2 February 2013, 14:26

Russia faces five years of modernisation

Russia faces five years of modernisation

This week Russian Prime Minister Dmitry Medvedev has submitted the government’s strategic plans for the period of up to 2018 when the next presidential election is due. Russian President Vladimir Putin was the chairman of the extended cabinet session.

The prime minister made a detailed report in which he specified the key directions of the country’s development in the post-crisis period. Emphasis will be laid on modernizing the social sphere and the infrastructure, technological overhauling, updating the business environment and improving the state management system.

Dmitry Medvedev believes that a drastic change in the social and economic situation in Russia would only be possible if the economy grows by at least 5% a year. Meanwhile, at present the growth rate is only 2%, so the government would have to work in a difficult situation. Vladimir Putin announced that a return to the pre-crisis model was out of the question.

The president is convinced that Russia should not go with the stream adjusting to the development trends of the world financial and economic system. Russia should take an active part in determining priorities, especially because it enjoys fundamental advantages for investment and a more important role in global processes.

“Russia has one of the most capacious markets in Europe and even in the world. Here we should also add the potential of the Customs Union and the common economic space. We have natural resources, a basic infrastructure and a high general education level of our citizens. According to experts, Russia is one of five countries potentially attractive for investment. Our aim is to turn this potential into real investment and create new manufacturing and new jobs.

Vladimir Putin pointed out that for many years the growing consumption in the US and Europe was the motive power for the world economy but now this mechanism is malfunctioning. So as to whip up the demand, developed economies burdened with debts are employing standard methods that they used to criticize. One of them is printing banknotes. The consequences of this policy are unpredictable. Against this ambiguous background, Russia should raise its competitiveness and its citizens’ social security.

To achieve this aim, the president believes, the Russian economy should develop much faster than the rest of the world. Mechanisms for boosting the development are creating millions of new jobs, fighting corruption, implementing large infrastructural projects, raising the population’s incomes and expenses, as well as raising labour productivity. It is also important to take advantage of the WTO membership. We should also remember about consolidating democratic and public institutions, as well as law enforcement.

Prime Minister Dmitry Medvedev, in turn, announced that the government’s main task was to raise people’s living standards and create conditions for people’s personal fulfilment. The government has managed to keep people’s incomes intact and to reach a steady growth of the GDP. This trend should be developed.

“We should consider both the real state of events and the global trends that have taken shape in the world economy and finances, so as to be able to adequately respond to their challenges. I mean setting up a new technological basis for further growth in a situation when non-material factors, such as education, science and health protection, are gaining in importance. The demand for our traditional articles of export is falling, so we should think about the future. The budding post-crisis improvement is unstable and general uncertainty remains. For this reason the next five years are of paramount importance. This would be the time for the post-crisis world to take new shapes and new technological and social alliances to be established.”

The prime minister pointed out that the potential of the model of the Russian economy focused on exports of raw materials has run dry. Medvedev described the growth points for the next five years, such as creating a favourable business environment, integrating into the Eurasian, European and Pacific markets, as well as a global technological overhaul.

“This is all today’s reality. We should create adequate conditions for innovations with the help of taxation and budget reforms, customs and anti-monopoly regulations. We’ll be able to provide the necessary growth rate of the economy only on the basis of mass introduction of advanced technologies.”

Some other important tasks are raising the effectiveness of the management system, preserving the traditional industrial potential and competitiveness of agriculture with the aim of Russia regaining the role of one of the world’s leading agricultural states. Special emphasis will be laid on building a modern infrastructure, such as roads, ports, air communications, the Internet and energy networks. The state would assist Russian citizens in solving their housing problems and modernizing the social sphere. In particular, the parliament is planned to adopt all laws associated with the drawn-out pension reform this autumn.

First Deputy Prime Minister Igor Shuvalov expects hard work for the government in the next five years.

“We should be brave and disciplined to put all the ideas into practice and prove to people and ourselves that we are capable of carrying out such ambitious plans.”

In his report Dmitry Medvedev promised that the work of the government would comply with the president’s decrees signed straight after his inauguration and the president’s message to the Federal Assembly. Medvedev did not rule out that the government would sometimes have to take painful steps but the main task is to transform present-day challenges into sources of the country’s stable development.

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