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Finance minister warns against further dependence on resources-based economy

Finance minister warns against further dependence on resources-based economy
Russia is now at a turning point and its future depends on whether it will be able to get rid of oil and gas dependency over the next 5 to 10 years, according to Russian Deputy Prime Minister and Finance Minister, Aleksey Kudrin.

He shared his view during a meeting at the Federal Tax Service on Monday. He also said that he did not think it was possible to raise taxes in the country since that could slow down economic growth and modernization. “If we choose the wrong path now, in two or three years we will realize that we have to either abandon these plans or raise taxes. But I don’t think that we have a possibility for raising taxes. This would mean and additional burdens on business,” he explained. Last weekend, Aleksey Kudrin took part in the Economic Forum in the city of Krasnoyarsk. Addressing the forum he talked about the challenges of the post-crisis economy. And the tax issue was on also on the table. He talked about it in relation to the pension reform. Kudrin noted that it is not balanced and thus affected “strategic decisions”. In this regard, he brought up the issue of raising retirement age.The minister pointed out that post-crisis economic issues would be dealt with during the election period. Parliamentary elections will take place the December and the presidential election will follow in spring 2012. So he put special emphasis on the necessity of securing fair elections representing all political forces in the country. “It is important that society realize that these elections will be a test, a review of what has been done by the authorities,” he said, adding that fair elections will give the government “a mandate of trust which is essential for economic reforms”. “If there is lack of trust, then we will not be able to fulfill our tasks fully.” While in Krasnoyarsk, he also talked about diminishing the role of the state in the economy and reducing monopolies. “We have not completed the restructuring of our corporations,” Aleksey Kudrin told the forum’s participants. “Some of our private businesses are closer to the government than others. They enjoy administrative support. Mergers and acquisitions, access to resources are often decided in the cabinets of state officials. We need to change that situation dramatically.”

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