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20 Feb, 2009 14:58

President Medvedev highlights financing and future development in Irkutsk

The stimulus package developed by the Russian government looks good on paper, but implemention is too slow, according to the Russian President, addressing the State Council assembly which took place in Eastern Siberia.

This time the Russian president himself decided to urge members of the Government, and Regional Heads, to speed up stimulus efforts and ensure money finally reaches the ailing sectors of the economy.

“Stimulus measures haven't been implemented efficiently. In some areas there isn't even a way to implement them. We receive alarming reports from all the regions and some companies. Most of them are still unable to get credit. In cases where the loan duration is a year or less, interest rates are at 20% and more. And borrowers can only dream of longer-term loans. We are working far too slowly – unacceptably slowly for the crisis.”

With shrinking national output and slumping industrial growth, state orders from the natural monopolies and defence sector should play a greater role – along with the pursuit of new markets. The employees at a nearby aviation factory say they don’t feel the impact of the crisis. 95% of production goes for export.

The Irkutsk Aviation plant was once the main supplier of war planes to the soviet army. It now makes a range of jet fighters including the world famous Sukhoi family. However, these planes will not fly in Russian skies. They’re booked for India, Malaysia and Algeria for the next 5 years.

Under the joint venture, the Irkutsk aviation plant assembles components for the Airbus aircraft. But in the near future it plans to compete with European producers. A new civil aircraft is being developed here, but the project needs state support according to Aleksey Fedorov, Head of the united Aircraft Corporation.

“We are convinced we can make the plane better than Airbus or Boeing, and bring it to the market earlier than they can introduce their new models. We are ready to cut back on investing in our secondary projects. The main one must be financed to the full.”

In his anti-crisis message Medvedev said that although the crisis is still getting worse the future path for the country is clear. Russia should replace imports with its own goods, boost construction and infrastructure projects and make the whole financial system more efficient.