Kudrin: Diversification of Russian economy is possible

Russia’s Former Finance Minister Alexei Kudrin told Itar-Tass on Thursday that the Russian government could diversify the Russian economy if it had enough political will and desire to correct the existing shortcomings in the country’s fiscal system. “To achieve diversification, it’s necessary to liberate the potential of other branches of economy and liquidate full and complete dependence on the energy sector,” Kudrin said at the opening of the Russian Business Week that kicked off in London. Kudrin called for creating conditions for businesses to produce goods and services directly in Russia, thus substituting for imports. “To achieve this goal it’s necessary to follow the example of advanced Russian regions such as the Kaluga, Kostroma and Leningrad regions as well as the Republic of Tatarstan, and build competitive industrial enterprises,” Kudrin said. “Besides, it’s necessary to have available resources, means and acceptable rates,” the ex-finance minister added. “If the business sees comparable conditions, it will head for the regions,” Kudrin explained. Diversification is another vital factor to improve the investment climate in Russia. “It’s necessary to pay more attention to the situation in the financial market and keep the rates low. I think that such an investment potential can be realized in two or three years of result-oriented work,” Kudrin told Itar-Tass. He also thinks that a more efficient budget could contribute to a quicker solution of the assigned tasks. Kudrin added that target-oriented distribution of funds was the way to raise the budget efficiency. Kudrin believes that diversification of the Russian economy will take its natural course, primarily because the share of the oil & gas sector is bound to decrease in future due to natural causes. Kudrin’s speech, who at present is the dean of the department of free arts and sciences at the St. Petersburg State University, was central to the first day of the Russian Business Week. This forum, which traditionally takes place at the London School of Economics, will end with a gala reception on March 16. The current 6th conference is devoted to major problems and most probable perspectives for development of the Russian economy and financial market. The purpose of holding the Russian Business Week is to improve Russia’s business image in the eyes of the world community and create the floor for constructive discussions on problems of Russian business and future challenges. The conference is being attended by leading Russian and British financiers, bankers and analysts. They will exchange views on the current state of Russian economy and suggest options for actions to raise its efficiency in crisis conditions.