Author: Kim Iskyan

Roundup

By Kim Iskyan

em4

Shuvalov: Russia is revising its plan to join WTO

During a late April trip to Washington, DC, first deputy prime minister Igor Shuvalov said that Russia would abandon its plan to try to join the World Trade Organization as part of a customs union formed with Kazakhstan and Belarus earlier in 2010, in favor of seeking accession independently. The customs union issue has been at the center of Russia's WTO quest since the country announced it would join only with its partners, a process that would have likely proved impossible. But Russia's application process, which began in 1993, still faces a number of challenges—such as meeting the trade organization's requirements and addressing domestic concerns about job losses and increased competition—and the country is unlikely to join before late 2011 at best.


Relations between Russia and Ukraine took a big step forward when they agreed to a deal in which Russia will cut gas prices to Ukraine by 30% in exchange for Ukraine's extension of the Russian navy's lease of a key Black Sea port, and other concessions. Days later, Putin surprised Ukrainian leaders by suggesting the merger of Gazprom and Ukrainian state-owned oil and gas company Naftohaz Ukrainy. A deal would significantly reduce the chances of further disruptions of gas deliveries to Europe. It would also be vigorously opposed by the Ukrainian opposition, who are highly suspicious of Russia's advances.


Russia's central bank has cut the refinancing rate to an all-time low of 8%, compared with 13% just a year ago. Inflation is hitting new lows, and the economic ministry cut its forecast for full-year price growth to 7%, another post-Soviet low. But bank lending has been slow to recover, with loan volumes still well below pre-crisis levels, which could threaten GDP growth.


The Russian parliament appears likely to approve legislation that would significantly simplify the rules for granting so-called highly qualified specialists permission to work in Russia. Streamlined foreign labor laws will provide a boost for president Dmitry Medvedev's efforts to diversify the Russian economy, in part by making it easier to attract foreigners with significant experience in knowledge-based industries.