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A Demographic Trap and Low Growth Are Putin’s Biggest Challenges

January 17, 2020
John Dizard
This is a summary of an article originally published by the Financial Times. 

The author writes that despite Western expectations of reports of doom and gloom from Russia, the country is in fact "adopting expansionary economic and social policies that appear to be financially sustainable" and are intended to overcome what the leadership "considers its most serious challenges: a demographic trap and low growth.” Putin's government shake-up intends to somewhat decentralize state power, keep tax rates flat and raise investment protection standards. The author notes that Russia had the world's best performing equity market in 2019, according to MSCI indices. Russia's measures in response to sanctions following the Ukraine crisis have produced strucutral stability and a now "3 percent budget surplus, foreign exchange reserves larger than its foreign debt and a rapidly developing domestic capital market. ... The Russian leadership, including Mr. Putin, have their own reasons for institutionalizing better corporate disclosure, reducing corruption and shifting away from oligarchical model. Their real concern is they need to keep young and talented people in the country and even attract immigrants from the ‘near abroad.’”

Read the full article at the Financial Times.


John Dizard

John Dizard is a columnist for the Financial Times.

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