Foreign Trade Minister Kimmo Sasi: Russia´s economic growth requires investments and extensive reforms

Foreign Trade Minister Kimmo Sasi opened an international seminar on Russian economy called "Technology, policy and industrial modernisation" at the House of Estates in Helsinki on Monday, 2 October, 2000. The two-day seminar gathered about a hundred economists, political analysts, sociologists and other experts on Russian affairs.

In his opening speech, Mr Sasi said the Russian economy has provided a great many challenges in the field of research. There are many problematic, interacting areas within the Russian society, posing a great challenge for the search of solutions.

According to Mr Sasi the Russian economy is recovering from the economic crisis of August 1998. This is due to the oil prices and devaluation but also due to the revival of domestic industry and investments. There is no clarity or unity over the fact how long the boom will last and what will happen after the benefit of devaluation has been exploited and the world market prices of energy and other rawmaterials go down. According to Mr Sasi, the recovery of the Russian economy requires investments and extensive reforms covering the entire economy and society. Such reforms include, among others, taxation, land ownership and the adjustment of foreign trade regulations to reciprocate internationally.

Mr Sasi said the growth figures in the trade between Finland and Russia have returned to the level prior to the August 1998 crisis. Russian imports comprise 10% of all Finnish imports and Finnish exports to Russia are 4%. Imports have risen two-thirds and our exports one third during the first quarter of 2000 as compared to the same period last year.

Mr Sasi emphasised the role of the World Trade Organisation and the European Union in regulating international trade and in bilateral trade relations between Finland and Russia. The opportunities provided by the partnership and cooperation treaty between the EU and Russia have only been partially utilised. The free trade area included in the treaty cannot materialise without a full implementation of the treaty and Russia´s membership in the WTO.

Mr Sasi said cooperation between Finland and Russia has been groundbreaking in many areas.