Obama's Promise in 'Tatters' as Russian Economy Recovers

Russia's economy is not in a dire state, despite the double burden of Western sanctions and the sharp fall in oil prices, the Milken Institute Global Conference participants found.

At the beginning of this year, US President Barack Obama said that Western sanctions had dealt a lethal blow to Russia's economy, however, international experts have admitted that Moscow has done better than anyone expected.

"Today, it is America that stands strong and united with our allies, while Russia is isolated with its economy in tatters," Barack Obama claimed during his State of the Union address in January, 2015.

However, both Russian and Western experts at the Milken Institute Global Conference, held on April 26-29 in Los Angeles, strongly disagreed with the statement that Russia's economy lies "in tatters."

Participants of the panel discussion on the future of Russia's economy pointed to the fact that although Moscow faced a ruble devaluation at the end of 2014, the Russian currency has already stabilized. Furthermore, the Russian stock market has recovered 20 percent in 2015 and  Russian retailers are enjoying higher margins in the absence of their Western competitors, experts noted.

Investment banker Ruben Vardanyan explained that the collapse of the ruble has not had a devastating impact on Russia's economy since approximately 90 percent of the population of the country is not dependent on imported goods.

Mr. Vardanyan stressed that President Vladimir Putin has been enjoying growing public support in Russia despite the sanctions' pressure.

According to American businessman David Bonderman, the founding partner of TPG Capital, Western sanctions have in fact created new opportunities for investment in Russia. "Returns tend to be higher where either the troops are in the street or prices are low," he noted.

At the same time the American businessman bemoaned the fact that the US sanctions policy has acted as a catalyst for Sino-Russian rapprochement.

In turn, Susan Eisenhower, chairman and CEO of the Eisenhower Group, insisted that isolating Russia "isn't in the United States' interest," pointing to the growing risk of nuclear proliferation. She stressed the importance of US-Russian bilateral activity in this field.

According to Eisenhower, Washington should take steps to resolve the conflict, appointing a special envoy to Russia to hold talks regarding the fate of Crimea.

On the whole, the panel participants unanimously condemned the US policy toward Russia as ineffective and nearsighted.