Russian President Dmitry Medvedev established a commission on modernization and technological development in May with the aim of helping the commodity-based economy evolve into an innovative one.

During the first session of the commission on Thursday, Medvedev listed five priority fields for Russia to develop its innovative economy, which are energy saving, nuclear technology, space technology, health care and information technology.

Medvedev said it is necessary to begin the process of modernization without delay.

Signs of stability

The government's economic stimulus package has so far taken some effect. Russia's unemployment rate declined to 9.9 percent in May from 10.2 percent a month ago, marking its first fall since last September.

Inflation rate in the year through June 15 fell to 7.1 percent. Officials estimated that this year's inflation rate will stand at 13 percent, 0.3 percentage point lower than last year.

The foreign exchange market and stock market also show signs of stability. The Russian ruble has strengthened to 31 per dollar recently after the government used more than a third of its foreign currency reserves to stem the ruble's depreciation since last August.

The benchmark Russian Trading System (RTS) index and the ruble-denominated Moscow Interbank Currency Exchange (MICEX) index have increased about 60 percent since the beginning of this year.

Russia's Economic Development Ministry said the economy will rebound provided the government's assistance is allocated appropriately and oil prices continue to rise. The revised budget is based on a US$41 per barrel price for the Urals crude, the country's chief export earner, but oil prices have soared above that level already.

Nevertheless, there is a growing concern that a strong ruble will not be conducive to exports. Some experts predicted that ruble will see another round of depreciation. As for the stock market, investors attribute the rally to speculation, saying the upward trend will end soon if there are no positive data.

(Xinhua News Agency June 21, 2009)