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Ex-Finance Minister Says Russia In 'Full-Blown Crisis'

Former Finance Minister Aleksei Kudrin (file photo)
Former Finance Minister Aleksei Kudrin (file photo)

Former Finance Minister Aleksei Kudrin says the Russian economy is in a "full-blown crisis" fueled by capital flight and low economic growth due to the conflict in eastern Ukraine and low global oil prices.

Kudrin said in an address on June 3 to the Federation Council upper house of parliament in Moscow on June 3 that capital flight from Russia last year was $150 billion and will be some $100 billion-$110 billion in 2015.

He said the private sector was mainly responsible for the capital flight and that people were taking their money out of Russia because "something doesn't work here."

Kudrin, finance minister from 2000-2011, said the current economic model in Russia "needs to change."

He said the current economic problems in the country were due to the "absence of structural reforms" in recent years and an overreliance on energy exports.

Kudrin said the Ukraine crisis and the resulting international economic sanctions imposed on Russia for its involvement in the conflict were reducing Russia's GDP by between 1 and 1.5 percent per year.

He added that about 500,000 people will lose their jobs because of the bad economic conditions in Russia.

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