Decline in prices for staple domestic exports is the greatest risk for Russia – diplomat

Deputy Foreign Minister Alexander Pankin’s interview with Interfax News Agency was published on the website of the ministry.

“The coronavirus pandemic is a global challenge. There have been wars and deadly epidemics throughout global history, but hardly ever before did any disease paralyze the entire planet,” Pankin said. “This unprecedented situation is a survival test for the majority of integration associations all around the world. To minimize the losses from the crisis provoked by the spread of COVID-19, we should launch large-scale cooperation at regional and global levels. Solidarity, mutual support and overall cohesion are more important and needed now more than ever before. It is now important to shift the emphasis on expanding international cooperation and coordinating the efforts in order to mitigate the pandemic’s harmful effects on the global economy.”

Speaking of the CIS, he noted that “the current problem is threatening such aspects of integration cooperation as the free movement of workforce and free mutual trade in goods and services. Since the pandemic’s outbreak, the regional international organizations, acting within the scope of their competences delegated to them by the member states, have been doing their utmost towards fighting the coronavirus infection and helping to mitigate its consequences. Acting together with their CIS partners, the EAEU and the CSTO have mobilized their resources towards this goal.”

“The pandemic led to disruptions in international and national supplies, as well as in global value chains, and caused a supply and demand imbalance. The systemic imbalance of the finance and commodity markets has worsened. In conjunction with the already accumulated trade differences and the introduction of various restrictive measures, the uncertainty in the global economy’s ability to function as an integrated system has increased,” Pankin noted. “As the pandemic spreads, the economic forecasts are being reviewed and key macroeconomic indicators are being revised down. In its January forecast, the IMF estimated the global economic growth rate at 3.3% for the year. Its April 14 report states that the world is plunging into the deepest economic crisis since the Great Depression, and global GDP will shrink by 3%. The developed economies will be hit the hardest. According to this financial institution, in the best case scenario, that is if the pandemic is curbed in the first half of the year, the global economy will recover from it only in 2021, losing about $9 tln in the process. For Russia, the decline in prices for staple domestic exports, as well as the contraction of the respective markets, represent the greatest risk. Given the circumstances, Russia’s economic diplomacy is faced with a difficult task to counter the attempts to use the political tools to obtain competitive economic advantages.”

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