Putin favours ‘Communist Agenda’ on tackling fin crisis

Friday, November 21, 2008 at 4:11 am under World News Putin favours ‘Communist Agenda’ on tackling fin crisis

Russian Prime Minister Vladimir Putin favoured boosting the manufacturing sector and investing huge oil windfall funds for the modernisation of domestic industries to weather the global financial turmoil, thereby virtually hijacking the Communist Party’s economic agenda on November 20 (2008).

The Communist Party of Gennady Zyuganov, highly critical of Putin government’s policy of parking billions of dollars of the stabilisation funds in the US securities and bonds, had been demanding investment in the development of manufacturing sector and modernisation of the industry.

Addressing the 10th Congress of the ruling United Russia, Putin, the party’s Chairman, declared that a “highly competitive real (manufacturing) sector, paves the way for the foundation of the economic security of the nation”. Putin also announced a whole package of incentives and tax cuts, in order to ease the woes of business and availing extra funds for domestic development.

Assuring the nation in his widely televised speech, Putin ruled out recurrence of collapses of 1991 (Soviet disintegration) and 1998 meltdown, claiming Russia’s financial reserves will prevent a spike in inflation and sharp fluctuations in the rouble.

Putin further expressed his concern, stating the global financial crisis is turning into an economic crisis. According to Putin, “It will test every country’s preparedness and their ability to protect their citizens, economies and currencies. Russia is facing that challenge as well.”

Putin compared the crisis to a natural disaster as he referred, “It was impossible to stop but we should foresee such a development of events, and accordingly take measures in advance, so that it passes by painlessly.” Putin kept the hopes alive by adding, that it is still possible for Russia to avoid negative consequences from the crisis.

Citing reports of layoffs, Putin mentioned that unemployment benefits will be raised by 1500 roubles per month on January 1 (2009) to 4900 roubles per month. Putin added, the government would allocate over 50 billion roubles (about USD 2 billion), to support and protect the Defence industry from bankruptcy.

Cuts in profit tax from January 1 (2009), will alone provide the companies with another USD 14.5 billion for their development, in addition to the total USD 180 billion bailout package announced in October (2008) – so as to keep the financial and economic system running smoothly.

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