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8 Feb, 2008 14:00

Putin highlights Russia’s economic achievements

President Putin’s final State Council address has highlighted the economic achievements of his time at Russia's helm and laid out a clear direction for the future. The President emphasised the need for reform to continue, with particular focus on business

Speaking for the final time to the State Council, in the context of having overseen an economic transformation nothing short of profound, Vladimir Putin underlined his vision for the future by highlighting the achievements of the past.

“Over the past two years, there has been a real investment and consumer boom in Russia.  Real incomes over the past eight years have increased two-and-a-half times.  I fully understand what is happening with inflation, price increases, and so on, but the real incomes have still grown two-and-a-half fold. Pensions have also grown nearly two-and-a-half fold and unemployment and poverty have more than halved,” Putin stated.

The President noted that a key part of Russia's economic revival has been the development of the middle class. This is increasingly a driver of the economy, with consumer spending booming and, in turn, is attracting more international investor interest.

“Over the last few years, foreign investment into the Russian economy has grown not a few percent – but seven fold. I’d like remind you, over the previous period, annual outflow of funds was about 10, 15, 20 – even $US 25 billion,” he added.

The benefits of Russia's turnaround have been felt at all levels of society but the President noted that remaining key issues include the country's demographics as well as the need to materially invest in the quality of life.

“I believe in the next three to four years our population will stabilise. Some of our experts, including those in the government, predicted this result only after 10 to 12 years. I think we need to do everything to decrease the death rate by more than 1.5 fold, and increase Russia's life expectancy up to 75 by 2020,” Putin said.

For small business he also sounded a positive note, stating emphatically that bureaucracy needs to be reduced and entrepreneurialism encouraged.

“The state must actively assist people if they wish to change their profession or set up their own businesses. It all depends on an efficient system of ongoing education and personnel training and on how comfortable the circumstances for setting up a small business are. It is still very difficult to start a business because of the activity of federal and local authorities. It's terrible,” he admitted.

He called for the government to focus on efficiency and development, noting that Russia has a wealth of natural resources and that these need to be utilised for future generations.

“The State machine is currently a bureaucratic and corrupt system. It’s not motivated for positive changes or for dynamic development. We need to do away with administrative burdens on the economy which have been a major brake on development.  We must create a system of motivation for departments and officials and a competitive environment that attracts people to the state service, using the best human resources and making them more responsible to society,” Putin said.

With the new administration almost certain to follow the general direction of Vladimir Putin's reforms and political impetus for Russia's economic revolution to continue, focus will now turn to his successor and the details of how these goals are to be achieved.