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Russia must look abroad for brains, techs-FinMin

Published 12/08/2009, 03:29 AM
Updated 12/08/2009, 03:33 AM

MOSCOW, Dec 8 (Reuters) - Russia must look abroad for brains and technology to succeed in the long-standing aim to diversify the economy away from oil, Finance Minister Alexei Kudrin said on Tuesday, slamming the recent rise in protectionism.

The dependence on energy and commodity exports was one of the factors that made Russia more vulnerable to the global economic crisis than its emerging market peers such as Brazil, India or China.

The crisis pushed Russia into its first recession in a decade, prompting the government to step in to save some of its biggest companies, such as carmaker AvtoVAZ , with a range of measures including trade barriers. But some argue that such policies are just engraining the inefficiencies in the domestic industry.

"There has been an increase in protectionist moods, including in Russia," Kudrin told a conference on modernisation organised by state bank VEB.

Russia is one of the most closed countries among emerging markets, and has an average import tariff of 11.5 percent compared to levels of 3-4 percent in the euro zone and the United States, Kudrin said.

"We cannot shut ourselves off," he said. "If we want to create new products we can only do it by bringing in brains and technologies. We must use the best of what exists to the full."

Within Russia, Kudrin reiterated that the recovery path from recession will be a slow one.

"All (companies) are trying to improve production and cut costs, but not everyone will succeed," he said. "Not all will survive this difficult period in the next one-two years." (Reporting by Toni Vorobyova and Dmitry Sergeyev; Editing by Andy Bruce)

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