Businessman urges revival of demand

Bloomberg

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"We will not need to use at full scale the production capacity we have at present, be it steel, copper, nickel or zinc," Deripaska said in an interview in Lima, Peru, where he accompanied Russian President Dmitry Medvedev to the Asia-Pacific Economic Cooperation forum. "We have to clear that heap of excess waste that has accumulated. It will bottleneck the economy until we use it up."

Russia, the world’s biggest supplier of natural gas, nickel and aluminum, faces rising unemployment as plunging commodity prices slash export earnings. An economy that’s expanded at 7.1 percent a year since 2001 may slow to 2 percent next year, Arkady Dvorkovich, Medvedev’s economic aide, said last week.

The government should counteract the slide in demand by stocking up on raw materials at bargain prices, Deripaska said. The state should then use its purchases to build pipelines, bridges, housing and schools, revitalizing the nation’s crumbling infrastructure and removing stockpiles that are braking growth, he said.

Demand for Russian oil, metals and agriculture products will drop next year as the global crisis peaks, Finance Minister Alexei Kudrin said last week. Russia recently approved plans to spend 13.5 trillion rubles ($491 billion) through 2015 to develop transportation.

"We have to live modestly for the next two years, helping the state to use resources in a more efficient way," Deripaska said Nov. 22. "Our task is waste reduction."

Russia has pledged more than $200 billion for measures to battle the country’s worst financial crisis since 1998, including $50 billion for companies that have debts with lenders abroad. Nickel has plunged 62 percent this year and aluminum is down 27 percent this year as auto plant shutdowns suggested global demand for industrial metals will continue to slow.