what about your weather to you here's a look at the top stories russia is in anticipation of a state of the union presidential address where it's believed we had a boy announced changes to the country's political system its reform has been the most pressing issue since the outcome of december's parliamentary elections led to rallies against alleged vote rigging. arab league observers are set to arrive in serious part of the deal with the country's government aimed at tackling bloodshed there that's as sanctions imposed on damascus by the organization prove inefficient for the people being the ones to feel the pinch.

and america's controversial practice of death by lethal injection hits a stumbling block the e.u. has imposed tough first directions on the sale of drugs used for deadly shots coming in already struggling supply line to the u.s. . all next on r.t.l. we explore the chances of a dollar's failure with the world economy ending up in dire straits we speak with the first deputy head of the russian central bank and the. spotlight is next.

hello again the welcome to fossil i.v. interview show on our state i love or not and today my guest on the program is your pride. year has been particularly challenging for the world because christine legarde the managing director says the financial crisis has shattered gears i would pushing it to the break another recession but russia relatively speaking has fared pretty well delivering growth and a balanced budget but still the risks ahead are real and russia remains vulnerable

to external shocks like for example fall and as you propose so how will the country get ca two thousand and twelve we're asking first deputy chairman of the russian central back i don't see why you can't. despite global economic instability russia has prospered in two thousand and eleven official say the end you inflation is at historic lewa time to seven percent while g.d.p. . it's up almost five percent consumer loan rates have dropped significantly reaching the pre-crisis levels and deficit rates have risen the central bank also has the world's third largest foreign currency reserve economists a russian economy's healthier than most european countries russia's recent accession to the w t o is likely to boost the economy further clearing the way for more foreign investment.

well first of all what would you cite as the russia's biggest single financial achievement in two thousand and eleven the biggest achievement is was still alive i mean the financial system is broken i would say but a good one the. banks are in good shape in the balances in the cut position no closer to the end of the. or we can see some kind of shortages on the declivity market but that could be issues of time for the banks in the world it's not there very much in phenomenon bloss the lending of banks is going up quite rapidly and even we became a little bit nervous about that this year will have around twenty five percent of increase of full and you know the banks in nominal terms i mean so we would rather

have somethin closer to twenty percent but that support anywhere that support economic growth well according to the world economic forum ranking russia holds the thirty ninth place in the financial development last year the position was forty so we're we're one point up this is something we could be proud of or there's well and if we will live long well. given higher than one place one year. etc listed i would say this is fairly stick as to mation we still have a lot of problem to be solved i mean the fragility of the system dependence of oil and generally commodity prices some problem in banking regulation for instance the fiscal position i mean non oil and gas budget deficit

is big the primary that we have not. a primary deficit this year but not all guys deficit is still big so this is all the problems will have to solve if we really have to be high in this record to be moving to the world with a mirror effect. on us soil it really was switzerland ok vladimir putin recently talked to the nation and he said i quote that inflation in russia was expected at slightly over six percent this year a record low level comparable with european levels what contributed to this achievement from you our first the monetary situation before in say two fall isn't ten and. the. supply of money was very big more than thirty percent a year at most of the big pressure on the market this year fortunately it will have

only twenty one percent of my money additional money supply this is number one the second point is the much better food prices situation in both global demand and domestic dimension because in previous year it was very high pressure of the food prices on the index of headline inflation that is a number number two position. and probably this but one is. a new exchange rate policy i mean now it's much more flexible so it's not not very much dependent on the capital inflows and outflows and the pressure on the committee to cite also i mean the combination of these factors helped us a lot control inflation how good are the chances to keep this low level of inflation next year maybe make it even lower we will have the plans.

to have it less than six percent next year. the corridor is a five point five to six that is not easy but that is a realistic. i mean. are we. as far as we're can predict the mantra situation it will most acceptable for for for at least the first half of the year probably all the twelve months of the year the. and the point we are not very much sure of is of course is the food food food prices it would very much dependent of the harvest and other i would say technical things in russia in other countries but we can see it only closer to the middle of the year and also the w t o membership may influence food

prices yes of course but not so high because we still have some period of time to adapt ourselves to the food membership of the cio. the russian economy i quote will grow food point two to four point five percent in two thousand and eleven putin said during the q. and a session with the nation this is not bad as a result of the year compared to other developed economies but if we take the brics country this is the lowest result among the brics among the emerging funds global economies worsened so that means that only russia is the main street you know we're just in the middle of them just in the middle of course the chile not exactly brics . we're not exactly breaks and we're not exactly developed yet of course was something in the middle of that and very much dependence of institutions are now

