Russia to prepare for financial crisis impact

President Vladimir Putin ordered his government Thursday to put aside billions of dollars in next year’s budget to protect Russia’s vulnerable economy in case of a new economic crisis. Putin, who has in recent months faced unprecedented street protests against his rule, said Russia’s main priority was to ensure economic stability despite its dangerous dependence on energy exports. “We must take into account any scenarios for the world and Russian economies and have the instruments and possibilities to react,” he told the government and members of parliament in an unusually stark warning of danger. “Therefore I ask you to put into the coming year’s budget enough reserves to realize anti-crisis measures, if, of course, the need arises,” he said on the Kremlin website. Putin did not give figures but Finance Minister Anton Siluanov said the government would already in 2012 have the right to spend 200 billion rubles ($6 billion) on anti-crisis measures. Siluanov had told Financial Times earlier this month that Russia was ready to build up a chest of $40 billion in the next year to combat the effects of an economic crisis, as Moscow nervously eyes the eurozone’s turbulence. Putin admitted that the government’s high-cost program of improving infrastructure in Russia, modernizing social services and reforming the military now needed to be implemented in “complicated conditions.” “The world economy is going through a period of turbulence and we need to be ready for any crisis,” he told the meeting on Russia’s budget policy. “Our main task is to preserve stability of the macroeconomy and the budget. It’s clear that the main risk is the high dependency on the fluctuations on global energy markets.” The Russian authorities are still haunted by the last financial crisis, which saw growth contract 7.9 percent in 2009 in a sudden end to the stellar growth rates that had marked the initial part of Putin’s 12 year rule. Economic Development Minister Andrei Belousov said that in the first quarter this year Russia enjoyed growth of 4.9 percent and growth was seen to be 4.0 percent in the second. Read more: http://dailystar.com.lb/Business/International/2012/Jun-29/178645-russia-to-prepare-for-financial-crisis-impact.ashx#ixzz1zCytC4Gk (The Daily Star :: Lebanon News :: http://www.dailystar.com.lb)