With oil prices down more than 50 percent in the past year and still falling, the ruble having lost more than half its value, a recession looming and the country already dipping into its rainy-day funds, the Russian economy is in a race against time. But one would be hard pressed to grasp the depth of the troubles from the Kremlin`s prescriptions.
After the finance minister, Anton Siluanov, laid out the government`s long-promised “anti-crisis” package in a live broadcast on state television last week, economists unanimously dismissed as inadequate his laundry list of half-measures and a vague promise of a 10 percent budget cut.
Wide array of business owners, economists and former senior government officials said in the interviews that they expected the Kremlin to react to the crisis the way it had in 2008, the last time it faced a precipitous decline in oil prices – with disaster management, but no fundamental changes.
In 2008, oil prices quickly rebounded, as the effects of the financial crisis began to fade. But this time is likely to be different, energy experts say, and it may take year for prices to reach former levels. Russia, they say is simply not prepared – or perhaps is unable – to take the measures needed to stimulate economic growth to make up for lost oil revenue.