Oleg Deripaska - Quotations

Quotations

Deripaska made the following comments following the meeting of APEC Leaders in Lima, Peru, where he accompanied Russian President Dmitry Medvedev and led the Russian delegation to the APEC Business Advisory Council:

Today we have a huge stock of exchange goods, which are still being produced, because you can't shut the production capacity at once.... until the world uses up the stock, there won't be a phase of growth in the real economy. Now it's important to come through the period before the supply meets the demand. In March–April we'll touch the bottom and we'll have a clear understanding of the demand and supply proportions. We have to live modestly for the next two years, helping the state to use resources in a more efficient way. Our task is waste reduction. The crisis won't last long. There is a crisis of overcapacity in production that each country will have to deal with. We can expect a decrease in production capacity by between 20 and 50 percent globally and I am afraid Russia will see some of it too. A new partnership between the state and the business community is needed. We can bet on investment in housing and infrastructure. Investment in housing, roads, schools and utility services will help to keep afloat a chain of other sectors such as construction materials, machine-building, metallurgy. Such projects will also help to employ people who will lose jobs in other sectors. There will be losses from the crisis indeed; the task is to make them minimal. Businesspeople should trim their businesses, leaving only structures that will be needed in the next 15 years, while the government should attract new resources. The state should help those who suffered most. We (businessmen) will survive one way or another, while the crisis may ruin many ordinary people. Some of them (other entrepreneurs) are trying to save production capacities and keep prices high, waiting for a (recovery). This makes it difficult for others to restructure. For instance, high domestic prices for metals do not allow the production of cheaper cars. The hand of the state should become visible and solid. It is the government's responsibility to find the right balance between supply and demand, to find a price balance. This requires manual control. We are a lucky country in a way. As opposed to the West, where most basic consumer demands are already met, Russians tend to spend rather than to save once they get money in their hands. For instance, in more than 12 million families more than one generation live under the same roof. There is a huge objective demand for housing, and people will buy apartments if they are offered them at reasonable prices. The same goes for cars and many other things.

Deripaska’s interview on prospects of Eastern Siberia and Russian Far East development:

Today we are given the rare and truly historic opportunity of taking a giant leap forward in the development of Eastern Siberia and the Far East, to create a modern infrastructure with comfort in mind, to dramatically improve the quality of life. In the coming decades Asia – particularly China, Japan, Korea and then India – will become the center of the world's demand for key manufacturing resources. China is already consuming approximately 40% of the world production of aluminum, nickel and copper, and half of all the coal mined – and it's demand will only grow. And Eastern Siberia has enormous production and scientific potential, which, if developed in hand with the creation of the necessary logistic and energy infrastructure, and if built to meet the demands of a growing Asia – will allow us to turn the region into one of the powerhouses of the Russian economy in the coming decades. I think we can benefit the region tremendously by doing what we do best – by developing business. We have some grasp of the economic trends in the region and can therefore anticipate the directions of growth and the areas in which we should invest. For example, the region requires an adequate transport and logistic infrastructure – an obvious thing, just like internet in schools and cellular communications. The region needs a unified Siberian transport company centered on Irkutsk – in order to better connect cities in the area. It's currently easier to get from Australia to Moscow, then to get from Moscow to one of the northern cities in Irkutsk Oblast, and that needs to change.