How international crisis affected Russian economic

How international crisis affected Russian economic

Any international economic crisis afflicts countries in different ways, and in Russia it is facing the decline in energy and metal export earnings, a credit crunch and bank failures, default hypotheses, and accelerating the flow of capital.

Russians have finally responded to the question they have asked since the economic collapse of 1998:

can something happen again to this crisis?

Probably yes, seems the real response.

Russians recall that 1998 was not just an economic calamity but a political crisis. It concluded the political career of liberal political decision-makers and led communists to the cabinet. He offered a hearing to the protectionist demands of Russia to isolate itself against the fluctuations of the international economy. 

The importance of cooperation with other countries and the West 

In Russia’s response to the 2008 crisis there were some echoes in 1998, including a generous proportion of anti-Western rhetoric.

The most characteristic feature of Russia’s comprehensive response to the crisis has been its emphasis on the importance of further reforms and cooperation with other countries.

But the restoration of state control of the economy must be avoided at all costs. The government cannot replace the private sector, the market and the business.

The only way to stabilize the economy and sustain growth is through transparency, competition, accountability and the protection of property rights.

What are the possible economic solutions to Russian crisis?

Many Russian commentators have argued that if the goal is to maintain a Russian economy hit in the international mainstream (https://www.1tv.ru/news/2011/04/20/128036-vladimir_putin_rossiya_v_krizis_sumela_izbezhat_oslableniya), there will probably also be adjustments in Russian foreign policy. They do not foresee a complete change of direction, but a less conflicting, less ideological approach and more bound to relations with the West.

Given the difficulties that have marked Russian relations with the United States and Europe in recent years, the desire to lower tensions and spending is understandable. But the impact of the global economic crisis on Russian foreign policy is not exhausted. Russian leaders have repeatedly said that they see the crisis as part of a major change in the international balance of power. 

Russia wants to be a member of the growing power group and it has found that reaching agreement with China can be just as difficult as with the West. Russian and political entrepreneurs, hoping that access to Chinese capital can alleviate their economic problems.

Strategic adjustments are high policy issues for Russian

There has been no reputation of liberal politicians and few suggestions that Russia should pursue a “third path”, much less wall out of the world economy.

Unlike most other countries, Russia can always use its arms exports as a means of refining commercial offers. At a time when Russian economic needs are particularly large, however, its customers may strive to seek more advanced equipment than those offered in the recent past. A prolonged economic crisis will surely inspire many within the Russian defense industry to ask for a review of this policy.

All of these strategic adjustments – in spending on defense, arms control, pipeline construction, and arms exports – are high policy issues for Russia’s leadership. 

Before the current crisis struck, Russian leaders believed that rapid economic growth was shifting the balance of global power in their favor. The crisis, they fear, may have an even more dramatic impact on the international pecking order – and deny them the ground they have acquired in this decade.

 

 

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