Russia’s President Vladimir Putin took part in the first Eastern Economic Forum in Vladivostok. His assessment of the current situation in the Russian economy was one of the key issues of his inaugural speech. In particular, Vladimir Putin explained why he sees nothing dramatic in high volatility in energy prices which is a painful issue for Russian nationals. Besides, answering journalists’ questions, the President stated his viewpoint on the Russian economic outlook and a slump in global crude prices. “I think this is all a natural process,” he commented on the recent developments on the oil market. “As for the volatile prices for energy resources, our traditional export goods, yes, this is happening, but this is not within our control. It depends on processes taking place in the global economy as a whole and on the Asian markets,” the President stated. However, his statements could be judged with a pinch of salt. Isn’t it strange that being the top global energy exporter, Russia is incapable of exerting its influence on oil pricing? Another thing, in his speech the Russian leader approved the decision on going over to a one-year budget. “I think it perfectly justified that the Government is moving over to an annual budget in this situation, because in these conditions it is harder or even impossible to predict exactly how global markets will behave and how this will affect federal and regional budget revenue. I will ask the Parliament to support this approach,” the President said, apparently defying efficiency of economic analysis. Previously, the public budget has been made on a three-year basis. All we can do is wait and see in the hope that the dubious solution will bear fruit, though the principle “to live from day to day” is not appropriate for any economy.
