Just over a decade after Russia's forced devaluation of the ruble and default on its debt -- which followed a commodity price collapse in the wake of the Asian crisis -- the country appears to be following a scarily similar trajectory. Russia is now financially more robust than in 1998, and its political leadership is undoubtedly stronger. But the parallels between the two crises are profoundly unsettling. Certainly, the global tightening of credit has exacerbated Russia's problems; the difficulty of refinancing the almost $500 billion of outstanding borrowing by private sector corporates and banks could yet break the country. The risks for Russia in 2009 are great. One can only hope that the fall in the oil price will be used as an opportunity by the government to put its economy -- and society -- on a firmer footing.
Running On Empty Laurence Neville Global Finance; Apr 2009; 23, 4; Docstoc pg. 33 Reproduced with permission of the copyright owner. Furthe
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