Russia serious about change, Medvedev tells West

18th June 2010, Comments 0 comments

President Dmitry Medvedev promised the West on Friday that Russia was serious about economic reform, saying it needed a boom in foreign investment to modernize its economy.

"We are truly modernising Russia," Medvedev, Russia's third post-Soviet president, told business leaders in a keynote speech at the annual economic forum in its second city of Saint Petersburg.

"The changes take time but it will happen," he said in the city founded by Tsar Peter the Great to serve as Russia's window to the West.

"Russia understands the tasks ahead and is changing for itself and for the rest of the world," said Medvedev.

Medvedev -- who took over the Kremlin from his strongman predecessor Vladimir Putin in 2008 -- has made modernization a mantra of his presidency but has been criticised by economists for failing to follow rhetoric with actions.

In a surprise announcement warmly welcomed by the audience, Medvedev said that from 2011 Russia would abolish capital gains tax for long-term direct investment.

"Russia must become a country which attracts people from around the world to realise their dreams," he said.

He also promised more relaxed visa policies for qualified foreign businessmen working in Russia and a strengthening of the legal basis for business.

"Russia needs a genuine investment boom," said Medvedev.

The Saint Petersburg Forum, sometimes dubbed "the Russian Davos" after the annual get-together in Switzerland, is Russia's most important platform for showing off its economy to the world.

Medvedev asserted that Russia was emerging from the economic crisis with decent economic growth of around four percent in the first five months of 2010.

He also emphasized that the oil- and gas-rich country was being spared the budget crises currently besetting some European Union states, even if Russia had to tighten its belt.

"We have no problem with our sovereign debt. It is minimal," said Medvedev.

But he added: "We do not have so much money in the budget for structural changes. What we have we can and must use in a different way -- more effectively and result-orientated."

© 2010 AFP

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