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#5 - JRL 9097 - JRL Home
EXPERTS: GOVERNMENT FAILING TO TAKE REFORM OPPORTUNITY

MOSCOW, March 21. (RIA Novosti)-Russia is enjoying a stable macroeconomic situation, which can be seen in economic growth, an improvement in living standards and a reduction in poverty. World Bank analysts recently published these optimistic conclusions in their annual report. However, the analysts are convinced that the government is failing to make full use of this situation for conducting reforms, Izvestia writes.

Yuri Danilov, a senior macroeconomics adviser at the Center for the Development of the Stock Market, says the only thing that clouds the generally positive picture is the unpredictability of inflation. He also says structural reforms have not been completed, which means the country cannot effectively use the situation to improve living standards.

The World Bank's director for Russia, Kristalina Georgieva, agrees with this. Due to the need for structural reforms to ensure sustainable growth, she believes the government cannot afford to be self-complacent even given high profits from oil sales. She also points to the remaining serious structural tasks, from reforming the housing sphere and public utilities, which is due to the incomplete transition from one type of economy to another, to developing forms of state-private partnership.

In the opinion of Yaroslav Lissovolik, an economist with Obyedinyonnaya Finansovaya Gruppa (United Financial Group), structural reforms involve considerable spending. The current safety net thanks to high oil profits means that these expenses can be compensated. In a more difficult period, this will be impossible. In many key industries, for example, the natural gas industry, reforms have not even taken on any real form.

Statistics show that the gap between the incomes of the 10% richest and the 10% of the poorest Russians is growing. Their incomes differ by 14.8 times now. However, Lissovolik is sure that means that the rich stand to gain most of all from macroeconomic stability rather than that the poor will suffer more.