Putin warns against 'economic isolation' as response to crisis

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Moscow, Oct 27 (UNI) Russian Prime Minister Vladimir Putin today warned against the ''tempting'' policies of ''aggressive protectionism'' and restricting the movement of capital during the ongoing financial crisis.

''As the entire world is affected by the financial crisis, simple solutions look tempting,'' Mr Putin said at a cabinet meeting.

''There is often talk of closing off national economies, aggressive protectionism, and restrictions on the movement of capital,'' he added.

''Strategically, isolationism is not our choice,'' Mr Putin said, pointing out he was in favour of ''building Russia further into the global economy.'' He also said Russia's economy relied excessively on the export of hydrocarbons and other raw materials.

Mr Putin stressed that in the past eight years, Russia's foreign trade had grown 120 per cent, but the structure of trade remained 'unsatisfactory.' ''Russia is still over-dependent on the export of hydrocarbons and other raw materials, and therefore, on world prices,'' he said.

However, he noted that hundreds of investment projects had been implemented to strengthen Russia's position in the global market.

''We need to consolidate these trends and use the system of state support for the export oriented sectors of industry as an effective development instrument for domestic producers,'' he said.

He said his words applied, in particular, to such sectors as aircraft and ship building, space, and the nuclear power complex.

Mr Putin's warning come as many economists in Russia say a rouble devaluation similar to the 1998 collapse is very likely, but authorities reject their analysis, saying the country has enough resources to prevent the scenario.

Analysts said last week alone the Central Bank spent some 13 billion dollar from the gold and foreign currency reserves to support the rouble, and the reserves have declined 80 billion dollar since July.


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