The Russian economy looks set to continue growing at about 3.5% to
4% over the next few years. But this is not enough to satisfy
president Vladimir Putin, who said in his 1999 state-of-the-nation
address that Russia needed to catch up with Portugal, western
Europe's poorest nation.
"There has been a good start over the past two years but the pace
needs to quicken from here," says Chris Weafer, head of research at
Troika Dialog. "The economy has to move away from oil and other
commodity dependency. The critical problem is that while the
savings ratio is 33% there has been very little investment (other
than in the oil sector) and FDI flows are dismally small. Two of
the key objectives - attracting foreign capital and diversifying
the economy away from oil - have not been achieved and have little
prospect of a medium-term solution."
Russia needs to grow by...
