Medvedev warns against stagnation in Russia

Reuters News
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Posted: Jun 17, 2011 4:53 AM
Medvedev warns against stagnation in Russia

By Alexei Anishchuk

ST PETERSBURG, Russia (Reuters) - President Dmitry Medvedev warned on Friday that Russia could face a period of stagnation and must avoid one-man rule in a speech implying criticism of Prime Minister Vladimir Putin.

Medvedev said the government must revise its "too modest" privatization plans by August 1 and, cautioning against the domination of state companies, said state officials should leave the boards of state companies by the autumn.

He also said Russia must press on with his modernization program, regardless of who is in power, and reduce its reliance on high energy prices -- or face economic problems when the oil price falls.

"The notorious stability could hide another period of stagnation," Medvedev told the St Petersburg International Investment Forum, Russia's answer to "Davos."

"The (privatization) plans are too modest ... The government will have to adjust its program by 1."

His comments are likely to fuel speculation about a split between Medvedev and Putin, who helped usher his protege into the presidency in 2008 when the constitution prevented him seeking a third successive term.

Putin and Medvedev have not said which of them will run in the presidential election due in March. Political analysts say Putin's return to power could herald a period of stagnation as he appears less committed to liberal reforms than Medvedev.

Others also say there is little difference between their policies and that Medvedev has carried out few of the promises he has made, many of them at international conferences such as the St Petersburg forum.

Putin is widely regarded as Russia's paramount leader, despite not being president, and is hugely powerful.

"If everything starts to works on a signal from the Kremlin -- we have all been there and I know from personal experience -- it means the system is unsustainable and must be organized around an individual. This is bad. It means the system should be changed," he sad,

Medvedev said Russia must tackle corruption and must have effective governance.

"We understand that victory over corruption, without effective governance and a good quality financial system, will not overcome our extreme dependence on natural resources and we will not achieve a high quality of life," he said.

"We must not count all the time on high oil prices or on their constant growth," he said. "Yes, modernization is difficult... But we don't have the right to wait."

(Additional reporting by Guy Faulconbridee, Writing by Timothy Heritage)