11.03.09

The effects of the on-going crisis may prove far worse for most of the CIS countries, that for other, more advanced economies, and their recovery period, much longer, the chief of the CIS economic cooperation department at the Economic Development Ministry, Sergei Chernyshev, told a forum of CIS business leaders on Friday.

The Economic Development Ministry's press-service quotes Chernyshev as saying that at a time when the price situation is getting worse, the influx of foreign capital has run dry and cash transfers by labor migrants have reduced, the economic situation in the CIS space in the near future will be getting worse.

The measures some CIS governments have taken already include tighter monetary policies and cuts in budget spending and investments into the real sector. These measures may harm the financing of projects Russian investors are involved in.

Chernyshev pointed out that the conditions of the world crisis must be used for ensuring subsequent economic growth and development. In his opinion, in the current financial and economic situation on the world markets it will be important to tap the potential of integration associations for minimizing the effects of the crisis, and such work is already underway within the CIS and the Eurasian Economic Community.

As a fresh example of such practical steps in this field he pointed to the creation of the EurAzEC anti-crisis fund, and also the high technologies center of the Eurasian Economic Community. Within the framework of the CIS the Commonwealth's finance ministers have been holding meetings to monitor the situation and to devise anti-crisis measures.

Prime-Tass quotes Chernyshev as saying that last year most CIS member-states showed lower macroeconomic parameters than in the previous year. According to the CIS statistics committee, the Commonwealth's gross domestic product was up by 5 percent on the average (in contrast to 8.5 percent growth in 2007), industrial production, by 2 percent (7 percent in 2007) and investments into the fixed capital, by 10 percent (21 percent).

The crisis influences the condition of mutual trade, too. Month-by-month analysis of the 4th quarter dynamics indicated a slowdown in the export and import between Russia and the CIS member-states. Russia's foreign trade with the CIS countries was up by 29 percent on the year to 106.5 billion dollars. However, most of the growth occurred in the first three quarters of 2008. In January 2009 one should expect a considerable decline in rates, Chenyshev said.

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Source: Itar-Tass