Russia Forum Buzz: Speech of Igor Shuvalov, First Deputy Prime Minister of the Russian Federation

April 19, 2013


Igor Shuvalov answered questions asked by guests of the Russia Forum. The questions covered the most important topics of the Russian economy, and Mr Shuvalov formulated his vision of the country’s development. The First Deputy Prime Minister said that the government is not satisfied with the pace of economic growth, though the current situation is very far from a recession. Slowing economic growth is related to some extent to the weak performance of the global economy. However, he sees no need for an immediate reaction from the government in the form of fiscal stimulus. Low inflation is still the priority. The government may reallocate budget expenditures in favor of more strategically important items, but a substantial increase in the total amount of expenditures is not expected. The Russian stock market is not performing well despite the fact that the oil price is high and the economy has been growing since 2010. Mr Shuvalov admitted to some problems in corporate governance, but pointed to the fact this was not only a problem at state companies. In this context, he asked that investors not blame the government solely for any problems in the institutional sphere. The situation cannot be improved until ordinary Russians themselves break formal and informal rules.

Mr Shuvalov stressed that the government managed to tackle a lot of pressing issues while oil prices were high, including poverty, social security and creating a middle class. The country has achieved a lot, and the society expects this progress in the economic and institutional sphere to continue.

The Cyprus saga demonstrated the fact that no place in the world can be considered a safe haven. Interestingly, Russia looks like a more comfortable and safe place for investment than many destinations that were popular in the past. Mr Shuvalov thinks that the question about an amnesty on repatriated capital may be raised again.

Much time was missed in the past and not a lot was done to stimulate the export of technological goods from Russia. However, this mechanism has started working. Mr Shuvalov referred to the Russian Direct Investment Fund as an example of how industrial policy is being put into action.