Russia: 5 years lost due to financial crisis

Russia's Finance Minister Alexei Kudrin says his country's economy has been set back by five years.
Russia’s finance minister Monday made a rare admission of responsibility for the country’s severe economic crisis.

The Russian government overspent its vast oil revenues in recent years, fueling inflation, and failed to diversify the national economy, Finance Minister Alexei Kudrin said in an exclusive CNN interview. Kremlin officials usually blame the West, and specifically the United States, for the global economic crisis. Kudrin, who is also a deputy prime minister, said the financial crisis had set back the Russian economy by 5 years, and confirmed Russia would have a budget deficit of 8 percent in 2009 — its first for a decade.

Russia’s stock markets plummeted by nearly 70 percent in 2008, and the country spent a third of its reserves — or $216 billion — defending its currency, the ruble. The Kremlin has also committed vast sums to bail out big business in Russia, which is heavily in debt to foreign banks. Kudrin — who is attending a global investment forum in Moscow — said there were signs the Russian economy was stabilizing. He confirmed that investors pulled $40 billion out of Russia in January, but said that enormous outflows of cash had stopped.