Russia's entry into the WTO in August has some economists worried, as pointed out by Vladimir Putin last Wednesday. For years, Russia has used import duties to protect its industries from lower world prices. While consumers will benefit from lower-costing imported goods now made available, firms that have been able to succeed through artificially high prices and a lack of competition will now be vulnerable. This isn't exactly great news for some consumers, however, as their jobs may be at risk. Russia has managed to maintain a lower unemployment rate than the US that has been continuously falling. However, that trend may change as Putin mentions the fact that many of Russia's cities are specialized in one single industry. Worker mobility across sectors is therefore limited.
Putin goes on to say that they need to take measures to prevent the employment rate from falling. My question is what can Russia do to prevent this without using subsidies or tariffs that violate WTO rules?
http://www.chicagotribune.com/news/sns-rt-us-russia-putin-wtobre8ak14w-20121121,0,4780718.story
http://en.ria.ru/business/20121121/177640103.html
I think this could be a good think for Russia in the long run. It will potentially introduce its industries to better technologies and more efficient ways of doing things. It will also free up income that is being spent and instead be saved and then can be used by banks for loans. If the transition is done well Russia's economy should see substantial growth.
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