#6
Komsomolskaya Pravda
No. 219.
November 28, 2001
[translation from RIA Novosit for personal use only]
2002 WILL BE A CALM YEAR FOR RUSSIA
Mikhail ZADORNOV, deputy chairman of the Duma budgetary committee and
ex-finance minister, interviewed by Alexei MAKURIN
Question: Will the current oil problems provoke another financial catastrophe in Russia? We all remember how oil prices plummeted in 1998.
Answer: Don't panic, for the situation is completely different now. Russia no longer has the giant GKO debts, which we had to repay in 1998. The government and the Central Bank are not duty bound to restrain the exchange rate of the rouble. The rouble will become cheaper slowly.
Question: How slowly?
Answer: I think the dollar will cost about 33 roubles by the end of December 2002. Inflation will amount to 15-16% and economic growth will equal 2.5-3%, which is a smaller figure than the one registered this year. But on the whole 2002 will be a calm year. The Russian economy has become less vulnerable to external blows than it was before.
Question: What makes you so sure?
Answer: First, we have accumulated certain reserves. By January 1, 2002, our budgetary accounts will have 3.5-4 billion dollars over and above the plan. Second, the 2002 budget stipulates the accumulation of a financial reserve of another 3.5 billion dollars.
Question: Do you mean that there will be enough money for paying wages, pensions and our debts to the West?
Answer: Yes, for one year. But if we consume the reserves, life will become more complicated.
Question: But the government has already asked the Duma to allow it to reduce expenses by 68 billion roubles in 2002 if we fail to earn the planned revenues.
Answer: This is a minor reduction and many deputies may refuse to vote for it during the third reading of the budget.
Question: But is it inevitable?
Answer: I don't think so. Inflation in 2002 will be higher than stipulated in the budget, which means that we will have additional inflation revenues. They will save the country.
Question: But inflation is not a positive thing, because prices will eat up a part of wage rises.
Answer: The government based the budget on conservative inflation forecasts so as to have a room for manoeuvre.
Question: How long will this black period last?
Answer: Most forecasts say that the world economy will start growing again in the second half of 2002 or in 2003. Raw materials will become more expensive, but forecasting oil prices is like telling fortunes in a teacup.
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