MOSCOW: Prime Minister Vladimir Putin said on Wednesday that Russia was emerging powerfully from the global financial crisis but must reduce its reliance on energy and raw materials to see off external threats to its economy.
In a speech to parliament, Putin did not say whether he and President Dmitry Medvedev had agreed which of them would run in next year's presidential election but underlined his own credentials by outlining his government's economic achievements.
He told the State Duma lower house in his more than two-hour annual report that inflation would not exceed 6.5 to 7.5 percent in 2011 and that gross domestic product grew by 4.4 percent in the first quarter of the year.
But he said Russia also faced unspecified external threats to its $1.5 trillion economy and the country of 143 million people could not afford to sit back after overcoming the worst of the financial crisis.
"Based on GDP, Russia should enter the ranks of the five leading countries (by 2020)," he told deputies, adding that GDP per capita should reach $35,000 by then.
"The current beneficial environment in the raw materials and hydrocarbons (markets) should not make us relax. The oil boom we are witnessing only underlines the need to move quickly to a new model of economic development."
High oil prices helped fuel Russia's economic resurgence during Putin's 2000-2008 presidency and the price of oil, Russia's main export commodity, is up 28 percent this year.
But the economy is over-reliant on energy and raw materials exports, and any fall in the oil price will have a big impact on its overall economic performance unless it diversifies.
"Economic weakness and sensitivity to external shocks result in threats to national sovereignty," Putin said, calling for a decade of "strong, calm" economic development and referring to unnamed groups which he said wanted to destabilise Russia.
"Let's be frank. In the modern world, if you are weak, there is always someone who will come in and unequivocally recommend which way to go, what policy to conduct, what path to choose."
PRESDIENTIAL ELECTION LOOMS
Putin said Russia also faced a risk of wildfires in Siberia and its far east following blazes that caused widespread damage and killed dozens of people last year during a severe drought.
He underlined his intention to keep a lid on inflation one of the biggest threats to economic stability, by saying the unexpected windfall from oil revenues would not be spent and should instead be kept in the state reserves.
Russia has struggled to attract as much direct foreign investment as it wants but Putin said he expected the annual sum to rise soon to $60-$70 billion from $40.5 billion in 2010.
The annual report on his government's work was Putin's last to the Duma before a parliamentary election in December and the presidential election three months later.
Putin, 58, is still seen as Russia's most powerful leader after steering Medvedev into the Kremlin in 2008, and has hinted he may use the March election to return to the presidency or endorse his protege for a six-year second term.
Putin, who regularly features as Russia's most popular politician in opinion polls, said nothing directly about the presidency in his speech but could be keeping his options open.
"By focusing on prospects for growth and acknowledging that economic reforms are necessary i.e. that relying on high oil revenues is not the same option it was during his presidency Putin is looking to ensure that voters do not associate progress and reforms only with Medvedev," said Chris Weafer, chief strategist with Uralsib Capital.
"That is important as he wants to keep his options open ahead of the March 2012 election."
Putin also made a number of promises likely to please voters including putting aside 75 billion roubles ($2.67 billion) for a possible increase in state pensions in August.
Asked about unrest sweeping the Arab world, Putin said policies that benefit the people are the best guarantee against efforts by destabilising forces again unspecified that he likened to bacteria "present even in a healthy organism".
"If we weaken our immunity, we will immediately catch some kind of influenza, but if we maintain our immunity, no political influenza will ever threaten us," Putin said.
"He sounds very pragmatic, very populist, he is saying all the right words about Russian stability, that's good to hear but there is nothing very radical, he does not want to sound too liberal and not too socialist," said Ovanes Oganisian, chief Russia strategist at Renaissance Capital.
Comments
Comments are closed for this article.