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9 Jun, 2008 20:48

State interference in economy to be reduced: Russian Deputy PM

Russian First Deputy Prime Minister Igor Shuvalov has caused a stir at the St. Petersburg Economic Forum by unveiling sweeping plans to reduce state interference in the economy.

While some called it a sensation, others were more cautious about whether he would deliver on the promise.

Either way, Shuvalov’s comments sparked a significant reaction when he stated that one of the government’s main aims was to limit state control of Russia’s financial affairs.

He said: “Soon we will rotate the boards of directors of different companies that are fully government owned. We aim to replace the government officials and replace them with managers. We will also implement new forms of corporate government, and governmental corporations, making them clear.”

Shuvalov also spoke of a plan to cut the number of Russian firms classed as strategic and thus closed to privatisation.

His speech came alongside statements from President Dmitry Medvedev and others on his team that Russia is set to become more integrated into the global economy. They spoke of wanting to diversify from the country’s dependence on oil and gas.

It was the kind of rhetoric that went down well with the influential foreign investors at the forum.

The president and CEO of Coca-Cola, Muhtar Kent, said: “What we got out of it was a very open, very frank discussion with the new leadership of Russia. And I think we all come away feeling very confident about the future of this country.”

But there were others who were more sceptical about what they heard, including the Russian Union of Industrialists and Entrepreneurs. They warned that overhauling the government's relationship with business would be a difficult task as it would meet stiff resistance from those who would lose out.