On August 17, 1998, the Russian economy was finally punished for the delays in reforms, the lack of fiscal discipline and the overvalued exchange rate: the government was forced to devalue the ruble and default on its debt obligations. This Report discusses the policy options for rebuilding the Russian economy in the light of those traumatic events, their underlying causes and the deep flaws they exposed in the process of reform. The Report draws on new work by economic researchers at the Russian European Centre for Economic Policy (RECEP) in association with a range of top international scholars. It explores the long-term policy challenges in key areas of the Russian economy, including fiscal and monetary policy, the labor market, the financial sector, industrial restructuring and the barter economy.

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Erik Bergl�f is the Chief Economist and Special Adviser to the President at the European Bank for Reconstruction and Development (EBRD). Romesh Vaitilingam is an independent writer and consultant.

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