Gref Says Don't Rely on State Orders

MTGref speaking at Wednesday's forum with Sistema's Leonid Melamed, left, and Severstal's Alexei Mordashov.
Sberbank chairman German Gref said Wednesday that government orders with businesses would not be enough to get them through the economic crisis and that such deals cannot replace private demand.

"To use state-funded orders to make up for the fall in private demand is inefficient, as state and private demand differ a lot, so there is no sense in mixing them," Gref said at the Russia Forum.

The comments came just a day after a government commission chaired by First Deputy Prime Minister Igor Shuvalov decided to help GAZ, Oleg Deripaska's struggling automaker, including with state orders.

The tactic has been a popular one in recent months, and many Russian metals firms and carmakers have called on the government to buy their products.

Prime Minister Vladimir Putin said in December that the state would invest 27.5 billion rubles ($759 million) to buy ambulances from the Russian carmakers, and the Transportation Ministry has been given 40 billion rubles to buy equipment through a leasing company from 68 enterprises around the country.

Norilsk Nickel, in which Deripaska holds 25 percent, suggested in December that state depository Gokhran buy its nickel and copper.

The government last year pledged more than $200 billion to help banks and businesses deal with the economic crisis, including $50 billion to help Russian companies refinance foreign debt. Much of the rest of the bailout funds went to the largest state lenders to help boost liquidity among banks.

Gref sought to justify the banking sector's inability to meet demand for loans in full. "Banks can't serve the whole economy," he said.

Addressing complaints that banks were cashing in on the devaluation of the ruble, Gref said it was "the most efficient way of earning money now," but not all of the blame should go to banks.

"The currency exchange chain includes not only banks, but also companies and ordinary citizens," he said, adding that Sberbank "hadn't earned a kopek on currency exchange."

Russia will face the peak of the financial crisis this year and will go through stagnation in 2010 and 2011, Gref told forum participants.

During a panel discussion with investors and businesspeople, Gref also spelled out his concept for getting out of the economic crisis.

"We have to maintain macroeconomic stability, support the currency, bolster the solvency of the financial sector participants and prop up banks' ability to give out loans and transfer money to the real sector of economy," he said.

Gref compared the situation to that of a person who has broken all of his limbs and is stuck in a hospital. "Then you have a lot of time to lie and think," he said. "It's the same with the crisis."

nGref also said Wednesday that Sberbank was studying an offer to purchase a stake at the BTA Bank, Kazakhstan's biggest bank. "The conditions they will offer us are important," he said. "We have some limitations, as we are entering the crisis. And this is not the most convenient moment to buy assets."