Accessibility links

Russia to Discuss Growth at World Economic Forum - 2002-01-31

A delegation of Russian government officials and private business leaders is in New York to take part in the World Economic Forum. They are looking for a chance to show off Russia's economic and political success of the past year.

The theme for the meeting in New York is "Leadership in Fragile Times: A Vision for a Shared Future" and Russian leaders want to make sure their country is a part of it.

Prime Minister Mikhail Kasyanov heads the delegation and will address the Forum during a plenary session on Sunday.

He is expected to say the Russian economy is rebounding and that the government is working to create a positive environment for investors.

Economic analysts here say there is reason to be optimistic.

"I think things are actually going extremely well," he said.

Alexei Moiseev is a senior economist with the private Renaissance Capital Investment Group in Moscow.

He says the most encouraging part of the picture is that the Russian economy is growing as a result of the government's tight fiscal policy and domestic demand.

"When the Russian economy started growing in 1999, the reason was strong external demand in the form of strong oil prices and strong metals prices. However, one can say that probably for the last year the Russian economy has been growing due to rapidly expanding domestic demand," Mr. Moiseev said.

Russia's economy grew by 8.2 percent in 2000. Last year, it slowed to about five percent. The government expects an increase of about four percent this year.

During this same time, wages have grown but the average monthly salary still amounts to only about $140. Even worse, doctors, teachers and pensioners subsist on the equivalent of about $50 a month.

For many Russians, considerations about the improved performance of the economy often have little meaning.

Seventy-year-old Klavdia Vasilieva used to work in the collective farm in Ozhogovo, a small village just 50 kilometers west of Moscow. Life for her has always been hard.

"We used to share the bread and you couldn't have taken an extra piece. My mom would divide the bread between us and give us some soup. These days, I eat bread, sometimes some soup, and when the money is left I can buy a little bit of butter. I can't afford meat," the old woman said.

Despite her difficult circumstances, Ms. Vasilieva says she is encouraged about the way things are going. She says pensions have recently been increased and she is getting by.

Economist Alexei Moiseev finds her attitude difficult to understand.

"Quite honestly I cannot understand how people can survive on this money. This is a ridiculously low level and what always amazes me is people somehow manage to survive," he said.

But people are surviving thanks to government subsidies left over from Soviet times.

The economic realities of everyday life are showing signs of improvement but Russia still has some convincing to do before it gets the international investment and development help it wants.

Russia first attended a World Economic Forum meeting in 1993 when Yeltsin-era reformers were the stars of the show winning over Westerners with their liberal ideas.

There is no such drama surrounding Russian participation this year. Prime Minister Mikhail Kasyanov says only that he hopes to provide the participants with an insight into what is going on in Russia and what the government's priorities are.

There will be a session at the World Economic Forum devoted specifically to Russia. After that it will be up to a group of senior Kremlin officials to convince investors that confidence in Russia is justified.