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2 Mar, 2009 07:34

Krasnoyarsk Forum concludes with Government looking for business buy in

The annual economic forum has ended in Krasnoyarsk, with Government officials and business representatives using the event to exchange ideas on how to overcome current financial turmoil.

After half of the country's reserves were spent on supporting a slow devaluation of the Russian Rouble and providing liquidity to the banking system, government officials finally agree that the economic crisis is a long term reality.

At the Krasnoyarsk forum, the government looked for new recovery ideas from business participants. Presidential Aide, Arkady Dvorkovich,

“Given the amount of resources that we have, we need to determine what is the most efficient use – cut taxes, consumption stimulation, provide social guarantees. We are looking for compromise solution.”

The government has provided loans to companies since autumn 2008. At the forum, it was announced that support is limited. Chris Weafer, Chief strategist at Uralsib says the Government is looking to business to play a major part as well.

“The Government wanted to get the message out to business, that they have to play a part as well. It’s not just going to be all down to the Government and relying on the government to put its hand in its pockets. Now we are seeing the Government extending the, if you like, the responsibility to business.”

Business representative were able to use the words “I suggest”, in hopes of further stimulating the economy. The main message that business society tried to send to government officials is to sustain or even increase investments in strategic development. Money that goes into infrastructure and housing construction can support other vital sectors of the economy as well as domestic demand for resources. Time will tell if Moscow listens to the voice of business. So far, however road construction investment has been the first to be cut.