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VLADIMIR PUTIN SET THE COURSE FOR LIBERAL POST-CRISIS DEVELOPMENT

Premier Putin called the hopes that interference of the state would solve all problems “illusory” and set the course for liberal post-crisis development.


“Recession is over,” Deputy Premier and Finance Minister Aleksei Kudrin announced. Prime Minister Vladimir Putin admitted that the current economic situation was better than he had expected (prices would rise 11% or even less than that instead of the expected 12%, GDP would drop 8% or less and not the anticipated 8.5%).

Economic Development Minister Elvira Nabiullina would not change the officially accepted macroeconomic forecast for 2009 for the time being. Still, even Nabiullina agreed that the GDP drop might amount to under 8%. The minister said she was worried about the domestic demand for consumption and investments but knew that her fears would be alleviated or confirmed only after the third and the fourth quarters of the year. Aleksei Ulyukaev of the Central Bank in his turn announced that the financial authorities were pleased with the inflation dynamics too. Kudrin was convinced that things were finally looking up and that an increase of investment activeness was in the offing now.

“The government is working on the modernization agenda, on the so called strategy of withdrawal,” Putin said. A government official meanwhile announced that everything and everyone was focused on post-crisis agenda formation and that ministers had until mid-October to formulate their ideas. “It is not the end, the crisis and its corollaries will keep hitting us yet. All the same, it’s time we began working on the post-crisis development agenda. The premier set the trend, yesterday,” he said.

“The crisis is not through with Russia yet,” Kudrin acknowledged. “At best, Russia will need 3-4 years to leave it behind.” “Four years, sure,” Ulyukaev agreed.

“It is not the rate of recovery that counts, it is quality,” Putin announced. He said as well that curtailment of anti-crisis programs at this time would be wrong.

In the meantime, the government appeared to be through with crisis methods of work and management. “No more manual control,” the premier said. “The hopes that total interference of the state with economy will solve all problems are illusory.”

Putin emphasized the necessity of systemic solutions now as the only guarantee of a stable post-crisis development. He promised a steady and deliberate decrease of the state interference with economic matters and broader application of traditional free enterprise instruments like privatization.

Kudrin said the state was going to privatize its interests in businesses and particularly in financial, oil, and telecommunications sectors of economy. Nabiullina announced that the list of assets to go under the hammer might include Sovkomflot, Rosagroleasing, some ports, and airports. Kudrin explained in the meantime that complete withdrawal of the state from major businesses and banks was a matter of some distant future yet. The state would continue to increase its presence in them for the time being, he said. (Nabiullina added that it might happen to AvtoVAZ in the near future – in return for another government support package.)

Arkady Dvorkovich announced that the Presidential Administration backed the Cabinet’s policy of state interference restriction.

“Putin is altering the policy. This is a new turn… this is second wind,” government presidium member commented. Another government functionary agreed that economic policy was about to change. “There will be changes soon, just like in the early 2000s.”

“Yes, resolute measures are needed,” Yevgeny Yasin of the Supreme School of Economics said. “Businesses ought to finally realize that nobody is going to give them money but that they are about to be given freedom instead.” According to Yasin, it was his own policy that Putin was about to correct now. “Putin and his team have been doing everything they could to subdue businesses ever since 2003… If Putin wants liberal reforms, he should retrieve Herman Gref’s old program 2000 and carry out what he did not carry out then. No need to invent any new post-crisis development programs.”

“Sure, we want liberalism too, but things in general being what they are, we cannot do without government support,” admitted senior executive of a major company whose future literally depends on the state at this point.

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