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Andrey Kostin: «We have to build a new economy and new technologies»


Andrey Kostin talks with CNN TV channel about the Eurozone debt crisis its impact on Russia both in the near and medium term 

Андрей КостинHOST: How the Eurozone debt crisis will impact Russia in both the near and medium term?

ANDREY KOSTIN: Somehow, the problem of Greece will be handled in the short-term, but I still see a lot of problems in the mid-term with other debts, like Spain or Portugal. And I don’t think that Europe will be doing quite well even if those countries stay within the European Union. And frankly speaking, I don’t know whether it’s better for them to stay or not, though, of course, our estimations say that Greece will have an immediate negative effect on the Russian economy, on the Russian GDP growth and so on, and so forth.

HOST: Is the foreign direct investment and the domestic capital enough to spark that next wave of growth beyond energy, because this is what people are looking for?

ANDREY KOSTIN: Not quite. In Russia, we don’t have enough domestic resources to do it, so whether we want it or not, we have to invite broader participation of international investors. We should do it, if we want to build up a new economy, and even new technology in the old industries like oil. Unless Russia does it, I think, it will be extremely, we always have concerns about oil prices, about aluminum prices. We have to build a new economy, diversify it, and of course, build new technologies, and that’s the challenge for Mr. Putin for the next term.

HOST: If we’ve seen a doubling of the per capita GDP in ten years, but the percolating of the middle class is very frustrating, what is the best way to remedy it? It does not look like the solutions have come fast enough to appease those who have actually hit the street, is what I am saying.

ANDREY KOSTIN: Аs one of the largest lenders inside Russia, we know that it is growing, but still, of course, if you compare with other economies, American economy or even European, you see that it is still a very limited sector. I agree with you, that’s another very important issue, but I think, privatization plus the special focus on actually demonopolizing the sectors of the economy and creating more private businesses, I think, that’s the answer for this issue.


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