Putin says worst is over for Russian economy

16th April 2015, Comments 0 comments

President Vladimir Putin said Thursday the worst was over for Russia's crisis-hit economy as he shrugged off widespread concerns over the impact of the Ukraine crisis in his annual phone-in.

Russians from around the country sent in questions in record numbers with many focusing on current financial hardships during the four-hour show.

But Putin played down the economic troubles and sought to portray Western sanctions over Ukraine as a blessing in disguise.

"In fact, these sanctions only helped the government and the Central Bank," a bullish Putin said.

The Kremlin strongman, who in March marked 15 years as president, fielded questions from farmers, grandmothers and children with a confident demeanour and the occasional smile.

Organisers of the phone-in said the president received some three million questions, although this year's televised session appeared to lack the razzmatazz of Putin's past phone-ins.

Predictably, concerns about the spiralling cost of living dominated his 13th Q & A.

Putin painted a rosy picture, saying the ruble exchange rate would have changed irrespective of sanctions, calling it "an element of revitalising our economy".

- 'Peak of problems passed' -

"The ruble has stabilised and strengthened," said the Kremlin chief.

"Experts believe that we have passed the peak of the problems.

"Nothing burst and everything is working," he added.

Following the shock collapse in the ruble late last year, the currency has bounced back to a five-month high as fighting in eastern Ukraine has waned and oil prices have steadied.

The ruble pushed below the psychologically important threshold of 50 rubles per dollar on Wednesday, its most robust level since November.

Putin touted his government's 2.3 trillion ruble plan to turn around the economy, saying they had performed a "highly professional task".

He downplayed soaring inflation, unemployment and capital flight -- estimated at more than $100 billion last year -- saying it was not "catastrophic".

However former finance minister Alexei Kudrin, who is still believed to have Putin's ear, challenged the strongman in an apparently choreographed exchange.

Russia's economy risked lagging behind the rest of the world, said Kudrin who was sacked after a dispute over the government's plan to increase military spending in 2011.

"The new model of growth has outlived itself and a new one is nowhere in sight," he said.

Putin promised Russians last year that the economy would bounce back in two years but said on Thursday that the recovery could happen sooner.

He said, however, that Russians should not expect the lifting of Western sanctions anytime soon.

"It's all about using all of this to our advantage," he said.

Russia has been under sanctions from the West ever since Moscow annexed Crimea from Ukraine last March and was then accused of supporting militants fighting Kiev forces in eastern Ukraine.

The worsened economic outlook presented a serious challenge for Putin, whose pact with voters has been based on years of economic stability and relative prosperity underpinned by high oil prices.

The crisis has hit Russians hard but has so far failed to affect the sky-high approval ratings of a leader who many across Russia praise for standing up to the West and raising the country's international profile.

But Kremlin critics have warned of the brewing discontent over growing unemployment and shrinking salaries and pensions, and accused authorities and state television of deliberately downplaying the scope of the problem.

- 'Imposed Soviet model' -

On Wednesday, six Russians went on hunger strike in Moscow to draw attention to the plight of dollar-mortgage holders.

Tens of thousands of Russians who had taken on lower-interest foreign currency-denominated mortgages in the years before the financial crisis, are now unable to repay the debt because of the weakened ruble.

Putin said holders of foreign-currency mortgages should be helped but not at the expense of those who took out ruble-denominated loans.

Despite the current standoff with the West over the Ukraine crisis Putin insisted that Russia had no enemies in the international community.

He stressed however that Moscow was focused on bolstering its military might and demanded the West take Russia's interests into account.

"The most important condition for restoring normal relations is respect for Russia and its interests," he said.

Putin also defended his decision to lift a ban on supplying S-300 missiles to Iran, and in a rare move admitted that the Soviet Union had sought to forcibly impose the Soviet model on Eastern Europe after World War II.

"After WWII we tried to impose our model of development on many Eastern European countries and did it by force," he said. "And there's nothing good about it."

"The Americans are acting in a similar way by trying to impose their model around the world," Putin said. "They will also fail."

© 2015 AFP

0 Comments To This Article