MOSCOW: Russian businesses are expecting wide-ranging reforms, and are full of suggestions for a new government as Vladimir Putin begins a fourth Kremlin term with promises to revitalise the country’s economy.
While Moscow’s relations with the West remain tense with US sanctions hurting the Russian economy like never before, the new government will be tasked to fulfil the ambitious goals that Mr Putin presented to Parliament in March.
In his last major speech before winning the presidential election by a landslide, Mr Putin set a goal of halving Russia’s “unacceptable” poverty rate in six years by investing in infrastructure, housing and health services.
He also promised a growth rate of 4 per cent against forecasts of 1-2 per cent, as the Russian economy continues to stabilise following a recession that ran until 2016.
But the 65-year-old Russian leader did not explain how he aimed to achieve these goals and solve the predominantly structural problems holding back the country’s growth.
Oleg Kouzmin, an analyst at the Renaissance Capital investment bank, said that business circles hope that “concrete reforms and development plans with real steps” would be outlined after Mr Putin’s inauguration on Monday.
In recent years, the government mainly focused its efforts on fiscal and monetary discipline to avoid dramatic changes to the deficit or debt in a country still traumatised by the 1998 financial crisis.
But favourable conditions for reforms are finally coming together for Mr Putin, who has led Russia for 18 years, in his fourth term.
Mr Kouzmin said that it was hoped that the new government will adopt measures to “address the weakness of the labour market and adverse demographic dynamic” as well as weaknesses in education and health provision.
Investor support and financial development of the Russian regions would also be welcome, he added.
Thanks to control of inflation, a long-term bete noire of the Russian economy, these objectives could be “more achievable than in the past”, according to Renaissance Capital.
