Russian economy’s mono-product era could end in 2028-2030 – Gref

File Photo of German Gref Shaking Hands with U.S. Official

MOSCOW. Oct 4 (Interfax) – The Russian economy might leave its mono-product era behind in 2028-2030, Herman Gref, the head of Sberbank (MOEX: SBER), said.

“When might this mono-product era potentially end? In 2028-2030. The general feeling is and all the trends we have today indicate that there won’t be a repeat of the commodities super-cycle. We need to be ready for this and we don’t have that much time,” Gref said on the Posner program on Channel One television.

The problem is that emerging from a mono-product state is never pain-free, Gref said. “It’s always tied in either with revolutionary manifestations, or with civil war, or with a heavy dependence on foreign countries. These are three classic ways out of this sort of situation,” he said.

He also said there was already some understanding of the outlook for the situation in Russia. “I think that in the past year, maybe two, we have had less and less of the rose-tinted glasses about our future, that prices will recover to $100 [per barrel of oil] and that everything will be fine again,” Gref said.

“Those in power already have a fairly good idea of this situation,” although not everybody is prepared for change, he said. “If we listen to the heads of the commodity producers, can you imagine what it would take to re-profile the business of such a company? This is a huge amount of work and we don’t always want to address it, we don’t always have the resources for it,” he said. Gref said there were a lot of experts who were telling the oil producers “everything’s fine, how many times have you been told this is the end, but you [the oil industry] are still alive and kicking.”

Diversifying the economy will help bring the economy out of its mono-product state. “I very much hope that a beginning to qualitative changes in economic growth, and diversification, which in my view is what the future of our country and our society is all about, will straightforwardly be the main thing on the agenda,” he said.

[featured image is file photo]