Russia's Deputy Prime Minister Alexander Novak downplayed the effect of Western sanctions on his nation's economy in an exclusive interview with Hadley Gamble of Al Arabiya English. He cited the IMF's growth estimates of 3.2 percent for 2024 and the fact that Western nations continue to import Russian goods.
According to Novak, Russia's economy is a "supply kind of economy" that is being built to suit all requirements, including social ones. "I definitely do not believe that this is a war economy," Novak stated.
"To make sure that traditional industries run sustainably, we are investing in high-tech industries," he continued.
Many in the West interpret President Vladimir Putin's recent move to increase taxes as an admission that the sanctions—which were put in place in the wake of Russia's invasion of Ukraine in 2022—have had some effect.
Novak, however, characterized the tax increases as a "fine-tuning" and betterment of the current framework. In order to support needy families, he clarified, the primary objective is to "ensure a fair distribution of the tax burden between individuals and households... having the affluent pay more taxes."
While acknowledging the effectiveness of Western sanctions, Novak argued that they had forced Russia to shift its emphasis from importing goods to more indigenous industries and R&D centers.
He informed Gamble, "We have been able to increase the growth of the domestic market and consumption thanks to the sanctions, which has increased our gross domestic product."
Pushing back against the narrative that Russia is playing catch-up with Beijing, Novak told Gamble that Moscow and Beijing have a fair and mutually beneficial relationship. She also highlighted the growth of trade and economic relations with various “friendly” countries and the opportunities that exist for small and medium-sized businesses.
"We put quite a few of these with whom our relations have been developing for a lengthy period of time," Novak stated in reference to the friendly countries. Thus, we are able to establish trade and economic ties with them now. We forge new paths of collaboration, which the Russians can readily justify as they are providing us with fresh chances for small and medium-sized enterprises to flourish, to increase trade, and to launch new ventures in order to generate more revenue for rising wages.
He went on to say that Russia's rate of salary growth is "very high," higher than it was prior to the sanctions.
Regarding Russia's possible reintegration into the world economy and cooperation with the US, Novak stated that the nation has not faced any difficulties as a result of "unilateral restrictions." He mentioned Russia's continued partnerships with a number of countries.
"Europe continues to receive Russian crude, and certain products continue to be shipped to the United States," stated Novak. "Aircraft manufacture still requires the shipment of metals to France. Thus, the Russian economy is not isolated even at this moment.
Decisions made by OPEC+ take geopolitical factors into account and have a direct impact on the oil markets, according to Novak. Nonetheless, competitive pressures from renewable resources and strategic concerns like energy transition are the main drivers.
According to him, there are also short-term factors like economic demand and rate increases by central banks.
"There are other uncertain factors, such as the current Middle East situation, which certainly has an impact," he stated.
According to Novak, the decision-making process is intricate overall.
"We take long-term implications into account in addition to short-term factors when making decisions," he stated.