economists closer make in which direction you know we will really follow in our future but anyway of course let's compare with the say america and europe one one point half moxon two percent of the growth of but from the other side we'll have india and china of say nine. percent but they are they also have high inflation in here this year will have much higher inflation than russian federation and china not so high but close to it then why do we call or so of brics because russia prefers to be the best kid in town the last kid in the city is that it's not a cow or the name of this is one of the guys from goldman sachs. his is his label so it doesn't really necessary to use the labels you have to understand better the real sense of the problems on the

situation so i would say that we have not very high but sustainable growth this year more than four percent next year will it will be close to four probably little bit lower but around that so in a way it's all about speaking about rating agencies we just got the news that that fitch has downgraded six biggest banks in the united states and europe bank of america goldman sachs b m p some of the well according to analysts these banks the dow then reading of these banks is going to influence the world financial situation will it influence that the banking situation in russia. depends the they are all of the agencies are quite contrary. controversial contradiction would say let's take this example then they done great the sovereign trait of can i

think states it was absolutely zero influence to the markets zero influence so i believe that the little excess and investment bankers they prufrock to make their own analysis or to attract some independent then a little raised who pays the rating agencies. so you know they've used. but of course of course the situation with banks first in the euro zone but also in the united states that bonds in their balance sheets they have to have a logo which the european asbos sovereign and cup are that and of course that this point of of dangerous point of notice but and of course it somehow influenced russian banks because as soon as the global markets the rate of stock exchange of the of financial institutions forced or by was going down it influenced sosh and we can see that our biggest banks which are on the market like this about

one call that have been loosened their position keep keep it inside this situation . and the kind of high profits they see here the it was fantastic result for say these brown bunker will get more than ten billion years dollars as a net profit the if it's a bill half mile and food and a half probably because this is net profit and in that very situation that capital stock is go into it just because of influence of the global financial situation says alex see when you kind of first deputy chairman of russia's central that spotlight will be back shortly after the break so stay with us we'll continue this into the.

year in bygone days sleds one final to get around. today them all measure the life line. what drives people to quit their modern lives and settle in remote woods. one finds them up to. survive in the freezing cold. beginning in brushes and discover the arctic circle on the.

welcome back to spotlight i'm angry nabhan just a reminder that my guest on the show today is alex lucaya and he's the first deputy chairman of the russian central bank and we're discussing the financial results of two thousand and eleven and maybe what it's awaiting in two thousand and twelve mr

kif. the. i.m.f. and i would say mr brett he was interviewed by spotlight couple of weeks ago and he said that russia has the potential to grow six percent per year. you said that sitting in your chair would you agree with this assessment from the i.m.f. or. not so optimistic about the potential i believe in. future and global cost focused not so high and russian prosperous and not so high because well very much dependent on the global demand demand for commodities demand for export and they demand pretty much dependence of the rate of growth in the parts of the world i very much believe that the general rate of growth will go on down i mean in developed countries will be

something around one point half to two percent and even in emerging markets where it will go down hopefully not so fast all is speaking about being pessimistic ex finance minister couldn't is especially mystic as you are and he said a few days ago that the new wave of economic recession has already started and it's here in russia to do you share this point of view you know that expression that pessimistic is a well informed of the i'm just going to say you are good in that i'm currently i am i hope the new comes to russia at least. the difference between the good and miss terminology because i do not like the words like crisis or wave of crisis i believe that this is a new reality new market economics reality this is for a very long period of time and we cannot just easy come back to the good old

times you say gold is ninety's always euro suzi beginning of the century then the global growth was in average around five four five percent i thought no or none of the good old were the seventy's there are. others but governments. and. and that is the problem there it's not that it's not not the you know damage or something we'll have to understand that that isn't your normal it's in your reality and to conform and to prepare ourselves to that so it means that there is demand to see not so hard and this driver of russian economic growth will not work very fast of course there are other drivers it means consumer demand of the population and this go up most of all because of the growth of retail lending i said before that. general

