mr list mr breckon welcome to the show thank you very much thank you very much for coming well first of all everybody today is talking about an imminent second the way of recession does the i.m.f. share this pessimistic pessimistic negative mood and if yes when you least expect it ok well clearly the world economy has entered into a new and dangerous phase we adjusted down resource growth projections for the world economy only last month by about half a percent this year to four percent and also to four percent next year so we clearly do see that the situation is has deteriorated at the same time our baseline is as i said it's not it's not a downturn is not a recession it's a continued growth but it's a slower pace of growth having said that the risks that we do see in the eurozone the risk that we do see in the u.s. economy and so on clearly mean that the risks are now on the downside and what is basically each and this possible recession is it about the the something that would come your way to doing during leading the effort to to overcome the recession in two thousand and eight but i think there are a number of things that happened more or less at the same time that hit fragile global economy you had weaker growth in the u.s. you had into interest vacation of the eurozone difficult this you had you had a tragedy in japan and so on and so forth so there are a number of shocks to major economies in the world that have contributed to to the slowdown in growth where would you say the situation you were as you mentioned the use though and the and the united states what would you say the situation is more is more vulnerable in the states or here in europe now well the situation of course is different in the europe in europe there is there is now problems in seoul and there are problems with banks. in the us probably the situation is more one of all slow growth in the economy so slightly different different issues but obviously stemming from the same sources how much is russia's economy threatened by the new by the new possible wave wave of recession and how much should one how vulnerability is it russia clearly is is quite an unstable economy if you if you look at the developments over the last ten years say russia clearly stands out among peer countries in terms of the instability in terms of the variability in growth and this to a large extent stems from the fact that russia is vulnerable to what happens in the world economy it is while noble in the sense that its exports are very concentrated on commodities and oil in particular and it is also wonderful because capital flows in and out of russia are also affected by commodity prices so when the world economy is doing well the commodity prices go up capital also flows into russia and you get it magnified effect and vice versa so clearly what we are seeing now as the world is going through a difficult phase of all it is seeing the spillover is through the russian economy as as we've done in the past so by the structure of the economy it's quite well dribble to lose what is happening what we've seen lately in the news is that moody's has downgraded degre russian making system from stable to negative is it is sign of a possible new credit crunch while credit has been recovering quite nicely since the crisis before the crisis credit was probably growing too fast in russia it was growing at forty fifty percent a year leading up to two thousand and eight. i don't think that should be the benchmark going ahead credit now is in the fifteen twenty percent growth rate that would be a good solid rate over time if that can be sustained the russian ruble has lost part of its value recently and it seems to be to be in the same route still so why. what are the reasons the major reasons that you see for this for this like slow devaluation. i think clearly as i said already russia is vulnerable to what happens in the world economy so that is the underlying reason when you compared what has happened in the financial markets in russia over the last few weeks month or so to that in other emerging markets what you see is that russia has not been hit that much harder in other words the sources of the recent volatility in the russian markets is very much driven by developments globally and not so much in russia does any have any. perspectives what do you think are the maybe the perspectives for the ruble in the short term while it will be continuing. to lose value well we don't make projections for exchange rates obviously i think i would answer your question by referring to to the monetary policy of the central bank which is focusing more and more on the inflation which we think is the right the right thing to do inflation in russia has been very high compared to two countries that that naturally would compare yourself with before the crisis russia was the only country that had double digit inflation within the g twenty group for instance and this has been because of the largest and because the authorities have tried to steer the exchange rate but you cannot state action straight and inflation at the same time is a clear lesson now i think the central bank knows this very well it has allowed increased flexibility in the ruble and has been focusing more and more on inflation this is the right approach in terms of monetary policy we think and because low unstable inflation is important for investment and growth going forward so we think you will see more instability most likely because you will have more flexibility in the ruble exchange rate but that is the right policy and in addition. allowing the central bank to focus more on inflation it also allows the action straight to act as a bit of a buffer when things change in the world economy you let actually move you will not be affected as much to mystically in russia you mentioned the high rates of inflation or should but this year so far the inflation has been what are called moderate not not very high. do you think that next year the russians will be able to to hold the inflation so that inflation away from two digit figures at least we certainly hope so we think that the central bank is moving in the right direction only a couple of weeks ago if it. published its monetary guidelines for the next two years it is a mean for inflation between four and five percent by the end of two thousand and fourteen we think this is doable and we think the central bank is heading in the right direction of course monetary policy cannot do it alone this has to be a broad policy approach and especially the budget deficit excluding oil revenue needs to be brought down in support of this inflation target well what about the g.d.p. growth do you think it will continue growing next year in this country in russia we certainly project positive growth next year or latest projection for two thousand and eleven is four point three percent and in two thousand and twelve four point one percent now these projections were made one month ago and as we've already discussed situation is changing quickly things are deteriorating so certainly the risks are on the downside also for those projections and most likely we will adjust over estimates down but what what are the russians saying i mean what we hear in the read in the press and the press is just me or just one side of the story but there is the other side story and you should know the other side story said so what's the mood among the. russian economists russian bankers russian pop. sions well i think in terms of expectations or growth projection is probably so average so i think we are not too far of the general mood i think what is what is striking in russia and i'm talking about the policy requirements in general to gold in general there is a very high degree of consensus on what needs to be done in terms of budget policy in terms of monetary policy and so on in order for russia to realize its growth potential and to become less dependent on oil to become a more diversified and stable economy and that's a shared view and as a shared sentiment i think and and clearly what the crisis what spillovers are showing us today is that this is important while this high level of consensus is good at that for me well on the one hand it helps it helps one rule the country without the other and it's it deprives the government our options does it now i think obviously we all are in favor of open debate and exploring options and so on . but russia has had certain experiences that have crystallized i think some lessons over the years and i will of the mentioned some like monetary policy frameworks in russia have not been strong enough to be to stand inflationary pressures they have not been strong enough to to hold back on the spending of oil revenues so to have balanced economic development and so on so i think the experiences that russia has had real life practical experiences over the last one or even two decades clearly show the kinds of issues that needs to be grappled with if russia's going to realize its growth potential when russia started building capitalism twenty years ago we were a country that was ready to learn and from the americans from the europeans well today it seems that we're more in the mood to give advice than to learn do you agree and don't you think that it's a bit early to start giving advice maybe. maybe the russian bankers she is learning to do but everybody kind of country but i think clearly if you look at what is happening in the world economy there is is a very fundamental shift towards emerging markets including russia and this is a shift in in terms of relative economic weight and it's a shift that is also reflected gradually in the governance of international economic institutions such as the one i represent the international monetary fund very reform underway to increase the way to increase the vaults of emerging countries countries that are becoming more important such as russia says mr odd that the head of the i.m.f. and russia spotlight will be back shortly after great so stay with us we'll continue it in no time. i had to go through a ten year old boy that. we train him out of jail we as officers developed the orders for them to kill. we never explained to them why it's ok. most people at the point of looking down in time to pull the trigger became conscientious objectors. i don't remember squeezing the trigger i don't remember seeing him go down all i remember is that we shot him. on the other side are soldiers to him and soldiers do it so they're trying to kill us we're trying to kill them and that's just the ugly face of war. nothing honorable and. i went to the war zone and i started seeing how i need to change. and on a way to do their job and not a rival and kill another person that's why i'm applying for concerts. all over. welcome back to spotlight our love and just through one of them my guest on the show today is mr ard parrot back the head of the i.m.f.