The Russian authorities have been lost in their own forecasts. First Vice Prime Minister Igor Shuvalov once said that Russia had already overcome the peak of the crisis. Hardly had the Russians rejoiced over the news when Finance Minister Aleksei Kudrin showed everyone from heaven to earth when he said that Russia was expecting a second wave of the crisis.
What is actually happening? Officials attempted to find a common denominator at during the international conference at the Supreme Economic School yesterday.
“We have already performed the hard landing. The worst has been left behind,” the first deputy chairman of the Central Bank administration, Aleksei Ulyukayev said.
The audience found the official’s statement quite surprising, so Mr. Ulyukayev had to continue. He said that there was no economic bottom, which a country could reach and then spring forwards.
“The abyss for mammals is a normal habitat for fish,” the official said.
Mr. Ulyukayev did not specify, which class of the animal world Russia was referred to in his metaphorical comparison. He continued his game of associations and said that a second wave of crisis did not exist in the natural world either.
“This is not a wave. A whale looks like fish, but it is not fish. It only means that we exaggerate our problems,” the official said.
Even if Russia had performed its emergency landing in the financial crisis, it will have to come a long way before it could take off and fly high again.
“The bank crisis in Russia has just begun. It will come from the real sector of economy,” the head of Sberbank, German Gref said.
Mr. Gref is certain that the Russian economy will have to face real problems in the nearest future. A great deal of Russian borrowers will not be able to pay off their debts. The share of ‘bad loans’ in Russian banks has already achieved 3.8 percent. Russia’s Finance Ministry says that it will not exceed the level of ten percent this year. Mr. Gref is more pessimistic, though. The share of ‘bad loans’ made up the average of 34 percent during the bank crises of the recent 30 years. About 40 percent of Russian borrowers failed to pay off their debts to banks during the 1998 financial collapse in Russia.
It seems that the Russian government is prepared to wage a long-term struggle with the crisis.
“The major part of the Russian economy is not effective, it will not have any chances to survive during the upcoming ten years. That is why the government does not need to give loans to worn-out and inefficient productions. The money should be given for the creation of new efficient means in the economy,” Arkady Dvorkovich, an assistant to the Russian president said.
Igor Shuvalov believes that Russia must use the crisis to conduct structural reforms in the country. The time period for that is limited to three years only, which will be the duration of the world economic crisis, the official said.