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PM: Russia ‘will not collapse without petrodollars’
January 24, 2013, 11:30 am


Russian Prime Minister Dmitry Medvedev speaks at the 43rd Annual Meeting of the World Economic Forum in Davos, Switzerland. [AP]

Speaking at the Davos Economic Forum Russian Prime Minister Dmitry Medvedev has highlighted the strength of the Russian economy and said it is not as dependent on oil as many believe.

“Russian economy will not collapse without petrodollars,” said the Prime Minister.

“Most of the growth in recent years was ensured not so much by oil and gas revenues, but rather by increased production of consumer goods and services.

“In future our policy should lead to significant increase of exports of food and intellectual services,” said Medvedev.

Russia is not looking for higher oil prices and feels comfortable with the current one.

“The current level of oil prices is more or less perfect for both manufacturers and consumers,” Medvedev added.

The Prime Minister has stressed on the need to attract more foreign investment, seeing them as one of the key drivers for Russia’s economic growth.

“In order to achieve the desired indicators of economic growth, and we define it as 5 per cent a year, the investment should grow for several consecutive years at least by 10 per cent,” Medvedev said.

He outlined a ‘scenario of development’ for Russia that includes green growth in which the government embraces necessary reforms, reduces its reliance on commodities and improves social cohesion.

Pitching international investors against domestic ones will be one of the priorities to make Russia more competitive.

Medvedev called for the creation of a more “competitive environment, both domestically and globally.”

He also voiced the country’s plans on privatisation that will bring more revenue this year than in 2012; as well as scaling down the government’s involvement in economy.

The Russian government plans to sell a large stake in oil giant Rosneft.

“The share of state participation in economy is going down. These are objective facts,” Medvedev said.

“The government is selling a part of the stake in Rosneft.  That is privatisation. Where the government went to an asset, it sells another basic asset. So it is compensated. For example in Rosneft in this case and a huge stake will be sold.”

The negative outlooks for the country’s development were also negated by German Gref, CEO of Sberbank, who reassured the audience that Russia’s financial sector is in much better shape and the ratings do not reflect reality.

“If it were so, then they would buy us. But last year Sberbank bought banks in difficult financial condition in more than ten countries,” he said.

He also noted that that these scenarios are of a possible negative development of the country’s economy, “when nothing is done in the country, then it is developing as it is developing.”

Many experts are, however, unanimously agree that the country needs significant infrastructural changes.

The Prime Minister said he expects the Russian economy to grow by at least 3 per cent in 2013.

“I do expect 3 per cent growth too, but hope for more. 3 per cent is an average, that the global economy, the Russian Federation and global economic growth count on.

“But we need to try to make it more significant. This is, by the way, one of the priorities of Russia’s presidency in G20,” the Prime Minister said during a breakfast with foreign investors arranged by VTB Capital on the second day of the Forum.

Daria Chernyshova