By Andrei Skvarsky.
Russia’s economic model is a bigger obstacle to the country’s economic growth than the Ukraine-related sanctions but the government is incapable of fundamental reforms, Reuters cited former Russian finance minister Alexei Kudrin as arguing.
The government lacks both political will for major reforms and people capable of carrying them out, Kudrin told the Reuters Russia Investment Summit this week, predicting that the country was in for years of stagnation and balancing on the edge of recession.
To make matters worse, oil, one of the main pillars of Russia’s economy, is likely to go down in price after steadily going up for about a decade, he said.
Yet though he did not see the Western sanctions as the Russian economy’s main scourge, he did consider them a major blow.
It would be at least two years before Russia was again able to borrow in global financial markets, he forecast.
Boosting ties with Asian countries, which is much hyped as an antidote, could only be a partial solution, according to him. The West is the only source of technologies Russia needs to develop new oil and gas resources in the Arctic and the Far East, he argued.
He said Russia would need to continue to obtain basic technologies from the West for at least 20 years.
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