“Russian Economic Reports are a cornerstone of our regular analytical work on monitoring Russian economic developments and policy analysis. We hope that by focusing on facts and evidence - based policy analysis, they can provide a modest contribution to informed policy debate and, ultimately, better policy choices in the Russian Federation.” Klaus Roland, Country Director for Russia

“Despite the difficult economic and social conditions, Russia’s prudent fiscal policy and large fiscal reserves make it better prepared to deal with the impact of the crisis than in the past. But focusing policy response on supporting households is a win-win solution that achieves both objectives – cushioning the social impact and supporting domestic consumption.” Zeljko Bogetic, World Bank Lead Economist for Russia

This videoconference workshop offers an opportunity for professionals from the World Bank, Russian regional administrations and the expert community to discuss the key findings of Russian Economic Report No. 18. Released on March 30, 2009, this report features three components: (i) a review of the international environment, macroeconomic developments and outlook for Russia, (ii) an analysis of Russia’s fiscal policy response, and (iii) a summary of a larger study of poverty, inequality and vulnerability in the pre-crisis period.

The main findings of the Report suggest:

On the global and Russian economic outlook:

• The global outlook remains extremely uncertain, with declines in world global output and trade, very limited capital flows to developing countries this year and world oil prices in the US$40-50 range during 2009-10.
• As a result, Russia’s real GDP is likely to contract in 2009 by 4.5 percent, compared with the positive 5.6 percent growth in 2008. The fiscal surplus from last year will become a sizeable deficit.
• Unemployment could reach 12 percent by year end. This crisis threatens to undo some of the large poverty reduction gains of recent years

On Russia’s fiscal policy response:

• Russia’s early fiscal policy response has been larger than that of many other G-20 countries and greater than the internationally recommended 2 percent of GDP. Policy has so far focused on supporting the financial sector and enterprises, with rather limited support to households.
• With major social impact now unfolding, the focus of future policy should shift toward cushioning the impact on the poor and vulnerable. A modest, temporary increase in the three social protection programs (costing about 1 percent of GDP) focused on child allowance, unemployment benefits and low-end pensions––targeting some of the most vulnerable groups at risk of poverty—could provide significant cushion of the impact of the crisis on the poor.
• Also, addressing most critical infrastructure bottlenecks and providing support for small and medium businesses––with additional support even during the crisis––would help the economy in the recovery stage and benefit medium-term growth and diversification.

The video conference will begin at 14:00 Moscow time at the following participating locations:

• Kazan
• Krasnodar
• Khanty-Mansiysk
• Moscow
• Perm
• Tomsk
• Syktyvkar

Program Producers

Program Moderator: Mr. Luca Barbone, Director, Poverty Reduction and Economic Management Dept, Europe and Central Asia Region, World Bank;

Program Leader: Mr. Zeljko Bogetic, Lead Economist for the Russian Federation, World Bank

For additional information, please contact:

Gary Fine, ECA regional GDLN coordinator, gfine@worldbank.org, tel. +1 202 473 4741

Mikhail Bunchuk, GDLN coordinator for Russia and CIS, mbunchuk@worldbank.org, tel. +7 495 745 7000

Anastasia Khrustalyova, Workshop Coordinator, A.Hrustalyova2@csr.ru, tel. +7 916 925 2819

This program is delivered through GDLN, the Global Development Learning Network, a partnership of distance learning centers worldwide dedicated to development. The program is coordinated by the Center for Strategic Research, GDLN affiliate, Moscow, Russia.