Medvedev: Russia Must Become a ‘Country of Dreams’

Dmitri Medvedev at the opening of the St. Petersburg International Economic Forum, June 18, 2010. Source: Mikhail Klimentev/RIA Novosti

In remarks today at the official opening of the St. Petersburg International Economic Forum, Russian President Dmitri Medvedev spoke about his goals for Russia’s economy and how state policy would be shaped to achieve them, Interfax reports.

“Russia,” the president said, “must become an attractive country that people from all over the world will aim for in search of their dreams. In search of the best opportunities for success and self-realization, which Russia can give to everyone ready to heed this call and love Russia as their new or second home.”

“Such are the goals of our modernization – they are realistic and achievable,” Medvedev asserted. He added that favorable conditions for modernization are currently developing in the country’s economy. He also said that state fiscal policy would be shaped with this in mind.

The three-day forum, which began Thursday afternoon, brings together European leaders, representatives from international corporations, economists, and other global policy makers to discuss modernization and development in emerging economies. A range of topics, including energy and security policy, are expected to be covered.

A presidential aid had stated earlier that Medvedev’s speech “will be mainly dedicated to Russia and the way we have changed.”

The Russian president singled out inflation in his opening remarks as one of the primary issues faced by his country’s economy. He also said that the inflation rate has fallen over the course of the year and is now hovering at about 6%.

In his turn, Russian Prime Minister Vladimir Putin pledged that inflation would not rise above 5-7% over the next three years, with the top target for next year set at 6.5%. He stressed that citizen trust in state policy was the key factor for successfully overcoming economic difficulties, and that Russians do indeed trust the ruble and their domestic banking system.

Former Economics Minister and Scientific Director of the Higher School of Economics Yevgeny Yasin said that the figures cited by the prime minister are realistic, but that inflation in Russia must necessarily fall to around 3-4%. In an interview with Ekho Moskvy, he also stipulated that the best time for prices to fall – the crisis period – had already passed.

While Russia has reported a decline in inflation each month since August 2009, some analysts say that the government’s reliance on consumer prices to calculate the rate presents a false reading of actual inflation. “Consumer prices,” says political commentator Sergei Shelin, “only make up a part of all prices. All the remaining prices are growing, and seem to know absolutely no shame.”

A panel entitled “Finance after the Crisis” was held in the same room after Medvedev’s remarks. There, according to the newspaper Vedomosti, influential global financial analysts discussed whether or not the presidents’ goals were achievable. The newspaper reported that of those present at the panel, 61% believed that the Russian financial system faces stagnation over the course of the next 2-5 years. About 5% expect another crisis, and the last third are optimistic that Russia will see a speedy rate of growth.

At another panel later in the day, Russian Finance Minister Alexei Kudrin said that the task of cutting the budget deficit is harder for Russia than other European countries. This, he explained, has to do with the fact that the state treasury is highly dependent on the oil and gas sector. Kudrin reminded his audience that the current cut in Russia’s deficit is happening as a result of high oil prices – not because of the efforts of the government.

The finance minister also said that a rise in the retirement age would be an unavoidable result of the budget deficit, and confirmed plans for substantial increases in taxes on gasoline, alcohol, and tobacco.