What's behind Russia's booming economy? | DW News

now to Russia where the St Petersburg International economic Forum once known as the Russian Davos has come to a close today the 3-day event was attended by representatives from 130 nations from Afghanistan to Zimbabwe it was also a sign that Russia's economy is growing despite a trench of Western sanctions the international monetary fund says its economy will grow over 3% this year let's bring in DW's Russia and Constantine edur in vus who joins us with more Constantine let me start by asking you about that projected growth 3% have sanctions failed well look all sanctions always work over a long time that's number one for an economy like like Russia which basically depends on Commodities uh for the sanctions to really bite in it will take a bit of time although they are biting in certain uh sectors like Aviation for example or the fact that Russia has to uh procure uh micro Electronics uh via so-called gray channels essentially Contraband that doesn't make things easy but the main thing the main reason for this growth is actually military production uh military Factor producing everything from boots to uh to to ammunition are working 24/7 and uh people are getting paid for that those who work in those uh factories and uh the government is printing money so I think we also should check this growth against the the fact that this is uh only the military industry that is uh basically growing massively and secondly uh the fact that over time and that's what U independent Russian economists are predicting um very soon Russians will feel the effects of infl because actually to push this production as well as to pay for the well essentially the mercenary Force that's now fighting in Ukraine uh the government has to print money and this is what's happening so I would be quite circumspect about saying this is true growth this is a complicated picture right but you mentioned that growth in military production there and for the first time Russia is investing more money in the military than in Social spending where exactly is this money coming from well first and foremost of all uh Russia continues to sell oil and gas with two main uh consumers two main buyers being China and India uh they're buying oil and gas with huge discounts but just ask the mulas in Teran I mean they've been doing it for the best part of the last quarter century and they managed to survive when you export Commodities you always have money to uh let's say throw to the uh to to the to the uh less well protected socially uh strut of the population uh and to pay for your secret police that's exactly what Putin is also doing um so uh as I said the uh the money comes the investment comes uh from uh the uh oil and gas exports plus the government has well Sovereign funds and they as far as I understand invested at least part of their reserves into veloping military industry which is not a high-tech industry but it produces enough shells to wreak havoc in Ukraine right you mentioned India and China there as primary Partners but 130 countries have shown up so clearly many countries do Ally with Russia but we also know that China as Russia's most important trading partner only sent a very small delegation uh would you read into this look we shouldn't read too much we shouldn't deluded by the official press releases of the St Petersburg economic Forum which I attended about a dozen times when it was a real Forum where you could see the president of the United States the president of France CEOs of EX mobile and BP coming there these days uh these 140 Nations uh you know they would put in their press release the the Kremlin put in their press release even one small I know Luxembourg company that managed to come there uh the main guests I'm really sorry to say for the kremin and not not not not for the rest of us the main guests there were the Taliban and the president of Zimbabwe come on how does it look compared to what the St Pete Forum used to be it is an attempt essentially to by nuk and by krook together as many people as possible to present this picture of you know the world is still trading with us but this I think we have to remember this forum was always an exercise in Putin esque propaganda even in better days today uh it is basically it's its main function to show that Russia doesn't care for the West that it still stands strong so we should look take all the official releases all the official figures coming out of the Forum with a pinch of salt there are some fascinating analysis and important clarifications in there Russia analyst Constantine Edgar thank you so much for that thank you

Channel: DW News

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Length: 5min 34sec (334 seconds)

Published: Sat Jun 08 2024