Vladimir Putin chaired the Russian government a year ago, on May 8, 2008. Putin’s new occupation can not be described as extremely successful, although one has to give his government credit for avoiding the collapse of the nation’s financial system during the crisis. The Russians did not lose their bank savings in one day as they did in 1998, experts say.
The global economic crisis occurred only three months after Putin took his new office as the premier. The Russian government originally believed that the crisis would not affect Russia. Top officials used to say that Russia was an island of stability in a storming sea. Even if problems could occur, they said, the nation’s financial reserves would be enough to set the economy afloat for ten years.
The government based its certainty on Russia ’s crude and gas reserves. However, they soon had to come down to earth.
The team – Medvedev-Putin – works consistently. It is highly important to have the decision-making center during critical times. Putin’s government became such a center, experts acknowledge. In general, one may say that his government has managed to keep the situation in the country under control.
“One has to give the government credit for achieving a high level in saving the funds. Even if the country runs out of its reserve funds before 2011, their availability in the beginning of the crisis and the absence of the need to ask for loans will help Russia extricate from the crisis,” financial analyst Elena Avilova said.
Russia ’s Reserve Fund will be enough for one more year. Afterwards, the government will have to lay a heavier burden on business.
“The biggest problem that the government has to deal with at the moment is the problem of bad debts. They need to realize how they could handle that. The bad debts of banks may grow from the current level of three percent to six or even fifteen percent,” VTB-24 analyst Dmitry Lepetikov said.
Experts acknowledge, though, that Russia will not be one of the countries that will bid farewell to the crisis soon. The government did not let the crisis strike a severe blow on Russia , although it is not clear how the country will recover from the decline.