Last Update: 09 April, 2003
April 2000 - Glimmers of Hope in the Russian Economy
stock market rose 5% and the rouble strengthened on the news of Putin's
victory in the presidential elections. With Putin preparing to use
is election mandate to banish corruption and draw up new laws to win
desperately needed investment.
In addition there are signs that some Russian capital, spirited abroad over the last ten years, is being repatriated. Perhaps the oligarchs have begun realise that, as there is very little left to steal, they must reinvest and add value to Russian businesses if they are to make more money for themselves.
Since the 1998 Crash
Russia is never as strong as it seems, but at the same time, it's never as weak as it seems"Thane Gustafson (author of the book "Capitalism Russian Style")
economic collapse has not been as bad as most economists expected in the
immediate aftermath of the rouble devaluation and the government's default
on domestic debt in August 1998. Certainly, the early forecasts of
disaster have not materialised.
Russia has an
opportunity to support economic growth in the near future from the
windfall of high oil prices. The government should not be lulled
into a false sense of security and do nothing - it must act quickly to
reform the economy before a cruel twist of fate sends oil prices
On the positive side there signs that Russia's endemic barter system is losing ground to healthier cash payments, monetisation of the economy is increasing while arrears and barter are falling.
Russia's size, its 147m population, the strength of its education system (and consquently its well trained and educated workforce) and the poorly developed market system outght to offer enormous potential for foreign investors.