Ex-Finance Minister Kudrin does not believe in Russia's full isolation

Former Russian Finance Minister and member of the presidium of the presidential Economic Council Alexei Kudrin believes Russia is not facing full isolation because of the events in Ukraine and the U.S.' and the EU's sanctions.

Former Russian Finance Minister and member of the presidium of the presidential Economic Council Alexei Kudrin believes Russia is not facing full isolation because of the events in Ukraine and the U.S.' and the EU's sanctions.

"I don't believe in a scenario of full political or economic isolation. I don't think the things will go this far. After all, I hope we, as a country, and our leadership feel where this line is and where the damage will be significant for the economy. I am sure everyone is assessing this," Kudrin said in an interview shown in a Saturday TV program on REN-TV channel on Saturday.

"I think everyone will be looking for a political solution," Kudrin said.

The West's sanctions, due to which Russia might lose about $200 billion within the next two or three years, should not lead the country to an economic disaster, Kudrin said. "These are not disastrous losses, because Russia was through even more difficult moments just recently," he said.

Russia may lose one percent in GDP growth in 2014, which is 700 billion rubles, Kudrin said. "According to my estimates, we are already losing about one percent or perhaps 1.5 percent of GDP growth… But one percent is 700 billion rubles, which is as much as the state invested in the [Sochi] Olympics," Kudrin said.

Respectively, some kindergartens and roads will not be built and utilities infrastructure will not be repaired, Kudrin said. "And, respectively, the salaries will not grow, and the people's real income will not grow. We won't receive investments amounting to hundreds of billions of rubles this year," he said.

Kudrin suggested that formal sanctions against Russia may be not as costly as informal ones.

"As a matter of fact, Western banks are stopping to finance the Russian economy or invest in the Russian economy. Russian companies have also stopped opening new projects and, as a rule, they are completing the old ones. That is, we haven't yet even felt the principal losses from the situation that has taken shape. We will feel them in half a year or in a year, when it turns out that there is no economic activity toward expanding production. We will remain at the level that existed before this - and it's if the sanctions are not stepped up," Kudrin said.

Asked by the host what Russia will have to pay if it decides to provide financial assistance to the southeastern regions of Ukraine, Kudrin suggested that this will not happen, or otherwise such assistance could cost Russia another Sochi Olympics.

"I don't think that the government is analyzing Russia's active role in supporting the southeastern territories of Ukraine," he said.

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