#9
BBC Monitoring
Russian economic guru sees solvency and market status
as key to future
Source: Russian Public TV (ORT), Moscow, in Russian 2030 gmt 3 Dec 01
The visit of an IMF delegation to Russian this week, and the fall in oil prices have led to speculation about the country's foreign debt, and its overall economic standing. In an interview with Russian Public TV, the former finance minister, Aleksandr Livshits, argued that Russia needs to avoid restructuring its debt, and to establish its market status. The following is an excerpt from a report by Russian Public TV on 3 December
[Presenter] Our guest today [3 December] is the well-known economist and former finance minister, Aleksandr Livshits. Aleksandr Jakovlevich, hello.
[Aleksandr Livshits] Good evening.
[Presenter] As was said in the report of my colleague, Maksim Bobrov, the question of new loans for Russia will not be raised during the [current] IMF visit. But, still, what do you think? In connection with the fall in oil prices, will Russia again be forced to sink further into debt? Or will it be able to get by without such recourse this time?
[Aleksandr Livshits] I will begin with the fall in oil prices. There has been much talk about this, but during recent weeks the oil price has been holding steady around the level of 18, 19, 17 dollars per barrel, which is eminently satisfactory for us.
The fact that alarming prognostications surfaced, quoting such figures as 10 dollars and so on, is testimony to the fact that talks which are normally conducted behind closed doors, emerged into the public domain, and citizens saw how difficult those talks are. That is, the parties start by scaring each other, and then begin to converge.
There are no signs that the oil price will fall to 10 dollars per barrel. If the price remains somewhere in the region of 17-19 [dollars] in the next year, and according to our estimates this will be the case, we will not have to resort to loans and the budget will hold out.
[Presenter] Today, while the global antiterror campaign is going on, the West is interested in there being a stable economic situation in Russia, and is ready to help. In particular. the USA has announced plans to write off Russia's debts inherited from the Soviet Union. However, the USA is not our main creditor. Other parties have the decisive word. In your view, are they ready to do this?
[Aleksandr Livshits] In my opinion, no. If these words had been spoken in Berlin, then it would have been much more noteworthy. I do not think there will any writing off of the debt. And personally speaking, it is likely that this would even be to some extent worse. You see, practically the whole world is watching to see whether we will again ask for something, beg, or want a restructuring or writing off of our debts, or whether we will be able to cope by ourselves. If we are able to cope by ourselves, then a positive breakthrough in attitudes to Russia is practically guaranteed...
[Presenter] Aleksandr Jakovlevich, what concessions is the West expecting from Russia in return for entry into the WTO?
[Aleksandr Livshits] Well, to be frank I am not aware of any list of such concessions. The heart of the matter lies elsewhere. The main problem with entry into the WTO, is how to successfully prepare for such a decision. That we should join is beyond question in my view. The WTO has 140 member-states, and I hardly think that we should be an exception.
However, how to prepare for this, and to conduct meaningful talks requires serious consideration. What is the nub of these difficult talks and these complicated preparations? The fact is that each country which joins the WTO is granted a transitional period, during which it lowers duty on its goods, rather than opening the door all of sudden, with an almighty yank. The door is opened gradually. And, naturally, the longer this period is, the better. This is the subject of argument.
Another issue is from what level should the customs duties, or state subsidies for, let's say, agriculture, be reduced. It is clear that it would be desirable for us, if the start level of duties and subsidies were higher rather than lower, and then was gradually reduced.
The third issue, of which little is said, but which, believe me, is very important, is awarding Russia the status of a country with a market economy. At the moment, we do not have such a status, and as a result, even if we join the WTO, the European Union, could employ antidumping measures against us, regardless of the fact that we are already members of the WTO. Therefore, the third problem is how to acquire this market status at the same time as joining the WTO. As far as I know, this is the very issue that our negotiators are dealing with.
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