Putin: Russia strong enough to face market shocks
MOSCOW (AP) — Prime Minister Vladimir Putin on Thursday courted investors jittery about Russian stocks amid turmoil in global finances, saying that his country is strong enough to withstand market shocks.
Putin, who is set to easily regain the presidency in elections in March, told an investment forum that his government will work to reduce the state role in the economy and encourage foreign investment to help industrial modernization.
He argued that hard currency reserves exceeding $500 billion and a low level of debt will help Russia cope with the impact of the eurozone debt crisis.
"Russia is certainly better prepared than it was in 2008," Putin said. "A strict budget discipline, an increase in the efficiency of spending, and limits on increase of state debt have been and will remain our priorities."
He said Russia expects 4.1 percent economic growth this year and that the annual inflation will be down to 7 percent this year, its lowest level since the 1991 Soviet collapse.
Putin also sought to assuage the audience over the recent dismissal of Russian Finance Minister Alexei Kudrin, whose fiscal hawkishness made him a darling of investors, saying that Kudrin is his personal friend and will remain part of his team.
Kudrin lost his job after telling reporters that he wouldn't work in the Cabinet once, as expected, President Dmitry Medvedev and Putin swap places after the March elections. Putin praised Kudrin as a strong professional, but wouldn't comment on Medvedev's move to sack him.
Putin also defended an increase in Russia's military spending opposed by Kudrin, saying that the nation must replace its aging Soviet-era weapons approaching the end of their service lifetime. He argued that the military modernization will have a spinoff effect, helping modernize the nation's industrial technologies.
Putin's talk at the forum was his first major speech to investors since he announced his intention last month to reclaim the presidency. He served as president in 2000-2008 before shifting into the premier's job due to a term limit. He has remained the nation's No. 1 leader, and his protege Medvedev proposed that Putin run for president.
Putin turns 59 Friday. He is eligible to serve another 12 years, benefiting from the extension of the presidential term from four to six years. If he does it, that will have made him the nation's longest-serving leader since Soviet dictator Josef Stalin.