"The economy has got into the export-and-raw-material trap. We are still following the model of an export-and-raw-material country despite some improvements," Prime Minister Mikhail Kasyanov said to State Duma deputies.
Kasyanov added that in 2003 the economic growth factors, the domestic and foreign demand, were practically balanced. At the same time, raw material export grew faster than the economy.
According to the premier, last year 18% of GDP growth was owing to the export and raw material sectors, and 10% to the processing industries.
Hence, last year's economic growth was based on export, the building sector and trade, said Kasyanov.
The prime minister continued that some progress had already been made in the economic diversification towards the forward development of the processing industries. According to him, in 2003 Russian machinery exports grew to reach $11 billion. Enterprises operating in the food industry, household equipment and the services' sector have become competitive, and some of them are already joining foreign markets with their finished products.
The prime minister also said that in the past four years GDP growth and industrial output had increased by nearly 30%, agricultural production by almost 20%, labor efficiency by more than 30% and investment in the fixed capital by 45%. In terms of development rate, Russia was ahead of industrial nations 2- or 3-fold, and in terms of investment growth - 6-fold. "In this context the granting of the investment rating to our country does not look surprising," Kasyanov asserted.
He is convinced that the dropping economic growth rate registered in 2000 has been halted, and the country is moving towards doubling GDP within ten years.