World Economy

Russia Must Sell Technology to Overcome Current Crisis

Russia Must Sell Technology to Overcome Current Crisis Russia Must Sell Technology to Overcome Current Crisis

The current crisis in Russia is the perfect time for investment and creating a new model of development. Switching to technology exports would help the country overcome the crisis as fast as it can, speakers at the Gaidar Economic Forum in Moscow told RT.

Although the current geopolitical issues and the situation on the global oil market have created hard times for Russia, it should be born in mind that every crisis can be turned into an opportunity, says Professor Danica Purg, President of the IEDC-Bled School of Management in Slovenia.

“This crisis should be used for the fundamental restructuring of a mindset,” she said, “As important economically as it is, and as an intellectual potential you have, Russia could produce anything in the world. Russia should also pay much more attention to the management of technology.”

Talking about the risks of partnering with Russia she said now is the best time to start investing.

“Of course the uncertainty is big but you know what it is?” she said. “When it’s a big risk, it’s also a big return. I’m sure that some of the big companies who are courageous enough, and some people who are entrepreneurial enough, will continue to invest in Russia.”

“The trick is to sell technology,” believes Antonio Freitas, Vice President of Brazilian Getulio Vargas Fund. “Russia has the technology to produce products with value added, not to rely on oil and basic production.”

The crisis the Russian national currency is going through, may bring some positive effects in the long-term, says Santiago Iniguez, Dean of IE Business School in Spain.

“It’s a great opportunity now to invest in Russian assets.” he said. “There are some positive effects about this crisis of the ruble. Of course inflation has increased but what we are going to see in the medium and in the long-term is that there’ll be some sort of adjustment which is going to be in the long-run good for the Russian economy.”

He added that whenever there are differences between countries at the political level, it’s a perfect times to establish business links.

Russian Prime Minister Dmitry Medvedev said at the Gaidar Forum that the Russian economic model based on energy and raw materials is exhausted. He said the country should operate in a framework of the National Technology Initiative, which defines the most promising technological niches.

  Support for Ruble

The ruble’s rollercoaster path may be finally heading toward stability, according to the International Monetary Fund head of mission Bikas Joshi. The analyst applauds the government actions taken to quell the ruble’s sharp volatility.

After closing 2014 as the world’s second worst performing currency, the ruble is back on track, thanks to the government, Joshi told TASS in an interview Friday.

The ruble hit rock bottom against the dollar on December 16, when it lost more than 20 percent, with one dollar buying 80 rubles. After serious bank interventions and other measures, it has recovered to about 65 to the dollar.

After the crash, the Russian government ordered five major state-owned exporters, including Gazprom and Rosneft, to sell part of their foreign currency earnings to support the ruble, which added about $1 billion to the daily ruble market.

“It seems that the period of sharp ups and downs is coming to an end. The measures that were taken are beginning to work, that is the increase in the key rate, and support for the banking system, and the provision of foreign currency, and liquidity to market participants. All of this is supporting the ruble, and will probably be maintaining it in the future,” the IMF Resident Representative Office in Russian Federation said, as quoted by TASS.

Overall in 2014 the ruble lost 46 percent against the dollar, on par with the 50 percent fall in oil prices.