Russian “president” Dima Medvedev wrote about what he called the “global economic crisis on his blog on October 23, 2008. He blamed the United States entirely for causing the crisis, said Russia was only a minor victim and only because it had become open to the outside world, and said Russia would avoid any more serious consequences. He did not give a single specific statistic on any consequences Russia had experienced to that point, making no reference to the catastrophic decline in Russia’s stock market or the massive FOREX reserves Russia was expending, nor did he acknowledge that the Russian economy’s performance at that time was far worse than most other nations. He states: “We have taken a number of measures that should restore confidence in the near future in the financial sector and normal lending.”
Since then, the bottom has fallen out of Russia’s currency, reserves are down by half and the stock market has been virtually obliterated. Meanwhile, Medvedev has put up four additional posts: one about sports, one about what he does in a typical day, one about how students can finance education and one about his trip to Latin America. For more than three months, he has totally ignored the country’s economic status on his blog.
Here is Medvedev’s October 23rd blog post in full (staff translation, corrections welcome):
I would like to talk about what is now worrying the world – the global financial crisis. Most countries are faced with the fact that the gross errors – errors committed by several states (especially America) – have led to serious problems. The size of the U.S. financial market and its impact on the world economy is very high. That is why when the crisis happened in the U.S., the rebound hit the economies of almost all countries.
Five or seven years ago, the impact of this crisis might have been negligible in Russia. Now the situation is different: we are a country with an open economy. On the one hand, this gives us enormous advantages, on the other – it forces to react and deal with the problems faced by other leading states. Now everyone is focused on one problem: how to get through the global financial crisis with minimal losses.
What’s happening in the world? A sharp decline in the availability of credit has led to a drop in demand, markets are compressed, decreasing the use of production capacities and leading to the firing of workers, causing a new round of reduction in demand. Investment and expansion have been suspended.
I will say frankly: Russia has not yet experienced the worst effects of this crisis, and it has the ability to avoid doing so. It is imperative that we do not miss that chance.
Governments and central banks of leading countries in the world are now doing much to rehabilitate the situation, to ensure the necessary economic resources are available. We also have taken a number of measures that should restore confidence in the near future in the financial sector and normal lending. In addition, decisions have been taken aimed at the sustainable operation of the retail trade, agriculture, construction and engineering, the military-industrial complex and to support small businesses. These areas is our first call for support since they face the most immediate consequences of falling global demand and restricted credit. Our actions should largely offset these negative factors.
Gold and foreign exchange reserves and a stabilization fund have been created specifically for these difficult periods. And we have the opportunity to avoid currency, banking and debt crisis, to go through today’s difficulties without losing the capacity we have created.
But it is important not only to protect themselves from problems, but also to make maximum use of emerging opportunities, and much more.
First, we must begin building competitive companies, including by consolidating assets in various sectors of the economy (including banking, retail trade, construction). We will be ready to take the necessary measures and provide additional funding for this purpose. Sustainability of development in these areas will contribute to and create new jobs.
Secondly, financial institutions must become more efficient and give greater attention to indicators of reliability. This will improve the stability of our banking sector as a whole, will make it more attractive for investors and depositors.
And third, in the context of falling demand, Russian companies will reduce costs of production activities. And here it is important to quickly bring the structure of production, technology and management in the most modern look. Thus, energy efficiency and productivity can rise to the level that will compete with most successful foreign companies. State support and the creation of effective jobs and tax incentives for innovation, and retraining.
Lastly, we should use the current situation as an opportunity for modernization in those areas where we have acted too slowly, including education and healthcare, judicial reform, technical regulations, and digital technology.
And finally, we must actively participate in the formulation of new rules of the game in the world economy – in order to maximize benefits for ourselves and to advance a new ideology to ensure democracy and stability of the global financial architecture. There should be more financial centers, more reserve currencies, more mechanisms for collective decision-making (I have talked about this). And it is beneficial to all of us and all our partners.
On November 15th, the leaders of the leading states will meet in Washington to discuss these issues. Russia intends to actively promote its ideas.
In conclusion, I would like to tell you about my plan to build my video blog. Of course, I saw your response to the first entry from October 7. Many of you would like to leave your comments. I will work on this. Thank you for your interest and desire to responsibly discuss topics that are important for the whole of our society. It’s definitely a great idea, and we will develop interactivity as soon as we can. But please understand: it is difficult to handle large amounts of incoming information. As we take this very seriously – no less seriously than you have in any case – that we have to be technically ready to handle the matter. Meanwhile, by the way, you now can write to me – and do so through the site.
Thank you and all the best!