IE 11 is not supported. For an optimal experience visit our site on another browser.

Putin’s boasts of Russia’s economic revival

/ Source: The Associated Press

Russia will have no problem weathering the current global financial troubles, President Vladimir Putin said Thursday, boasting of Russia's economic transformation in his eight years in power.

At his annual marathon news conference, Putin barked out a series of figures to illustrate the country's economic progress and then laid out an array of problems for his successor to address.

When Putin took Russia's helm on New Year's Eve 1999, the country was tens of billions of dollars in debt, afflicted by widespread poverty and using a currency that had collapsed the previous year. Now it runs a huge budget surplus and its economy is so strong that Putin predicted it would not be affected by the current international financial troubles.

"It will be quite easy for Russian banks to get through the liquidity crisis," he told the gathering of hundreds of reporters at a Kremlin auditorium.

"We have restored the fundamental principles of Russian economy on an absolutely new market base, and we are surely changing into one of the economic leaders" of the world, Putin said.

Putin's tone was bluff, even truculent, apparently reflecting both his pride in Russia's accomplishments and Russia's belief that its achievements are given short shrift by other countries.

"In 2000, we calculated that more than 30 percent of the population was below the poverty line ...(now) that's less than 14 percent," Putin said.

"The stock index rose 20 percent" in 2007, he said. "Twenty percent — that's not bad as an indicator."

Russia's overall economy is now the world's seventh-largest, he said.

But much of Russia's growth has been driven by record high prices for oil and gas and its other natural resources sectors are substantial contributors. Without a strong manufacturing base as a balance, Russia's economy is potentially highly vulnerable to commodity price fluctuations.

Putin acknowledges the problem
"There are a minimum of two huge problems that have to be solved. These are diversification of the economy and conferring on it an innovative development character," as well as improving the general level of leadership in the country, he said.

In that regard, "it's obligatory for us to adopt an anti-corruption law. There's no kind of pill to fight corruption that you take and then get healthy, there has to be a system of measures," he said.

Putin also admitted that his government had been unable to get inflation under control, noting that the 11.9-percent inflation of 2007 was significantly above the government's expectation of an already-high 7-8 percent.

He did not explain why his powerful government has been unable to tame inflation or corruption, but made it clear he expected the next government to take care of the problems. And he clearly intends to be a part of those efforts.

First Deputy Prime Minister Dmitry Medvedev, Putin's endorsed candidate in the March 2 presidential elections, is soon to give a major address on economic matters in the Siberian city of Krasnoyarsk.