Putin pledges support for ailing industries

14th September 2010, Comments 0 comments

Russian Prime Minister Vladimir Putin on Tuesday pledged his support to the country's struggling auto and aviation industries even though experts warn against writing a blank check to producers.

"We often hear: why suffer with our domestic producers when almost everything can be bought abroad -- you can buy planes, marine vessels, cars and even some weapon systems. Yes, you can."

"You can buy everything with oil and gas. There's money," Putin told a regional conference of his United Russia political party in remarks released by his government.

"But I am deeply convinced: the de-industrialisation is an absolute dead-end for Russia. And it's not about ambitions and talk about national prestige but about healthy, pragmatic calculations," Putin said at the meeting in Nizhny Novgorod some 400 kilometers east (250 miles) of Moscow.

Russia has introduced high import duties on foreign-made cars to support domestic players and during the economic crisis the government stubbornly supported the country's largest but ailing carmaker AvtoVAZ which makes the Soviet-era Lada boxy car.

Last month, Putin personally drove over 2,000 kilometers (1,200 miles) in a canary-yellow Lada sports car through Siberia in what was widely interpreted as a gesture to endorse the home-made brand.

In July, Putin told the country's flagship aviation company Aeroflot to buy more Russian-made aircraft even though some experts doubt their quality.

Critics have repeatedly said that domestic industries like carmaking may never improve if Putin's government continues to blindly support Russian producers.

Russia, which opened negotiations to join the World Trade Organisation in 1993, is the only major world economy that is not part of the Geneva-based body.

Russia is heading for presidential elections in 2012 and the government is also keen to avoid social unrest at any cost, analysts say.

Separately, Putin said Russia would extend its "cash-for-clunkers programme" into the next year, saying the government would allocate 14 billon rubles (458 million dollars/352 million euros) to support it.

The government launched the programme in March to encourage drivers to trade in old cars for new ones in order to prop up the domestic market.

© 2010 AFP

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