Economists are predicting a sharp recession in Russia as western sanctions take their toll. As Ivor Bennett reports some investors say they've given up trying to do business in the country.
There aren't many among the Russian elite who will criticise the Kremlin. Alexei Kudrin, though, is one of them. With the economy on the brink, the former finance minister can no longer hold back. (SOUNDBITE) (Russian) FORMER RUSSIAN FINANCE MINISTER, ALEXEI KUDRIN, SAYING: "The current slowdown in Russia is not caused by sanctions, but by not reforming the economic system in an environment where oil prices are not rising but rather falling and our growth is declining. We need a different economic model, and it has not been created." Sanctions though will be painful he says, estimating their impact to be as much as 1 percent of GDP - roughly 20 billion dollars. (SOUNDBITE) (Russian) FORMER RUSSIAN FINANCE MINISTER ALEXEI KUDRIN, SAYING: "There is a recession risk. We will be balancing between zero growth and a contraction. If more sanctions are not imposed, we will be balancing like that for a minimum of three years, and possibly more depending on how the situation resolves." Such candid commentary is rare in Russia. But others are also finding their voice. Thousands marched through Moscow on Sunday in protest at the government's actions in Ukraine. This the first anti-war rally since the crisis began. The official forecast for Russia's economy is a lot more optimistic than Kudrin's of course. But investors aren't taking the bait. US private equity firm Blackstone has reportedly given up on the country. NAB's Tom Vosa thinks others will follow. SOUNDBITE (English) TOM VOSA, HEAD OF MARKET ECONOMICS EUROPE, NAB GROUP, SAYING: "I think in terms of investment, given the atmosphere, given what we are effectively seeing, in terms of expropriation of Russian business assets, and various arrests, and fines by the Kremlin on Western companies, a lot of people will be saying well I might not get a return for 10 or 20 years, if so why am i here?" A ceasefire in Ukraine, agreed earlier this month, had raised hopes of an end to the conflict. But even if it does hold, Russia's economic problems are likely to persist.