Russia should help create new rules of world economy

In his recent video blog post Russia's President, Dmitry Medvedev, has addressed the global economic crisis and its impact on Russia.


I would to talk about something that is worrying the entire world these days: the global financial crisis. Most countries have faced the fact that grave mistakes made by a number of states (America being the first among them) have led to serious problems. The power of America's financial market and its impact on the global economy is great. This is why the crisis that stemmed in the USA has ricocheted on the economies of almost every country.

If this had happened five or seven years ago, the crisis would probably have had less impact on Russia. Today, the situation is different: we are a country with an open economy. On the one hand, it gives us enormous advantages; on the other, it forces us to react and tackle the problems that all other major powers are facing. Today, they are all working on one problem: how to go through the global financial crisis with minimal losses.

What is going on in the world? A rapid decrease in credit availability leads to reduced demand; sales markets are shrinking; utilisation of production facilities is going down, causing job losses, which leads to yet further recession in demand. Investment programs are being suspended, and production expansion plans are being frozen.

Let me tell you frankly: Russia has not yet got into this gloomy turmoil. And it can avoid it. It must avoid it.

Governments and central banks of the world's major states are making great efforts now to stabilise the situation and provide economies with necessary resources. We, too, have taken a number of steps to restore confidence in the finance sector and ensure normal crediting. Besides, moves have been made to ensure stable development of retail trade, agriculture, the construction and machine industry, the defence industry, and small businesses. Due to the slump in global demand and the impossibility of attracting credits in previous amounts, these spheres require our immediate support. Our actions are aimed at mitigating the above-mentioned negative factors.

The gold reserves and the Stabilisation Fund were created exactly for such times of trouble. We have a chance to avoid currency, banking, or debt crises and go through today's troubles without losing the potential we have accumulated.

However, today we should not only protect ourselves from problems. It is important that we get the maximum out of the emerging opportunities, of which there are many.

First, the forming of highly competitive companies is bound to begin. They will appear, among other ways, by way of consolidating assets in various economy sectors, including the banking sector, retail trade, and construction. We will be ready to take the necessary measures and provide additional financing for those purposes. Stability of development in those spheres will help create new jobs.

Second, financial organisations must become more efficient and pay more attention to their reliability indices. This will boost the stability of our banking sector in general and make it more appealing to investors.

Third, falling demand will force Russian companies to cut down production expenses. It is vital, then, to make their business operations, technologies, and management as state-of-the-art as possible. Therefore, energy and labour efficiency may go up to a level that will allow competing with the best international companies. The state is going to support the creation of efficient jobs, tax incentives for innovations, and staff training initiatives.

Fourth, the current situation must be used to further modernise the spheres in which we have been slow. This applies to education and healthcare, judicial reform, technical regulations, and the migration to digital technologies.

And last, we must actively participate in the setting of new rules of play in the world economy to ensure maximum advantages for ourselves and for the promotion of a new ideology that will provide for a democratic and sustainable financial architecture in the world. There should be more financial centres, more reserve currencies, more collective decision-making mechanisms (I have spoken many times about that). This is good both for us and for all our partners.

On November the 15th, leaders of major states will meet in Washington to discuss all these issues. Russia is determined to actively promote its ideas.

In the end, I would like to say how I am going to develop my video blog. Of course, I have seen your responses to my first entry of October 7, on which many of you wanted to comment. I think that this reaction is the best response I could have received. Thank you for your willingness to discuss, responsibly and with great involvement, the subjects that are important to our entire community.

This is very good and we are going to work further on interactive communication. But please understand: it is difficult to process huge amounts of incoming data. Since we are very serious about this project - at least as serious as you are - we must prepare properly. However, you can write to me even now, at this website.

Watch video:

Previous article on the topic:
Video blog of Russian President

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