Russia risks becoming the most backward country among post-Soviet countries
Today during the annual press conference Russian President Vladimir Putin spoke on the topic of sanctions. In his opinion, the economy has adapted to external constraints. After the crisis of 2008-2009, GDP fell by 7.8%, no sanctions were not. And after the imposition of sanctions in 2014, the fall was 2.5%. The negative impact is, but there are advantages from these sanctions. Sanctions, according to the President, forced the Russians to turn the brain on some areas. All that said, of course, true. Can’t argue with that.
However, there are several important details. The devaluation of the 2014 devalued the work of the Russians and helped to keep the margin that is supported by the Treasury and dividend payments of companies. Through real private income fell by 11%. And the situation is improving very slowly. In other words, for ordinary Russians, the situation is much worse than he said.
And most importantly, the victims of Western sanctions became the Russian financial primarily investment sector. The liquidity of the stock market and the dollar market capitalization of the companies is much less than before the 2008 crisis. But Dmitry Medvedev during his presidency, talked about the international financial centre in Moscow. Now this idea has been forgotten for a long time, if not forever. Without investment, IPO, developed financial markets to talk about the growth of labor productivity and economic breakthrough is unlikely.
A weak ruble is actually put a ban on the import of technology and attracting highly qualified personnel from abroad. In the long term, being in forced isolation, Russia is likely to fall into the trap of technological obsolescence, being marginalized from the global economy. And, of course, due to the fact that the shares of Russian companies as a result of the sanctions assessed is much cheaper, the Russians are much poorer.
The situation is much worse, and the risks are higher than the President said. The question of whether there is an understanding that the leadership of the country, remains open.
The Director of analytical Department,