only have a little piece of that pie. Here is a proof: the plans to enter world oil markets (presumably in the USA) failed. OPEC is still the major oil supplier in the world today.
The whole economic year was marked in Russia with peak payments in the year 2003. The government will be preoccupied with getting the money for paying the country’s foreign debt. Economists start talking about a possibility of a new default. The government rejects that. However, it is clear now that Russia will not be able to survive the new year without any large foreign loans. This virtually means that the incentive of the crisis of 1998 has been exhausted. It deems that Russia failed to use favorable opportunities for structural reforms in the economy again.
Translated by Dmitry Sudakov
According to Medvedev, Ukraine's GDP may fall by another 5-10 percent in 2023 due to the continuation of the special military operation