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Russia able to overcome economic difficulties: PM

Xinhua, January 14, 2015 Adjust font size:

Russia has all resources to overcome the current economic difficulties, Prime Minister Dmitry Medvedev said Wednesday.

"We have enough reserves to smoothly adapt the economy to the new conditions," Medvedev told the annual Gaidar economic forum.

A stable foundation has been laid for Russia to get healthier economic growth, Medvedev said, referring to low federal debt, sufficient reserves and safe unemployment level.

"Our most important socio-political advantage is the unprecedented consolidation of the society and the high level of civil support for the authorities. This allows us to solve many major tasks," he stressed.

Admitting that Russia's ruble is threatened by low oil prices and Western sanctions, Medvedev noted that free conversion of the ruble would not be canceled while the Central Bank has conducted correct currency policies.

"We are not going to eat through our currency reserves. We have enough tools to ensure the ruble's stability. Even in poor circumstances we could keep a positive trade balance," he said.

The prime minister also demanded that the governmental expenses be cut and quality of major projects be improved.

Russian Finance Minister Anton Siluanov said at the forum that the ministry has planned to propose to the State Duma, the lower house of parliament, to cut 2015 budget expenditures by 10 percent or even more.

According to Siluanov, the budget will have to be cut by 3 trillion rubles (45 billion U.S. dollars) if oil prices stay at 50 dollars per barrel.

Moreover, Medvedev named freedom of business "absolute imperative" for the government, calling for the removal of "suffocating" restrictions on entrepreneurs by the administration and law enforcement departments.

"The state alone, without business, is unable to change the model of economic development," he said, adding that an anti-crisis governmental fund of over 180 billion rubles (around 2.7 billion dollars) has been allocated this year to "unleash business initiative."

"Another 26 billion rubles (391 million dollars) is planned for the fund in the next three years," the Itar-Tass news agency quoted Medvedev as saying.

Meanwhile, Medvedev vowed that Russia will always fulfil its international obligations even in an economic predicament and guard its reputation as a reliable borrower, creditor and supplier.

Echoing Medvedev's generally positive attitude, Russian experts have told Xinhua that current difficulties, such as the slump of world oil prices, could provide possibilities for Russia's economic restructuring in order to get rid of the energy-dependent growth model.

"The severe situation might force the government to ease taxation burden on businesses and to improve business climate," said Andrei Lusnikov, an oil analyst with Finam Investment Company. Endi