Sunday, 5 September 2010

Medvedev: Russia’s economy needs to hurry up and grow

The Russian government should make the effort to speed up the growth of its economy, said President Dmitry Medvedev on Friday, saying that the Russian economy has expanded 4 per cent in the first of 2010.

"We started the year with growth. So far it has not been as inspiring as we want it, but the figures are decent," Medvedev told the International Economic Forum.

He also promised that the government would consider easing the tax burden for companies but only in certain years and on condition of a healthy economic situation in Russia and abroad.

"We will return to the issue of easing the tax burden for businesses in the next few years if the global and Russian economies recover in a favorable way," Medvedev said.

He did say that the capital gains tax for direct investment would be cancelled next year.

Meanwhile the budget needs funds and Medvedev said that he had significantly decreased the number of companies which cannot be privatized.

"I am cutting the number of strategic companies by five times...I have signed a decree to this effect today," he said.

He also suggested the government set up a joint fund with state and private money to develop strategic projects.

"I’ve asked the government to work on the idea of creating a special investment fund where state money will be augmented with private capital - say, we expect one ruble of state investment to attract three rubles of private investment. I think the idea should be implemented within a year," he said.

While much of the speech was somewhat dry, there were a few moments of light relief, most notably in an exchange with a moderator over reserve currencies.

Asked how the Chinese leader felt about the yuan’s role as a reserve currency, Medvedev quipped that he couldn’t speak for Beijing even to “such a beautiful” moderator.

And when asked to advise investors about what he would be buying, the president hit back: “Who? Me, or Russia?”

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