Russian President: Crisis An Opportunity To Remake Economy
Russian President Dmitry Medvedev on Wednesday compared Russia's economic woes to those of the United States – albeit on a smaller scale – and while (presumably) trying to avoid lecturing U.S. policymakers, Medvedev did offer some stark contrasts to the way the U.S. has handled the current economic crisis.
Medvedev appeared on CNBC's "Closing Bell With Maria Bartiromo."
"We are here, the government, to provide aid to them and hopefully understand why the U.S. government wants to try and save their major producers," Medvedev said in response to a question about General Motors, the recipient of a series of U.S. government bailouts. "We are in the same position here in Russia. We want to save our national corporations as well. The scale of the problem is, of course, much less than in the U.S. But again, we are spending billions of dollars here to save them."
But Medvedev didn't seem to have much admiration for the massive, repeated, and almost entirely unsupervised cash infusions the U.S. made a habit of handing out late last year.
"We are in the process of defining how to help our national producers. We are looking at international experience, we are looking at what the U.S. government is doing," he said. "They're buying out shares of the failed producers, including the GM. But what to do with these shares of those failed companies? It's not realistic to have them in – as government property. We need to resell them to a new owner."
"If we talk about major companies on which survival of neighborhoods depends, we need – we are thinking of providing them with very attractive loans, sometimes with a very low percentage – interest rate, as low as a zero percent," he said.
The Russian president also talked frankly about investing in education, social programs, and a diverse, technologically-advanced economy:
Crisis is not only a dramatic event in our lives. But it also a chance that destiny gave us and we need to use this chance. … I already mentioned that I'm not happy with the structure of Russian economy. … It's dependent on raw materials. It neglects innovations to a large extent. I believe that we should have started investing into innovations much earlier.Whether any of Medvedev's comments ought to be interpreted as a rebuke to U.S. policies – or just as cable show political rhetoric – they sound like good advice.But the crisis is now with us and it gives us a chance to change the structure of our economy. And all the extra revenues that we may have selling oil and gas now should be channeled to achieve two goals. One is to maintain our social security programs; old age pensions, benefit payments, medical services, education. ... And secondly, the extra revenues from export of raw materials should be used to radically change the structure of our economy. They should be invested not only into the expansion of our oil producing sector, but to the related areas as well; petrochemistry, etc. And most importantly, into the new technologies, bio technologies, green economy.
