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Russia Economic Minister Maxim Oreshkin said today that Western economic sanctions no longer bite and at this point are just an irritant. He declared he expects the Russian economy to grow at 2% this year, a first since sanctions first took effect after the Russian annexation of the Crimean peninsula.
“There was a negative effect, it was a big one, but it is already behind us. … Of course without sanctions it will be even better,” he said to an interview with Associated Press. Oreshkin commented that trade with Asia is a priority and trade with the U.S. is very small.
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He said in Russia “we should concentrate on what we are doing domestically.” The Kremlin has made a big splash about sanctions actually helping Russian industry develop in the long run, forcing domestic production of certain items where imports were previously relied on. However, Oreshkin declared Russia is still too dependent on oil and gas.
“These days China is taking the first place in this competition…We see more willingness on the Asian side to work with us. We are working with those who want to work with us.”
Oreshkin is only 35 and is a rising star in Russian politics. He has been mentioned as a possible prime minister in the future. “I have a lot of work to do on my current job … I prefer to do what I have to do,” he said when asked about his future, reported Associated Press.
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The main problem with Western sanctions at the moment is access to capital. Many banks have had to be rescued by the Kremlin as their debt could not be rolled over in the face of the recession. Moscow has become creative to fill gaps with an essential repurchase agreement to Qatar for a stake in the Russian hydrocarbon crown jewel, Rosneft.
Russia has also privatized other industry in an effort to plug holes in the federal deficit.