Alexei Kudrin
Russia's ex-Finance Minister Alexei Kudrin says the country will have tough times ahead REUTERS/Sergei Karpukhin

Russia's former Finance Minister Alexei Kudrin has warned the country faces years of stagnation due to the multilateral sanctions regime against it.

"There will be stagnation, like now. There could be recession. We will be balancing on the edge of recession all the time," he told a Reuters summit in Moscow.

He was the minister for finance for more than 10 years up to 2011 before quitting after a row over government expenditure. He warned that even if there is no extension on Western sanctions on Russia, the economy looks set to lose 1% of growth for the next three years, at least.

"Today the decline of Russian economic growth is not so much the result of sanctions as of the lack of reform of the economic system, at a time when the oil price is not rising but falling. We need another economic model," Kudrin said, criticising the Russian state's model to "temporarily not observe the rules of the World Trade Organisation", which it joined in 2012.

He urged the Kremlin to look at rebalancing the Russian economy away from its dependence on oil and gas exports to the West, looking to new resources in the Arctic and Far East. He also warned the process may be hampered by a Western ban on the import of hi-tech energy equipment.

Kudrin said Russia should pursue a relationship with China but not at the expense of the West, upon which it relies for innovative technology.

He said: "We could make a mistake if we only see a Chinese [policy] vector. We need to understand that for at least 20 to 30 years, we will continue to receive basic technologies from the West."