Minister of Economic Development Elvira Nabiullina
Photo: Dmitry Azarov
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Nabiullina Says Economic Model Shot
The economy model under which Russia has developed for the last several years has been exhausted, Minister of Economic Development Elvira Nabiullina has declared. RIA Novosti quotes her as saying that the world financial crisis makes the out-datedness of the model obvious. Nabiullina stated that the model was built around high oil prices and easy access to long foreign credits for banks and businesses. Neither of those conditions still exists, she noted.
The economy must be adapted to falling export income, which will unavoidably lead to a worsening balance of payments. In addition, Russia must seek its own sources of long-term credit, Nabiullina said. Production costs must be cut as well, she added, and the productivity of labor enhanced.
It has already been reported that a number of Russian companies have seen a production decrease and layoffs due to the world financial crisis. A number of Russian banks are on the brink of bankruptcy. The government has adopted a special anticrisis program that has made it possible to avoid some of a more serious decline in industry. Russian president Dmitry Medvedev has stated that about $200 billion will be spent to counteract the crisis.
www.kommersant.com
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