I am a politician from Russia, so I am supposed to talk about Russia today. However, I would like to talk about international economies instead, as we live in a period of globalisation and Russia is becoming integrated in the global economy. The Russian economy faces countless domestic issues and is also under the influence of many external factors. Every year, around the beginning of January, my team and I try to review what has happened in the world economy in the previous year to try and disclose some kind of trend in the new year. We were doing the same thing earlier this year for 2001. Contrary to the more relaxed and still somewhat optimistic general view, we became pessimistic about prospects for the U.S. economy and are very concerned about its impact on other countries. Our observations, analysis, and forecast on this issue are as follows:

1. The U.S. economy was already in recession in December 2000.

2. Banks in the U.S.A. already started pulling back on lending on a large scale at the end of 2000, and interest rates for low quality commercial papers have soared, widening the gap with high quality ones to the highest level since 1990.

3. The U.S. economy will be unable to extricate itself from the recession at least until the beginning of 2002, despite Alan Greenspan's interest rate cuts and George W. Bush's tax cuts.

4. Between now and then the U.S.A. will experience an increasing number of bankruptcies making more than four million people redundant.

5. Both short-term and long-term interest rates will fall, while the dollar will also weaken.

6. The stock market will fall much further with the S&P 500 Index hitting below 990 and the NASDAQ 100 Index falling through 1600 this summer before bouncing back later this year in anticipation of economic recovery.

7. The recession in the U.S.A. will have a major impact on many other countries, especially on those emerging countries whose exports to the U.S.A. account for a large proportion of their GDPs.

8. Economic recovery both inside and outside the U.S.A. will be sluggish in 2002.

I am most concerned about the creation and collapse of the bubble economy in the technology sector led by newly created Internet-related start-ups. When the cost of capital to companies is very low, the distribution of capital tends to become very inefficient, which engender wasteful investments and achieve nothing. In the 1980s Japanese companies were able to raise vast amounts of capital at almost no cost to themselves, and we all know what happened to the Japanese economy. The U.S. situation may be somewhat different from Japan, but we should not underestimate the possible impact of the bursting of the bubble in the technology sector on the economy in general. The idea of a V-shaped or a U-shaped recovery seems to be rather optimistic. We think that it is going to be an L-shaped or even pear-shaped recovery.

^* The Trilateral Commission was formed in 1973 by private citizens of Japan, Europe (European Union countries), and North America (United States and Canada) to foster closer cooperation among these core democratic industrialized areas of the world with shared leadership responsibilities in the wider international system. The members of the Trilateral Commission are about 350 distinguished leaders in business, media, academia, public service (excluding current national Cabinet Ministers), labor unions, and other non-governmental organizations from the three regions. other members. See also: http://www.trilateral.org/about.htm

March 9, 2001