Putin promises Russia 'new economy' after protests

30th January 2012, Comments 0 comments

Prime Minister Vladimir Putin promised Monday to build a "new economy" in Russia as he admitted its prosperity was still held back by a litany of ills despite his 12-year domination of the country.

In a bid to show he remains Russia's best hope for economic stability after a wave of protests, Putin admitted the country faced "systemic" corruption, an "unsatisfactory" business climate and an "inadmissible" dependence on energy exports.

Putin's pledges came in an article for business daily Vedomosti, the latest in a series of wordy tracts setting out his vision for Russia ahead of the March 4 presidential poll where he plans to win a third Kremlin term.

"To have an economy that neither guarantees us stability, sovereignty or well-being is inadmissible for Russia," said Putin.

"We need a new economy with competitive industry and infrastructure, with a developed services sector, with effective agriculture," Putin added.

He appeared to acknowledge the failure of the much-heralded modernisation programme of his protege President Dmitry Medvedev, who Putin plans to succeed as Kremlin chief after his four-year stint as prime minister.

"On the initiative of President Medvedev in the last years we embarked on a number of reforms aimed at improving the business climate. There has been no noticeable breakthrough so far," he said.

Putin painted a stark picture of the corruption that has sprouted in Russia in the last years and left it a lowly 143 on the latest anti-corruption index published by watchdog Transparency International.

"The costs (of bribes) for a business vary -- you pay more or less depending on how well disposed certain people within the state mechanism are towards you," said Putin.

Vedomosti, one of Russia's few newspapers to have been consistently critical of Putin, printed his article in full but lambasted him in an accompanying commentary for failing to make clear how the reforms will be implemented.

"The word 'must' is used in the text 32 times, the word 'will' 19 times, 'need' 17 times and 'necessary' 11 times," said Vedomosti.

"But who is it that 'must'? And what has he (Putin) been doing all these last years?" it asked.

It said Putin failed to understand that major economic change was impossible without political reform. "For Putin, the economy is still a boring chapter in a textbook that is strictly kept separate from the 'politics' chapter."

The article comes days ahead of a new rally on Saturday by the anti-Putin protest movement which hopes to attract tens of thousands of people in a march through Moscow exactly one month before the presidential elections.

Andrei Yakovlev, pro-rector at the Higher School of Economics in Moscow, told AFP that the article was of a "pre-election nature -- it does not mention any painful methods to solve these problems."

"It's hard to see in what way the business climate is going to to be improved and corruption restrained."

Ivan Tchakarov, chief Russia economist at Renaissance Capital in Moscow, said: "These are all lofty goals and Putin deserves credit for explicitly enumerating them. However, as always, implementation will be key."

Putin said that Russia was still battling the legacy of the Soviet Union's collapse which caused a "de-industrialisation" of Russia, an over-reliance on energy exports and a loss of quality in the manufacturing sector.

As a result, Putin said, Russia had become dependent on importing consumer and high-tech goods while remaining hugely vulnerable to fluctuations in the price of its energy exports.

Meanwhile Russia's labour productivity was "two to three times" less than developed economies, a problem which Putin said could be solved by the mass creation of new jobs for a new generation of "educated and ambitious people".


© 2012 AFP

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