MOSCOW (Pakistan Point News / Sputnik - 17th June, 2020) Russia's Security Council Deputy Chairman Dmitry Medvedev expressed the belief that the decrease in oil prices, export reduction and domestic restrictions imposed to curb the coronavirus were the main shocks for the country's economy in 2020.
In his article for "Russia in Global Affairs" magazine, Medvedev assessed the falling global oil prices as the "biggest shock," pointing to the country's dependence on hydrocarbon exports.
The high-ranking official recalled, however, that Russia had survived similar blows three rimes over the past 20 years and was, therefore, capable of efficiently alleviating the consequences.
"The main blow is expected to come in 2020. In 2021, the economy will adapt to the new circumstances, regardless of the oil price," Medvedev said.
According to Medvedev, the second shock � COVID-19 restrictions � is "unprecedented" and to some extent resembles the situation in the early 1990s, "when individual economic agents dropped out of the economic process, thus severing existing ties."
"But this comparison works only partly, to say the least. The current problems in the real sector of the economy, the labour market, the social sphere and the banking sector are unprecedented in their nature, and standard approaches to analysing economic and financial crises are not applicable here." Medvedev went on to say, expressing the belief that the the economic recovery could start soon after restrictions lift.
Commenting on the third shock � the decreasing foreign demand for Russian goods due to the global economy slowdown, Medvedev compared the situation to the 2008-2009 crisis.
"The current reduction in global trade and demand is also largely due to restrictive measures and temporary rupture of economic and logistics ties. Therefore, the duration of this fall may be limited to the duration of strict quarantine measures, after which the demand will recover. Here, too, there's a threat of a new outbreak of the pandemic, which can inflict a debilitating blow to the global economy that can only be compared to a world war," Medvedev explained.
As foreign countries face quite a high risk of a new financial crisis in 2021, Russia should be ready for a further export decrease, the deputy chairman of the Security Council said, stressing the need for an anti-crisis plan.
In his article, Medvedev also outlined several socioeconomical policy principles for the first stage of opening of the economy: gradual restrictions lifting, a focus on the health care system, labor legislation reforms, "efforts designed to stimulate the supply, primarily, by reducing the cost of doing business" and, finally, the maximum possible preservation of budgetary obligations.
