Streetwise Professor

May 19, 2009

Yurgens Channels SWP

Filed under: Economics,Energy,Politics,Russia — The Professor @ 9:05 pm

The Telegraph has an interesting interview with Medvedev advisor Igor Yurgens.  Here are the bits that caught my eye:

“The present system shows signs of overextension,” Mr Yurgens said. “It shows signs of over centralisation and fragility  [where have I heard that before?] because it is based not on institutions  [ditto] but on the mythological vertical of power.

“The reform process stumbled halfway. We have to push very hard to restart those reforms otherwise we will not be ready to catch up with the G8. We will remain on the level of leading emerging nations.”

Yes, institutional weakness, and personalized, centralized rule create fragility that will make it lucky for Russia to “remain on the level of leading emerging nations.”  

Also an interesting article in the Moscow Times:

“April data suggests there is no reason for optimism on the state of our economy,” said economist Yevsei Gurvich, head of EEG think tank. “It creates a risk that a second phase of the downturn cannot be ruled out.”  

The Central Bank, which is under pressure to ease credit conditions, cut official interest rates twice in recent weeks and signaled more cuts despite inflation remaining in double digits. Officials have said the economic situation was stabilizing.  

“Today’s data signals very weak labor market data,” said Rasmussen. Many analysts will also be watching the next jobless data as a measure of domestic political risks, although public discontent with the anti-crisis policy remains subdued.  

The State Statistical Service did not release its monthly jobless numbers for March, publishing quarterly data instead, a move seen by some analysts as an attempt to gloss over unpleasant information.  

The service did not explain the move, and an absence of the monthly data for April will further undermine analysts’ view on stabilization of the Russian economy.  

Monday’s record fall in industrial production compared to a 13.7 percent year on year decline in March. The previous contraction record in the series’ seven-year history was set in January, when output fell by 16 percent.  

“The search for the bottom is still on. In May, we may see an even lower number,” said Trust Bank chief economist Yevgeny Nadorshin. “Problems in heavy industries, cuts in investment plans remain.”  

This article illustrates the policy dilemma facing Russia.  Attempts to spur economic activity by cutting interest rates risks fueling inflation and weakening the ruble.  No wonder Kudrin is “stressed.”


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  1. I had an idea that the SWP might want to start a Linked In group on Russia and oil prices stuff. I am witnessing a surge of activity by a whole lot of professionals on Linked In and fairly decent discussion groups of various technical topics.

    Comment by Surya — May 19, 2009 @ 10:27 pm

  2. Gosh, if even the Russians are admitting the country is in massive trouble, can you imagine — do you dare to — how much trouble it’s really in?

    Wonder if the Russophile contingent will try to attack these Russians, too, as crazed Russophobes who cannot see the forest of Putin’s brilliance for the trees of “racism.”

    The thing about Russia is that it knows no bottom. No matter how low it is today, there’s always something lower around the bend — that is, until not a single Russian remains standing, and they appear to be working real hard on achieving that in the Kremlin these days, certainly far harder that Hitler ever dared to (with the new law on history, I could be arrested for saying that in Russia and sent to prison for up to five years).

    Comment by La Russophobe — May 20, 2009 @ 3:18 pm

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