President Medvedev reaffirms commitment to free-market economy, despite global crisis
Fielding questions from the French daily newspaper Le Figaro, which covered several issues, ranging from regional to global topics, including key economic issues, and specifically, whether the Kremlin intends to nationalize some of the nation’s financially distressed companies, Russian President Dmitry Medvedev reiterated his commitment to free-market economy, noting that nationalization of private business institutions is not on the Kremlin’s agenda as all measures being taken to sanitize the national economy are directed against the current global crisis and its negative impacts. “Russia does not need a ‘government-managed economy’ but an effective, free-market economy,” he said, citing excerpts from his State-of-the-Nation’s Address delivered to the Russian Parliament on November 5.
Conceding that Russia has witnessed unprecedented capital flights, the president, however, noted that such massive capital withdrawals do not automatically translate into a reason for nationalizing distressed financial institutions. He further noted that the issue on the agenda is not whether to nationalize distressed private equities or not, but how to preserve the nation’s largest banks, the locomotives of the financial system, which help to foster free-cash circulation in the country. “Equally important is the need to protect citizens’ bank savings, and this is being done, as all citizens’ bank deposits are all practically guaranteed by the state.”
Medvedev, however, did stress the fact that the government will be closely monitoring the situations in the economy, and if necessary, and depending on circumstances, will act swiftly by taking drastic ‘sanitization’ steps, including taking over control over some seriously distressed companies. “Similar measures have been successfully adopted by foreign governments, including the United States, the Great Britain and several others,” he added. “But even if these measures lead to transfers of ownership over private companies, such transfers will be temporary, as the stakes will certainly be offloaded later to private investors when the situations will have normalized.”
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