Heat wave hits Russia growth as fires rage
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Russia's deadly summer heat wave could wipe up to US$14 billion off economic growth, economists said yesterday, as wildfires raged on in several provinces and forecasters said sweltering weather won't abate this week.
The worst heat wave on record could knock 1 percentage point off gross domestic product, according to estimates, weakening a recovery from a 2009 slump due to the global financial crisis.
Before blistering temperatures parched crops and stoked wildfires that have shrouded Moscow in smoke, the economy had been expected to grow about 4 percent in 2010 after dropping by 7.9 percent last year, the first contraction in a decade.
The drought also threw up a fresh barrier to the Kremlin's dream of cutting dependence on oil and commodities by developing and modernizing other sectors such as agriculture.
The government backed a proposal by Emergencies Minister Sergei Shoigu late on Monday to pump 54 billion roubles (US$1.81 billion) over the next three years into the firefighting force, whose weaknesses have been exposed by the wildfires.
Critics called the investment too little, too late, warning it would not fix a fire-protection system they say has been gutted by shortsighted legislation and sorely lacks equipment.
The cash injection will go towards top quality aircraft and trucks, Shoigu said.
Stanislav Belkovsky, a political analyst and Kremlin critic, said the spending "will not solve the problem at all."
Russia needs tens of thousands of firetrucks and dozens of planes that are no longer made domestically, he said.
Shoigu pledged to have all fires in the region ringing Moscow extinguished by the end of the week. His ministry said the area covered by wildfires across Russia was unchanged yesterday, with firefighters battling 557 fires covering 1,740 square kilometers.
The Emergencies Ministry said 42 aircraft and almost 166,000 people were fighting the blazes.
Acrid smoke has hung over the Russian capital for weeks, and Moscow's top health official said on Monday that twice as many people were dying every day as in normal weather, with the increase largely due to the heat.
In the province that surrounds Moscow, the mortality rate was up by one-quarter over the last three weeks, Interfax quoted the provincial health minister as saying yesterday.
The heat wave, the worst in Russian history according to the state weather forecaster, has aggravated a drought that has driven world wheat prices up at the fastest rate in over 30 years and raised the spectre of a food crisis.
Testing of Russia's Iskander interceptor missiles, which the Kremlin has used as a card in efforts to avert a buildup of US and NATO military force near its borders, has been delayed due to fire damage last week at a military base, Interfax reported.
