Russian economy “goes back 20 or 30 years”

Russia’s economy “goes back 20 or 30 years,” said Vladimir Putin, who was banished to France by a former economic adviser to the Russian government, saying he was endangering the future of his administration by attacking Ukraine. He said in an interview with Sergei Guriev.

“Putin succeeded in destroying the Russian economy in a few weeks,” said the former Chief Economist of the European Bank for Reconstruction and Development (EBRD), now a professor at Science Po in Paris. He predicts that Russia’s “huge recession” and “probable” defaults will come due to the sanctions imposed on the country by the West.

Sergei Griev, a former economic adviser to the Russian government in the early 2010s and a former board member of Sberbank, Russia’s leading bank, felt threatened by authorities for his speech and intimacy with the former. , Left the country in 2013. Mikhail Khodorkovsky, CEO of the Yukos company and opponent of the Kremlin, was imprisoned in 2003.

According to Sergei Guliyev, “The (Russian) economy has been stagnant for the past eight years, but what we are facing is that the Russian economy is in terms of household income and the structure of the economy. So it will go back 20 or 30 years ago.

“It’s hard to imagine how many years it will take to return to 2021 GDP levels,” he continued, referring to “not comparable to Ukrainian dramas, but all the same tragedy.”

Politically, Sergei Guriev believes that Vladimir Putin “shortened the life expectancy of his administration” due to a “miscalculated” attack on Ukraine: Vladimir Putin “misinformation” He was the “given” president and “overestimated the power of the Russian army, underestimated the Ukrainian determination, and underestimated the Western unity.

“Completely unknown area”

Since Russia’s invasion of Ukraine on February 24, Western countries have responded with economic sanctions on the trading capacity of central banks, Russian imports, oligarchs’ property and commercial banks.

The effects of these measures, in addition to the effects of the withdrawal of many private companies, are now very difficult to quantify. Agency S & P Global recently predicted a 6.2% reduction in GDP in 2022, but the magnitude of the shock could be much greater, Sergei Guliyev warns.

“We are in a completely unknown territory,” he says. “Russia has been integrated into the world’s economic system. Decoupling breaks a lot. How would the economy be without Taiwan’s semiconductors or the maintenance of Boeing planes and Airbus? I don’t know if it works, he warns.

Fraudulent contractor

“For many entrepreneurs, it’s the end of a lifelong project,” said an economist who faced the collapse of the ruble and the withdrawal of many talents from the country.

“Imagine building a business in the last 20 or 30 years. Today you can no longer access your partner, you can no longer borrow from a bank and the interest rate is 20% Beyond, you can neither export nor invest, “he says.

However, there is no doubt that it will slow down the flow of sanctions. He believes that if the purpose of these sanctions is to stop Mr Putin’s war, Europe has no choice but to stop buying Russian oil.

The inability to stop European imports of gas, which certain countries refuse due to their very strong reliance on Russia’s supply, has triggered a European oil embargo on the resources available to Moscow, triggered by that of the United States. Will give a big blow. According to him, he will fund the war.

If all Western nations participate, it “encourages China to obey them in an oil embargo,” and “takes resources to continue his brutal war (Vladimir Putin),” he says.

Nobel laureate Joseph Stiglitz called for a European-wide embargo on gas and oil in an interview with AFP on Tuesday.