Putin: Russia needs 'economy that harnesses modern technology'

Russian prime minister Vladimir Putin writes in the Financial Times that Russia needs direct investment and innovation to achieve economic stability. Is he sincere?
Written by Andrew Nusca, Contributor

Russia needs to overcome "system-wide corruption" and employ "modern technology" to foster economic competition and innovation, according to prime minister Vladimir Putin.

Writing in the Financial Times, Putin -- who controversially vacated Russia's presidency only to take the prime minister slot -- argues that Russia is at risk of being surpassed by economies in neighboring China and South Korea.

He writes:

To restore our technological leadership we must choose our priorities carefully. We should look at sectors like pharmaceutics, high-tech chemicals, composites and non-metal materials, the aviation industry, information and communication technologies and nanotechnologies.

The problem? Russia, despite its BRIC status, is not seen as a "promising market" for outside, direct investment, thanks to businessmen who flout the law and play dirty. Without a level playing field, companies don't want to engage, Putin writes, and that's a problem affecting the nation's growth.

Putin calls for several reforms in the essay, including deregulation, privatization and the shrinking of the country's biggest conglomerates, such as Gazprom. He also says the nation will soon join the World Trade Organization.

"The modernised economy should grant everybody the possibility of self-fulfilment," Putin writes, "be it an entrepreneur, a public official, an engineer or a skilled worker."

Whether you believe the man or not, it's an interesting situation Russia finds itself in: as India and China to the south and South Korea to the east flex their economic muscle, the continent-spanning nation feels a bit threatened.

For much of its life, Russia has dealt with a dual identity: European and Asian. Reading Putin's essay, it seems his country has felt the negative impacts of European economic integration, and is now looking eastward to ride the coattails of Asian economic growth. Less, it appears, a strategy to participate on the global stage than a defensive maneuver to ensure its role is not overshadowed by emerging economies.

This post was originally published on Smartplanet.com

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