GLOBAL FINANCIAL CRISIS

Global financial crisis: translation

(2008–2009)

The most serious financial downturn since the Great Depression, the global financial crisis began as a result of weakness in theUnitedStates’ housing market, but quickly spread to world financial markets. As the economies of the U.S. andEuropean Unioncontracted, the effect was felt in Russia, which had experienced an economic boom underVladimir Putin. Plummetingoilandnatural gasprices, the mainstay of the country’sforeign tradedisproportionately harmed the Russianeconomy.The precipitous decline in stock prices, particularly in September 2008, erased significant portions of the oligarchs’ fortunes, allowing the Kremlin to acquire large stakes in formerly state-owned enterprises that had beenprivatizedduring the 1990s. This process has been called a reverseloans for shares program. The rapid rise in the value of the ruble prior to the crisis and a real estate boom further exposed the country to the global contagion. The Russian economic crisis was further compounded by investor uncertainty in the wake of the 2008South Ossetian War, which sparked massive capital flight from Russia. Overall, the steel, real estate, construction, and automobile industries were hardest hit.Unemploymentrose dramatically during the period, especially in the fields of metallurgy and finance. Prime Minister Putin moved to reduce the tax burden on companies, while the new president,Dmitry Medvyedev, worked with other world leaders, including those of theGroup of Eight(G8) andBRIC(Brazil, Russia, India, and China) countries, to solve the global crisis.