Russia may share economic situation of most countries by 2011

Russia has said that the country's economic situation may follow the pattern of many other faltering nations by next year, and will have to carry out some corrective measures because its "advantages are fading away."
    
"Russia starts to live like other counties do, but Russia has risks of lowering oil prices, though," Finance Minister Alexei Kudrin told the Vedomosti business daily yesterday . "Our advantages are fading away, and we should realise this truth."
   
"The government has carried out its main task to dump the situation," he said.
   
The Reserve Fund will expire next year, he added.
   
"There will remain a small reserve of the National Wealth Fund, but it would not be wise to spend it as it has been established to smooth out the revenues of the Pension Fund affected by the demographic problem," Kudrin said.
   
The world economy faces "the crisis of globalisation," and "the architecture of the world market and regulations is changing nowadays," he said.
   
"We witness how the regulation of euro is being tested now," Kudrin said. "The EU will work out immediate instruments to protect euro, and later on, they will use long-term protecting instruments, and strictly regulated macroeconomic, fiscal and taxation policies."
   
"Our production per capita is twice less than in other countries, and we have an imperfect structure of the economy, state governance, agriculture, industry or services," he said.
    
"The very environment is imperfect. Other countries with well-developed environment will find it easier to revive their economies. Our dependence on natural resources worsens the situation. This is a most volatile sector of the world economy. Prices may change twice a month sometimes."
   
"Knowing all these drawbacks, we should undertake much more strict measures than other countries will use," Kudrin said.
   
"In other countries, budget deficits may be three percent, while we should have a deficit of one or even zero percent," he said. "This may be possible only if oil prices remain stable at about 50-60 dollars a barrel."
   
"A big deficit will multiply our risks, because a big deficit , the expenses to support the economy, will rather damage the economy," he said. "A deficit will damage investments and loan rates."
   
Kudrin answered the question if taxes may be raised in near future, saying that this scenario may be possible.
   
"Even the responsibilities we have now and our desire to continue the programmes we have started, may require extra fiscal burden," he explained. "However, we are not working on this as yet."