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Russia's Medvedev raps officials over economy

Published 05/15/2009, 10:11 AM
Updated 05/15/2009, 10:16 AM

* President slams lack of progress on economic modernisation

* Medvedev says this is matter for Kremlin to deal with

* Points to failings in innovation, technology, R&D

By Denis Dyomkin

GORKY, Russia, May 15 (Reuters) - Russian President Dmitry Medvedev scolded senior officials on Friday for failing to reform the economy and said the Kremlin would take charge of efforts to boost it.

Medvedev has complained several times about how officials in Prime Minister Vladimir Putin's government have handled the economic crisis, though he has stopped short of direct criticism of his mentor, who has overall responsibility for the economy.

At a meeting on the modernisation of the economy, Medvedev said: "This is a topic which is supposed to be one of our priorities... but which, unfortunately, is practically not moving at all."

"Everything that has been done until recently, I repeat again, has unfortunately not brought the required results," he said at the presidential residence in Gorky outside Moscow.

"I consider it correct for this question to be dealt with by the president."

Medvedev's cautious criticism of the government has provoked speculation that he could be drifting away from Putin, with whom he has worked for 17 years.

But some diplomats say the Kremlin chief rarely follows up the reprimands with action and that Putin, who stepped down as president last May, remains Russia's real ruler.

Russia has been badly hit by the economic crisis after a decade-long boom and top officials have called for reducing dependence on oil, gas and metals, which make up the bulk of Russian exports.

Kremlin critics say Putin, when president, failed to use the revenues from the world bull market in oil and commodities to rebuild Russia's crumbling Soviet-era infrastructure and fund research.

Medvedev told Economy Minister Elvira Nabiullina and First Deputy Prime Minister Igor Shuvalov that efforts to foster innovation and help companies spend more on research and development had failed.

"Practically no significant changes in the technological levels of our economy are taking place. This is especially obvious in the conditions of a global financial-economic crisis," Medvedev said.

"Technological parks... Russia's venture capital company... special economic zones -- all this basically exists only on paper," he said, adding that labour productivity in Russia was just a quarter of levels in the United States.

Other officials at the meeting included Vladislav Surkov, the Kremlin's first deputy chief of staff, German Gref, the head of Sberbank , and Vladimir Dmitriev, the head of the VEB, Russia's state banking agent. (Writing by Guy Faulconbridge, editing by Mark Trevelyan)

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