RUSSIA - The OECD has warned the Russian government that it needs to encourage investment levels, private business, and competition rules despite recent improvements.
In its fourth economic survey on the federation, that OECD survey stressed that these areas continue to suffer from “fundamental weaknesses”.
But the survey does praise Russia’s recent efforts to eliminate budget deficits, increase financial discipline in the economy, make headway in structural structural reforms. It points to improvements in macroeconomic policy, financial discipline, corporate governance reform of the banking sector. Better co-operation between the Russian government and its parliament (Duma) has also boosted prospects for achieving key reforms, said the OECD.
Russia's economic revival over last two years has been boosted by strong oil and gas prices and a weak rouble, but further reform is crucial for establishing conditions that will sustain growth, according to the report. The OECD also calls for regulatory reform that would involve the creation of an independent body responsible for implementing regulatory rules that are fixed in laws or contracts.
Barring a major deterioration in world commodity prices, the short-term prospects for the Russian economy are favourable, concluded the OECD survey.
By Madhu Kalia
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