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30 Jan, 2012 12:55

Expert: Putin needs to change Russia's image to attract investors

Economic reform is necessary to make the country stronger and more competitive, Prime Minister Vladimir Putin wrote in pre-election article for the Vedomosti Daily.

The challenge of the Russian economy becoming more competitive just got harder with it’s entry into the WTO. Currently more than a quarter of Russia’s GDP comes from raw material exports and the lion’s share of consumer goods and technology comes from abroad, which makes its economy quite dependent on foreign markets, Putin writes.“It is really imperative for the Russian economy to change. And, I think, Putin understands that . I think that he would like to ensure that Russia’s image as an investor destination has changed a little bit,” comments Ivan Chakarov, Chief economist for Russia and CIS at Renaissance Capital, in an interview with Business RT.Putin repeats the mantras of privatisation and innovation being the keys to reforming the Russian economy.Investment also remains on top of Russia’s economic needs, with an investment to GDP ratio currently standing at a low of 20%. Increasing it to 25% should become a priority Ivan Chakarov, Chief economist for Russia and CIS at Renaissance Capital, tells Business RT.“I think, this is really going to be the key in ensuring Russia achieves sustainable medium term economic growth,” says Tchakarov, adding that a 5% GDP growth is quite real and reasonable for Russia in the coming years.For more on the views of Renaissance Capital’s Ivan Chakarov, watch online at RT Business.