Thursday, January 29, 2009

Putin Warns in Davos Against Protectionism, Bigger State Role

Russia's prime minister warned on Wednesday against excessive protectionism and a bigger state role in the economy amid the ongoing financial crisis.

Speaking at the opening of the World Economic Forum in the Swiss resort town Davos, Vladimir Putin said "blind faith" in an all-powerful state and its bigger role in the economy was wrong.

"A stronger [state] role during a crisis is a natural response to the failure of market controls, but there is a temptation to maximize state involvement in the economy instead of improving these mechanisms," Putin said.

Putin also said the financial crisis, which has already brought down energy prices, could lead to a global energy shortage.

The current dramatic decline in oil prices could trigger cuts in investment in the sector and production, and as a result a hike in prices later.

"The only way of ensuring real global energy security is to build inter-independence, including through asset swaps, without any discrimination or double standards," the Russian premier said.

He also pledged further tax cuts for energy companies.

"As far as the energy sector is concerned, we have already reduced its tax burden and will do it again in the future," he said.

Thursday, 29 January 2009 - RIA Novosti