[MUSIC] Hello, everybody. Once again, we continue to understand the Russian economy and transition. And today, we pass on to the extremely interesting period in Russian economic history. The one, which I call the golden decade. We will make the analysis of the golden decade where Russian economy had a very fast rise and then it all ended up by economic crisis again. So those two major events in economic history of Russia will be treated within this topic. So the golden decade, [COUGH] that's the period after the crisis of 98 and til the second crisis of the year 2008. So, that was really a decade of very fast rise and rapid economic growth. You can see here the figures. [COUGH] Initially, GDP grew at a very fast pace. More than 30% on the annual basis and then about 7% a year growth, which is also a very high growth. Since the year 2000, the National Russian budget was positive balanced, no deficit. [COUGH] Public debt, which use to be great. Remember, we analyzed the situation with Gekko with heavy public borrowing and enormous external and domestic debt of the Russian federation. This time, public debt lowered from 85% of GDP in 99 to just 28% already at the end of the year 2003. Investments grew at a pace even higher than the overall GDP growth, about 10% a year, which means that economic growth was quite good. Inflation decreased from three-digit figures, from three-digit numbers to two digits ones. Well, two digit numbers of inflation is also high. Problem on inflation still is a serious problem for the Russian economy and we will treat as a special topic, as a special challenge in a particular part of this presentation, but here's just to mention that within this period of time? Russian government managed somehow to control inflation. Very important for the population of Russia that economic growth finally had positive effects on well-being of the nation, which was reflected in the rise of real incomes. Real incomes rose about 11% a year, still more than the GDP rise, more than investments grew. So, this was a really happy year for many citizens of Russia. They have produced positive results for them. You can see here the figures that starting from the year 2006, as many as 20 million tourist a year traveled from Russia and traveling from Russia is not an easy thing to do. It's not like in Europe, you just go several kilometers away from your village and you are in the next country. Distances are much greater between Russia and other popular destinations. You have to have much more money in order to let you travel abroad. And that is already some important indicator of the new well-being of the nation, if so many tourist started to travel abroad. That's the way we can treat this indicator and another indicator of the rise in real incomes is a number of the cars sold at the Russian market. Russia bypassed Germany and became the number one market for cars in Europe. You can see here the pre-crisis figures, pre 2008 crisis figures. You can see that as many as more than one and a half million cars were sold in Russia at that period of time while Germany became second in number of the cars sold. And well, buying a car, a foreign made car that's already. Clearly, an educator over a new well-being for a Russian customer, for a Russian citizen. There are some figures on further development of the sales and cost. But well, that's irrelevant for the period we are analyzing. We just made so far the analysis up to the crisis of the year 2008 and the are fact that Russia became number one in terms of cars sold matters a lot. So some more figures, you can see here exactly what were the numbers of GDP growth. Before the crisis of 2008, that was quite a fast rise of GDP growth and Russia became 15th economy in the world by GDP volume. GDP volume is good, but normally a more accurate assessment of real comparative strength of a certain economy is GDP calculated on per capita basis. Well, unfortunately, with this indicator, Russia still lagged behind many economies of the world. You can see here, the GDP on per capita basis in Russia was only ranked somewhere as 57th in the world. You can see the figures for the 2004 and if you compare the pre-crisis GDP of Russia calculated on per chasing power operative, then you can see that in Russia, the indicator was roughly around $12,000 on per capita basis. While in France, nearly three times more roughly 30,000. In the UK, 3500. And in the US, $43,000 on per capita basis. So Russia had a lot to do to move forward to be on par with major economies of the world, but still as a result of the fantastic economic developments within this golden decade. Russia managed to slightly catch up with the rest of the developed world. Apart from that, we had spectacular financial results of the development of the economy within those years, within this decade. You can see here that the budget surplus since 2004 became roughly of 74 billion rubles. You can see that there was a rapid increase in the central banks of Russia had currency reserves starting from $65 billion in the year 2003, we managed to increase those reserves to up to over $400 billion in just a short period of time just in four years. And then before the crisis in the summer of the year 2008, they became even bigger. There was a record of nearly $600 billion of hard currency reserves in Russia, accumulated in Russia and that was roughly ten times rise within this decade. So, that was really quite a spectacular increase. You can compare it with China. [COUGH] China was much better in that more than 1.200 billion of reserves, which is roughly 2 times the amount in Russia. Russia was the third largest country in the world by the amount of currency reserves and that really meant that Russia progressed substantially in getting better on its financial external position. That's for sure and apart from hard currency reserves, we should take in account yet another financial instrument, which has been created and then in a rapid increase during this decade the one of stabilization fund. You can see here, the figure that stabilization fund grew at a pre-crisis level of something like of 3 trillion rubles roughly at the exchange rate of rubles to dollar at that time that was roughly $117 billion. And that was another yet, important financial pillow to support Russian economy in case hard times come and they came. Well, but that's in a little while. [MUSIC]
