Crisis prevented Russia from doubling GDP as promised

Russia could have doubled its gross domestic product in 2009 had the international financial crisis not hit its economy, Prime Minister Vladimir Putin said on Wednesday.

Putin set a goal of doubling GDP within a decade when he first became president in 2000.

Russia was hit harder by the global crisis than any other major emerging economy, with GDP shrinking 8 percent in 2009, far more than its emerging rivals China, India and Brazil.

“The crisis in Russia once again reminded us about our economy’s dependence on raw materials, weak financial markets and basic market institutions and first of all, an insufficient level of competitiveness,” Putin told VIP-Premier magazine in an interview.

“It forced us to update earlier goals given new realities and possibilities. The idea of doubling GDP is among them. It was a strategic goal of a certain historic period of the country’s development. We came close to it just before the crisis.”

In April, Putin told the State Duma lower house that Russia must become one of the world’s top five economies in the next 10 years with GDP per capita amounting to $35,000.

According to the International Monetary Fund, Russia is the world’s sixth largest economy, thanks to its sheer size, but low labor productivity, mostly outdated infastructure and the lack of modern technologies means it is only the 52nd in the world by GDP per capita.

“The crisis has introduced important adjustments to our plans. It is not quantitative economic parameters which are important for Russia now, but qualitative ones, a sustainable economic development, which we could support due to higher industrial efficiency, including labor productivity,” Putin said

Russia’s Strategy-2020, which is now being updated, embraces the country’s development priorities for the next 10 years, Putin said.

“This means building a competitive knowledge and high technology economy, a final transition to an innovative and socially-targeted development,” he said.

Russia should be competitive in all sectors, Putin added.

“We should be proud of our millennium of history, natural resources, cultural heritage, but we must go ahead, to be competitive in everything from technologies to human capital, from industrial production to art,” he said.

Putin has not said whether he will run in the March 2012 presidential polls but he created a new movement to broaden his electoral base in the face of falling popularity for his ruling United Russia party. Russia is also holding parliamentary elections in December.

MOSCOW, June 1 (RIA Novosti)

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