Palms & Company Document
WHAT'S NEW -----
About The Portal To Russia
-----
Email Dr. Palms
Russian Finance Minister's Opinion of Rusian Economy
by
Dr. Pyotr Johannevich van de Waal-Palms
Sovetnik Pravitelstva CWA, Tovarichestvo Palmsa, Inc.
Investment Bankers. Washington, United States of America.
From russia@accessone.comTue Apr 2 15:54:34 1996
Date: Mon, 1 Apr 1996 14:23:14 -0800 (PST)
From: American Bank USA <russia@accessone.com>
Reply to: palmport-list@PeterPalms.com
To: palmport-list@PeterPalms.com
Subject: Former Russian Finance Minister describes economy of Russia:
Do Russian officials agree with the consensus of palmport-list members?
Boris Fedorov Finance Minister of Russia 1992-1994, 1991-1992 affiliated
with EBRD, Oct-Dec 1992 Russian Federation Director for the World Bank,
and currently elected Deputy to the Russian Federation's legislature band
leader of "Forward, Russia!, was recently quoted in an interview with
IMApress in Russia as follows:
- "At the beginning of the year we will see the usual jump in inflation"."
No real improvement is evident in the economy.". Inflation was higher
in 1995 than in 1994".
- "I do not foresee a major increase in business activity".
- "Unemployment will continue to rise".
- "The government will attempt to sell the final blocks of stock
in state enterprises at ridiculously low prices. This kind of privatization
does not make much sense. There has been minimal improvement in efficiency
following privatization".
- "The budget is falling apart. At least 40% of the budget deficit
is being financed simply by printing more money".
- "All attempts to manipulate the budget or come up with favorable
numbers for currency in circulation without special emphasis on incentives
for manufacturing, investments and consumer savings are doomed to failure".
- The artificial restraint of the exchange rate is based not on qualitative
improvements in the economic situation but on manipulation of purely financial
levers. However it makes no sense to oppose the market for long because
sooner or later the reserves will run dry".
- Government economists are mistaken about the effectiveness of a fixed
rate of exchange as a means of achieving financial stability in a country
like Russia where foreign trade accounts for only 5-6% of the GDP".
- "Fixing the exchange rate while inflation is still rising, has
a negative impact on exports. Domestic prices were 35-37% of world price
levels at the beginning of 1994 and rose to 52-53% in early 1995. If prices
triple again without a change in exchange rate it may mean simply closing
down export enterprises because they aren't competitive".
- "It's not necessary to invite Nobel laureates from America to
establish basic order".
- Only 2% of foreign investment that might in theory be invested in Russia
is currently being invested. We should expect nothing more until the political
situation in Russia improves and it becomes possible to forecast circumstances.
Loans from EBRD have not as yet yielded any appreciable return".
- "I am more attracted to the idea of a political union involving
Ukraine, Belarus and Russia".
- I think it will be possible for Russia to overtake and surpass the
standard of living of Spain, Portugal and Greece within a decade".
Subscribers to palmport-list are referred to the Feb 1996 issue of "The
Russian Magazine" for a complete copy of the article in English and
Russian. E-mail address <info@rmag.com> or <editor@rmag.com>.Palms
& Company, Inc., Investment Bankers, USA. <palms@PeterPalms.com> World
Wide Web: 500 Megabyte Data Base plus 7000 URLS: Russia - The Baltics -
Central Eurasia - The Former Soviet Union http://www.peterpalms.com
To subscribe discussion group send message to: <listproc@PeterPalms.com>
In message text type: subscribe palmport-list <your e-mail address or
name>
Go to TOP of this page
RETURN to Palms' Lobby
RETURN TO HOME PAGE
Palms & Company, Inc., Investment Bankers (1934-1997): Palms
Palms Bayshore Building, 6421 Lake Washington Boluevard Northeast, Kirkland, (Seattle), State
of Washington, United States of America, 98033-6876;
http://www.peterpalms.com
Phone: 1-425-828-6774 & 1-425-827-5528
Copyright 1995, Palms and Company, Inc.; all rights reserved; email: palms@PeterPalms.com
Date last Revised: September 10, 1997