It is ironic when one of the West’s failed monetary structures chooses to give monetary or economic advice to sovereign country, but even more so when they decide to do it to a nation that is both prospering and dominating its region. But that is exactly what the IMF did on May 19 when the IMF returned from a recent visit to Moscow.
Russia needs to launch further structural reforms to diversify the country's economy and reduce dependence on commodity exports, the International Monetary Fund (IMF) said Friday.
Russia has undertaken a number of efforts to mitigate the outfall of its recent two-year recession, Western sanctions and the slump in oil prices. This included budget cuts, a tight monetary policy, purging the country's banking system of weaker players and initiating an import substitution program.
"These policies need to be supplemented with structural reforms that lift potential output and accelerate convergence towards per capita income levels of advanced economies. So far, the more competitive exchange rate has not ignited a robust response from non-traditional sectors of the economy and a new growth model that is less dependent on commodities has yet to emerge," the 2017 IMF Article IV mission to Russia said in a statement following its visit to Moscow.
The IMF pointed out that Russia had already privatized some state-owned companies and "purged weak banks from the financial system," though it was necessary to increase investment and productivity.
Russian authorities should also expand the number of preferential trade agreements signed with other states and consider implementing a pension reform which would include increasing the statutory retirement age. – Sputnik News
Russia’s GDP grew .5% in the first quarter of 2017, and followed another positive quarter at the end of 2016. And the outlook for the Eurasian power continues to be positive despite the sharp decrease in the price of oil which is the mainstay of their economy. And when you realize that Russia has virtually no debt, nominal reserves in U.S. Treasuries and massive reserves in physical gold, they are in fact one of the best positioned economies in the world right now which makes the IMF’s assessment extremely hypocritical since over the past eight years the global bank has been impotent in aiding a much smaller economy like Greece within the European Union.
Through its ties with China, and especially the burgeoning Belt and Road project, economic growth for Russia will only increase as they are expected to be the primary energy source in the expansion of trade all across Asia, Eurasia, the Middle East, and in Africa. And while Europe continues to flounder with high unemployment, austerity, and dwindling growth, all signals point towards the future being one of Sino-Russo dominance, with the IMF soon to be replaced by the works of the Asian Infrastructure and Investment Bank (AIIB).
Like the Federal Reserve bank in the U.S., the IMF has a horrific track record of forecasting and advice, and even more so when trying to implement monetary policy in a given country or region. Thus last week’s forecast and outlook by the IMF in regards to Russia is in large part one of the major problems as to why both Europe and the U.S. are declining in economic power, and why the future continues to shine for Eurasia and its brother economy in China.