Old Saint Basil's Cathedral in MoscowJohnson's Russia List title and scenes of Saint Petersburg
Excerpts from the JRL E-Mail Community :: Founded and Edited by David Johnson

#8 - JRL 8477 - JRL Home

MOSCOW, Dec 1 (RIA Novosti) - Experts are largely pessimistic in their forecasts about the consequences of Ukraine's "orange revolution" for the Russian economy.

Viktor Vereshchagin, deputy director of the Expert Institute, believes the Russian economy has already been hit by the fall-out of the political crisis in Ukraine, as Ukrainian business has suspended contacts until the situation there becomes clear. "If forces that are unfriendly towards Russia come to power, the property of big Russian business in Ukraine will be put under a question mark," Mr. Vereshchagin believes. According to the expert, major fuel and energy, metallurgic, automotive and other companies may lose from $10 to $100 billion.

Andrei Shastitko, deputy director of the Bureau of Economic Analysis, said Ukraine's banking sector was a weak point. "If it is affected, the real economic sector will encounter difficulties, including in transferring money to Russian partners," Mr. Shastitko told Noviye Izvestia. However, the expert believes certain sectors of the Russian economy that are rivals for their Ukrainian counterparts may even benefit from the crisis. This is particularly true of the metallurgic sector. Relatively cheap Ukrainian metal has been a headache for Russian producers.

Mikhail Delyagin, the head of research at the Institute of Globalization Problems, does not agree with the opinion. Some Russian metal works might benefit temporarily from an economic collapse in Donbass, an industrial region in eastern Ukraine. However, Ukrainians who will lose their jobs will then come to Russia. According to Mr. Delyagin, metal plants will have to spend all they earned from the collapse of their Ukrainian rivals on social support for the unemployed.

The disorganization of Ukraine's financial system is a more urgent threat, the expert believes. The situation may deteriorate in the future. "Gas pipeline tapping may begin [nearly 80% of Russian gas is exported via Ukraine] not for financial purposes, but to survive the winter during the crisis," said Mr. Delyagin.