MOSCOW, February 21 (RIA Novosti) – Massive spending on transport infrastructure combined with measures to lure more foreign direct investment and improve the business climate could help boost Russia’s flagging economic growth, First Deputy Prime Minister Igor Shuvalov said on Thursday.
Russia is planning a 500 billion ruble ($17 billion) program to clear bottlenecks from its overburdened road and rail networks to raise growth to the government’s target of 5 percent, Shuvalov said in an interview with The Wall Street Journal.
"We need to move on this urgently," he said, adding the new program would target key bottlenecks such as Moscow's roads and the limited railway links across Siberia to the Pacific Coast.
Russia’s GDP grew only by 3.4 percent last year, the lowest since the deep recession of 2009, with weak demand for Russian exports in Europe and faltering investment.
Shuvalov called for more aggressive moves to sell off state assets to finance transport spending, saying the government could, for example, sell a small stake in Rosneft later this year once it completes its takeover of rival oil firm TNK-BP.
IMF chief for Russia Odd per Brekk said on Wednesday the Russian growth model, which ensured the country’s GDP growth by 5-5.5 percent a year before the global financial and economic crisis, had used up its potential and the country needed to boost investment to spur economic growth.
The government is pinning its hopes on an accelerated development plan prepared by the Economics Ministry for a period until 2030 to raise investment to 25 percent of GDP by 2015 and 27 percent by 2018, increase the share of hi-tech output in GDP and diversify away from raw materials production.
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