MOSCOW, September 27 (RIA Novosti) – Russian Prime Minister Dmitry Medvedev has said that investors have an “irrational fear” of Russia, a country he described as "incomprehensible" and "sometimes unpredictable," in a long opinion piece published Friday in a Russian newspaper.
The article of over 3,000 words was titled “The Time of Simple Solutions Has Passed” and focused on the economic situation, outlining the former president’s strategy to turn around Russia’s slowing economy and calling for greater diversity, efficiency and transparency, though analysts said the article did not contain any new ideas.
“Investors still have an irrational fear of working in incomprehensible, and sometimes unpredictable, Russia,” Medvedev, who was president of Russia from 2008 to 2012, wrote in the article published by Vedomosti newspaper. “And they also have a completely explainable distrust of public institutions. Saddest of all, this includes the legal system and law enforcement bodies.”
The article also included a quote attributed to 19th-century Russian writer Fyodor Dostoyevsky about how capital prefers "internal and external calm."
With investment falling, Russian economic growth this year is expected to slow to its lowest level since the 2009 financial crisis, a development that has prompted calls for structural reforms. Officials are predicting just 1.8 percent growth in 2013 – down from 3.4 percent in 2012 and 4.3 percent in 2011.
“We are to all intents and purposes at a crossroads,” Medvedev wrote. “Russia can either continue its very slow progress close to a zero rate of economic growth. Or it can take a major step forward.”
To achieve economic growth, Medvedev suggested decreasing the presence of the state in the Russian economy, investing in the country’s human resources, cutting Russia’s dependence on income from commodity exports, and supporting small and medium-sized businesses.
He mentioned specific measures including a strict control over tariff rises in coming years, the possible canceling of import duties on scientific equipment, regional tax holidays and a series of new measures implemented through the Central Bank for facilitating the appearance of long-term investment. He also urged large Russian companies, including gas giant Gazprom, oil titan Rosneft and aluminum producer Rusal, to create their own universities.
Medvedev did not propose any concrete measures for rectifying a lack of trust in Russia's legal system, a problem that he famously labeled “legal nihilism” upon assuming the presidency. Nor did he mention corruption, which investors and economists identify as a major brake on the Russian economy and a disincentive for investment.
The opinion piece came out the same day that Medvedev was taking part in an annual investment forum with business leaders and economic officials in the southern Russian city of Sochi, site of next year's Winter Olympic Games.
However, experts told RIA Novosti that there was little new to be found in the prime minister's words.
"There was nothing new for me," said Alexei Devyatov, chief economist at Uralsib Bank. "There were a lot of necessary words, but a lot of the Russian economy’s problems are linked to things he did not mention."
Analysts at one large international bank said in a note to clients Friday that they did not see anything significant in what Medvedev had proposed. “We see the article as … empty of any important new ideas,” the analysts said.