Faced with the triple whammy of plunging oil prices, currency volatility and Western sanctions, there's no dearth of challenges for Russia's ailing economy, but Deputy Prime Minister Arkady Dvorkovich said what hurts most is the scarcity of financing for new investments.
"The shortness of financing for new investments is where the Russian economy is being hit in the most important way," Dvorkovich told CNBC on the sidelines of World Economic Forum on East Asia in Jakarta.
"How do we deal with this? We are working with new partners. This is why we are in China, in other countries, looking for new partners who can bring new investments into the country," he added.
Russia's economy, which grew by just 0.6 percent in 2014, is expected to enter a deep recession this year under the weight of lower oil prices and sanctions, which have compounded the country's underlying structural weaknesses and undermined business and consumer confidence.
Earlier this month, the International Monetary Fund (IMF) slashed its growth outlook for the country, forecasting a contraction of 3.8 percent in 2015 and 1.1 percent in 2016. Its earlier estimate was for a contraction of 3 percent this year and 1 percent next.
Nevertheless, Dvorkovich says the country has built up enough reserves to weather the rout in the commodities market.
"We were not counting on higher oil prices in our economic policies. We were saving some money for the times like what we face now, so we have reserves that allow us to smooth this stage and to help poor families and increase unemployment benefits," he said.
As for the precipitous fall in the ruble over the past year, Dvorkovich said the implications are not all negative as it gives Russian manufacturing and agricultural exports a pricing edge in global markets.
From economics to geopolitics
Responding to criticism over the Kremlin's decision to lift a self-imposed ban on supplying a sophisticated missile air defense system to Iran, Dvorkovich said: "We are not breaking any sanctions."
"We will fulfill our commitments and responsibilities in full compliance with international legislations. Our partners shouldn't doubt that we would work in that manner," he said.
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The end to the ban on shipping the S-300 surface-to-air missile system to Iran, which had been in place since 2010, was spurred by the recent progress in talks over Tehran's nuclear program. The U.S. and Israel, among the most vocal critics, fear the S-300s could be used to protect Iranian nuclear sites from future airstrikes.
As for Moscow's deepening ties with Pyongyang, Dvorkovich, said "we are friendly countries to each other."
"We are long standing partners with North Korea. The political and economic systems are different, but it requires big investment especially into infrastructure. We will continue our consultations, and we will be work in a way that is predictable and safe for both partners as we did before."