Russia's economy, which staged a recovery after the collapse of August 1998, is now showing signs of slowing growth and rising inflation, according to Mr Sergei Stepashin, chairman of Russia's audit chamber.
"Reserves of production growth, which resulted from the rouble devaluation, are close to exhaustion. If the foreign economic situation changes, oil prices drop and the positive foreign trade balance reduces, the problem of meeting the budget targets may grow acute and the business climate in the country may worsen," the former prime minister told a conference on transition to the market.
A large group of Russian politicians and industrialists, including the chairman of Russia's central bank, Mr Viktor Gerashchenko, representatives of the administration of President Putin and of several Russian government ministries attended the conference in Dublin at the weekend. More than 100 Russian delegates attended and were also addressed by the Tanaiste, Ms Harney, and the Irish Ambassador to Russia, Mr David Donoghue.
In an interview with The Irish Times, Mr Stepashin, whose position corresponds to that of the Comptroller and Auditor General in Ireland, confirmed that there were now indications that Russia's economy was entering a vulnerable stage. But he rejected calls for the introduction of a Pinochet-style regime which would provide the necessary "stability" for economic development.
The government's role was to provide a solid legal basis which corresponded to the principles of the Council of Europe. "It is important not to have the state control that is felt by everybody, but to ensure there is a low level of criminality in our country," he said.
He stressed that oil prices were not the only factor which contributed to Russia's return from the brink of bankruptcy and that, therefore, a reduction in those prices would not serve to destroy the economy. The crisis had its positive elements. The Russian muzhik (peasant) would, according to proverb, do nothing unless "he is bitten on the behind by a fried cockerel". August 1998 stirred Russia and its economy into action. Another positive development from the crisis, Mr Stepashin said, was that it showed up very vividly the system's weak points.
