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. Last Updated: 07/27/2016

Gref Against Reliance on State Orders

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 orders cannot replace private demand.
A government commission chaired by First Deputy Prime Minister Igor Shuvalov decided Tuesday to help GAZ, Oleg Deripaska's struggling automaker, including through state orders, a representative in Shuvalov's office said. The company's vehicles are frequently used as ambulances in Russia.
Some of the country's largest metals and auto companies have called on the state to support them through purchases.
"State and private demand differ a lot, so there is no sense in mixing them up," said Gref, who served as economic development and trade minister from 2000 until taking over at state-controlled Sberbank in 2007.
He was speaking at Troika Dialog's Russia investment forum.
During a panel discussion with investors and businessmen, 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.
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.
The Russian financial sector has lost a combined $1 trillion since the crisis hit Russia, he said, and "according to International Monetary Fund estimates, the total losses of the financial sector could pass $2 trillion."
Gref compared the crisis to 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."
The world has sobered up now, Gref said, and must seek more efficient management both in government and business.