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Crimea Worsens Economic Crisis

Published: April 30, 2014 (Issue # 1808)


It is no simple task foreconomists tocalculate thecosts ofRussias current foreign policy course, thelosses resulting fromfrightened investors andcreditors andthe damage that sanctions will cause. Some claim that any lack ofenthusiasm forthe economy however justifiable is patently unpatriotic. Others hold just theopposite view, condemning any attempt topropose this or that economic policy given theposition inwhich Russia now finds itself.

Before seizing Crimea, thegovernment should have done more toreduce corruption andimprove theclimate forbusinesses andforeign investors. Theevents inCrimea andeastern Ukraine make both foreign anddomestic investors even more skittish. They also lower Russians faith inthe ruble andin Russian banks.

There is now aneven greater need toimprove theenvironment forbusiness andinvestors. Thequestions Russias leaders need toask themselves are: How can we give businesspeople more investment opportunities? How can we facilitate technology transfer given theworsening situation?

Under thecurrent circumstances, Russia must focus onachieving aradical reduction inthe bureaucracy forbusinesses bysimplifying all procedures. Forstarters, Moscow could simplify therules forobtaining aRussian visa andwaive theneed forcertification if imported products have already been certified inthe U.S. or theEuropean Union.

Instead, it seems that authorities are competing with each other tosee who can do themost harm tothe economy. One top Russian official proposed selling off thecountrys dollar andeuro reserves without explaining how they would be replaced. Perhaps he would prefer theyen andyuan. But aquick look atthe currencies preferred bythe central banks ofother countries is enough toshow that they are far less reliable. Maybe he feels Russia should keep its money ingold.

Forevery difficult andcomplex situation, leaders should respond with better andmore responsible economic policy andnot just make matters worse.

Konstantin Sonin, acolumnist forVedomosti, is Professor ofEconomics andVice Rector atthe Higher School ofEconomics inMoscow.





 


ALL ABOUT TOWN

Friday, Aug. 29


Park Pobedy will feature the sights and sounds of the world outside of Russia during the Open Art International Festival today. Taste foreign cuisine, learn how to make tea like the Chinese or relax in a hammock during the free event. Although entrance is free, you must register beforehand if you wish to attend.



Saturday, Aug. 30


Break out the tweed and channel your inner Englishman during the English Hunt Picnic this afternoon organized by the Bagmut stables from Krasny Bor in the Leningrad Oblast. Equestrian stunts, English archery and classic hunting fashion will all be available to visitors hoping to live like the characters in Downton Abbey if only for a day. Tickets for the event cost 7,900 rubles ($219.40).


Bookworms will have their chance to swap out well-read classics for something new for their bookshelves at Knigovorot, a free book exchange that will be held in the Yusupov Garden on Sadovaya Ulitsa today. Come for the chance to get a new book or take the opportunity to discuss the literary merits of your favorite authors with fellow fans.



Sunday, Aug. 31


The Neva Delta International Blues Festival wraps up this afternoon on Vasilevsky Island with a concert featuring not only some of Russias best blues bands but international stars as well. Admission is free for all three days of the festival, which begins on Aug. 29, and the shows starting at 5 p.m. each day.



Monday, Sept. 1


Today marks the beginning of Lermontov-Fest, a fall festival celebrating the life of one of Russias most remarkable poets who, in a fate eerily similar to Pushkins, was killed in a duel at the age of 26. Organized by the Lermontov Library System, the next several months will see art exhibitions, concerts and public lectures focusing on the Lermontovs short yet prolific career. Check the Lermontov Library Systems website for more details.



Tuesday, Sept. 2


Join expats and practice your Russian during the Russian Clubs weekly meetings every Tuesday night at 7:30 p.m. The club is free to participate in although you need to be a registered member of Couchsurfing.



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