The Government summed up the results of 2008. Deputy Prime Minister and Finance Minister Alexei Kudrin said the other day that, owing to the crisis, the situation was extremely difficult and that 2009 would become the most difficult post-war year. Nevertheless, Prime Minister Vladimir Putin remarked optimistically that the Russian economy was in the black.
The financial crisis and authorities created economic problems throughout 2008. For instance, all sectors were increasingly monopolised. Two months before the financial crisis, the Mechel case caused a stock-market crash and cost investors $60 billion.
Things could be better
Despite these problems and the persisting financial crisis, the Russian economy was in the black last year. "The results are mostly positive but could be better," Prime Minister Putin told the Government's last meeting in 2008. Although GDP did not grow by the projected 7.3%, it nonetheless posted a 6% growth. Agricultural output grew by 10%. A bumper crop was harvested in 2008. Average wages and pensions increased 10-12% and over 30%, respectively.
Although the Finance Minister said two months ago that Russia would become an island of stability and the State Duma unanimously approved unjustified multi-billion rouble investments in the economy, official optimism has recently waned. The Government has spent 25% of the gold and foreign-currency reserves in the last two months, and the Prime Minister is now saying all accumulated reserves will not be thrown into the "crisis furnace" without the assessment of the efficiency of such investment. "We are now prioritising the efficient management of resources," Putin said.
Adrenaline injection
It appears that no one in the Government has any illusions that the present crisis will be overcome without a serious drain. The recently optimistic Alexei Kudrin said 2009 will be the most difficult year for the Russian economy in the last nine years and the most difficult post-war year for the global economy.
He also stressed that Russia would face a substantial budget deficit, and that GDP would grow by not more than 3%. Deputy Economic Development Minister Andrei Klepach said an all-out nationwide recession had set in and would last longer than six months.
"Instead of facilitating stagnation, gloom and pessimism, our work in difficult conditions must inject adrenalin into the bloodstream. We will break through if we work effectively," Putin said. The Government plans to break through in accordance with an anti-crisis programme, due to receive trillions of roubles reserved by the Central Bank.
President Dmitry Medvedev said the Government was proposing a well-balanced anti-crisis programme. "Naturally, this far from ideal programme addresses the most difficult challenges and can be modified just like any other programme," Medvedev stressed. Prime Minister Putin said the Government planned to implement 60 high-priority projects, many of which are linked with the social sector.
Focusing on the labour market
In late 2008, the number of officially registered jobless people increased 4% for the first time in the last four years and reached 1.46 million. Last week, 10,000 companies axed 53,000 jobs. In all, 310,000 people have either taken an unpaid leave or are working part-time. The Healthcare and Social Development Ministry estimates official unemployment at 2.1-2.2 million through 2009.
In 2008, inflation reached 13.5% instead of the projected 8.5%.
Russia's gold and foreign-currency reserves shrank from $580 billion in September to $450 billion in December.
Nationwide unemployment increased from 4.24 million in early 2008 to 4.6 million in December.
Although GDP was to have swelled by 7.4% by late 2008, the Government
now expects 6% growth.
Average per-capita income soared from 12,500 roubles in early 2008 to 15,500 roubles in December.
Total wage arrears reached 7.8 billion roubles ($236.3 million).
What could have been bought?
The Central Bank spent $130 billion worth of gold and foreign-currency reserves on coping with the crisis and propping up the rouble. This amount could have bought 200 automotive plants or about four tonnes of gold, construct 20 refineries or launch 4,500 space tourists.
Pyotr Geltishchev