MOSCOW, June 21 (RIA Novosti) – The Russian government will invest up to 450 billion rubles ($13.7 billion) in infrastructure projects from its sovereign wealth fund together with private capital, President Vladimir Putin said on Friday, in a move that could give a significant kickstart to the faltering Russian economy.
Up to half the money to be invested in the projects will come from the National Welfare Fund, Russia’s $87 billion sovereign wealth fund made up of windfall oil export revenues, he said.
“Key conditions will be an assessment by private business that the projects are viable and effective, and co-financed from their side,” Putin said in an address at Russia’s annual economic forum in St. Petersburg.
The infrastructure projects should eventually return the money invested, Putin said.
“I know that investors’ interest in infrastructure projects is very significant, especially if government is ready to ensure risks are minimized and act as a co-investor,” he added.
“We should not squander this, or trade it for non-existent programs, but direct it toward those projects which change the shape of the country, and open new perspectives for development,” Putin stressed.
His comments echoed remarks he made earlier this week, when he warned the government to invest budget revenues more carefully and refrain from boosting social spending without foundation.
Much of Russia’s crumbling infrastructure was built in the Soviet era and has been identified as a key factor in retarding Russia’s economic development.
Former Finance Minister Alexei Kudrin, who was fired last year by Prime Minister Dmitry Medvedev for criticizing sharply rising defense spending, consistently called for extra spending on infrastructure.
Highly dependent on oil and gas exports which account for about half national budget revenues, Russia’s economic growth slowed to 1.6 percent in the first quarter of this year.
Analysts warn that the slowing economy and falling living standards could prompt more popular protests against Putin’s rule, which began started shortly before his return to the Kremlin for a third term last May.