london. will increase by twenty four twenty five percent by the detail to the consumers more than thirty percent and this is a driver for consumption in the most consumption but there is a competition between the the mr production and import goods the here and the input is going up really fast and then fought driver is investment growth but for that purpose will have to you know create better and more friendly business environment to the investors well let's hear more from the russian prime minister here's what wedeman put in had to say the other day about the state of russian economy. our economy is expected to grow to rate of four point two four point five percent compared to one percent in europe many leading european economies in the united

states will see no growth next year some european countries are going into recession there are usual figures their economies are going to be in the minus it's not something we're excited about as it may affect us as well nonetheless our fundamentals are better and more stable there is another important index russia is third in the world by the size it was a gold and foreign currency reserves which were. have restored almost to the pre-crisis level we also have a ten percent foreign debt that's minimal for countries we've developed economies. well now i have another quote from the i.m.f. and it's not so optimistic than what mr perec had to say this. they say that rocher if the crisis hits really russia will have fewer resources on the budget side to respond then in two thousand and eight when we had this stabilization fund do we have enough reserves to respond to the crisis today the things of course will

have much less resource now than in two thousand years of rule so this is correct as all other countries because what was the. the most important result of that was the fiscal position will have a great fiscal sockless around seven percent so we can spend money just to support internal demand now the two previous years were for a deficit this year will have fortune to her so close something between zero point five and one percent of g.d.p. is this up listen what it is not seven and we cannot just easily you know spend money to support demand in the country that is the main position i.m.f. . minutes from the other hand there is also the subtle but are pushed into the say very close to that we had before so i mean we can. we can support in turn or

land in our finance operation to supply liquidity to the banks and to help them to adapt themselves to that new reality and to continue land to the fire no bourse as far as i remembers starting from the beginning of two thousand and eleven. all russian politicians to the highest level were talking about investment attracting investment to russia and you've mentioned that to today but all this year we witnessed great capital outflow from russia according to your analysis a year ago i mean central bank you said your forecast was thirty six billion dollars the the. capital outflow but actually it reached up to seventy four billion dollars is that true and what's the reason that is absolutely true but let's let's divide the problem into pieces that is that figure that is

net private capital outflow that is difference between inflow of gross inflow and gross outflow. you can have the situation then really for instance foreign direct investments goes to the country but some domestic capital is sickening the best facilities outside and in that case you have this negative result and it could be some other different reasons for it so mostly that amount of money this is money market that is money that we're not talking a bird money running away from russia. well we are also going to cut what what kind of money once again there is that and then now now we'll have we'll have chuck money along with money is money in the money market so that is in money instrument in the ports it's in some boards in accounts in the banks and so on so for now then

the situation in europe in terms of liquidity is very acute it means that our banks and companies cannot refinance that that. therefore in debt and then had to wait just in accordance with the you know additional scale for instance it means that in the last month they have to pay around twenty billion dollars or something like that and that is the reason they have talk humor that money here and fight back to the creditors outside of the country but the really important point is direct foreign investment and that is materialized money money invested in the real assets in industries in different kinds of businesses and of course that amount of money cannot be you know easily go in and out this is more conservative invest more long term invest and we would rather attack this kind of

a must but anyway this is a moderate seventy four billion means that the central belt as a monetary authorities stopped. it it or rubles before would just buy the currency and we you know supply the economy with the rubles about that direction now beginning from september we do not buy. we even sell something from our results to the market and it mr allies are obols from form the market in the russia that is the problem not the seventy four is a figure but this iteration in the most money market and some banks. at the problems with the community and will have to. propose some specific measures to help them. as far as understood the russian government is not planning to raise taxes to to compensate for the losses in budget revenues what about the

central bank how you favor because what we have the lowest taxes in europe the lowest income tax at least it is the central bank in favor of raising taxes you know no no we're not like ours in taxes of course but you see you have somehow balance your budget you have three options number one you know to cut your spending number two to increase your i mean yes and number three to borrow. i believe the first position is but it is best so if you're in a position to rationalize somehow your spending to have better structure for expenditures and to cut the some extra expenditures you have and that's the reason for you not to race anything from the market and not guys your taxes thank you thank you very much the only problem is that it's election year and that governments don't like to tell tales to cut expenses shoes that will actually

reduce staying on the budget thank goodness was alex a guy on for life and he's the first deputy chairman of the russian central bank that's it but after all if you want to have your say on fog lights or have someone in mind tree a plane crashed into next time you drop a lot we'll be back with more personal comments on what's going on in and outside russia and so then they are to you and me to. a kid this is an. odd place. blah blah blah blah blah blah blah blah blah blah.