SOCHI, Russia (Reuters) - Russia must reduce state dominance of the economy and improve conditions for investors and entrepreneurs to avoid succumbing to even slower growth, Prime Minister Dmitry Medvedev said on Friday.
Medvedev, No.2 to President Vladimir Putin, used an annual investment forum in the Black Sea resort of Sochi to warn that a failure to restructure the economy away from an over-reliance on state investments and spending could lead to stagnation.
"This model, even if it may seem reliable, risks leading to zero growth," Medvedev said in a keynote address. "We must find other sources of growth for our economy, especially those that lie outside the state sector."
"The time for easy decisions has passed," Medvedev said in the televised address. The government recently cut its growth forecast for this year to 1.8 percent, half the rate it was predicting at the beginning of the year.
Medvedev has been talking of the need to reduce the role of the state in Russia's energy-reliant economy ever since he first became Russia's president in 2008, and offered no major new initiatives and few specific recipes.
Medvedev served a four-year term as head of state, during which Putin was prime minister. Putin's return to the presidency last year underlined his dominance of what has over the years come to be called Russia's ruling 'tandem'.
On Friday, Medvedev enumerated a series of measures that have already been announced, such as a decision to cap tariffs on state-regulated services including household gas, electricity and railways next year.
Alluding to corruption that has stifled entrepreneurs as the state's influence has increased during Putin's nearly 13 years in power, the prime minister said it was crucial for investors and business owners to feel they are safe, comfortable - and can make money.
He called for tax breaks for some small and medium-sized businesses and, referring to a "lack of trust in the authorities", said some regions needed to do much more to make investors welcome.
(Additional reporting by Alexei Kalmykov and Alessandra Prentice; Writing by Steve Gutterman; Editing by Douglas Busvine and Susan Fenton)
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