Russian State Falling Apart, Say Estonian Economists ({{commentsTotal}})

Regularly tanking up in Russia can mean considerable savings in the household budget. Source: Photo: RIA Novosti/Scanpix

According to SEB private banking strategist Peeter Koppel, the Russian economy has many structural problems and is crumbling on many sides.

Koppel, and the economic adviser to Prime Minister Taavi Rõivas, Maris Lauri, told ERR radio today that the economic situation in Russia has had its impact on how it is acting in Ukraine.

Lauri said Russia's economy had deteriorated much quicker than many had predicted. Koppel said the goal of economic well-being has been replaced by a military narrative.

The downward spiral began in 2003 with the shutting down on Yukos, a petroleum company in Russia controlled by oligarchs, Koppel said. The government left the company a 20-billion-euro tax bill, which led to bankruptcy. The case led many prominent Russian businessmen to transfer funds out of the country, resulting in a lack of investments.

Lauri said 70 percent of Russia's GDP is oil and gas related. In Russia's trade with Estonia, for instance, crude resources are exported west and machinery, industrial products and food are imported to Russia - that, she said, was akin to developing nations trading with developed nations.

Besides the lack of added-value products, Russia's infrastructure is crumbling and the population is getting older, Koppel said.

+{{cc.replyToName}} {{cc.body}}
No comments yet.
Logged in as {{user.alias}}. Log out
Login failed

Register user/reset password

Name needs to be fewer than 32 characters long
Comment needs to be fewer than 600 characters long

Independence Day: Estonia’s way into the future isn’t a race

There is a lack of connection between the Estonian state, and the people who live here. While it expects a lot of the state, Estonian society doesn’t seem ready to contribute, writes Viktor Trasberg.

Lotman: Security academy would be crucial Estonian identity point in Narva

In an opinion piece published by Eesti Päevaleht, Tallinn University professor Mihhail Lotman found it important to overcome the mental barrier separating Ida-Viru County from the rest of Estonia.