President Dmitry Medvedev has addressed Russia's most important annual international economic forum, announcing plans to abolish the capital-gains tax on long-term direct investment starting next year.
Speaking at the 14th St. Petersburg International Economic Forum, Medvedev also vowed to loosen the state's stranglehold on the economy by introducing more competition and reducing the number of state-controlled enterprises fivefold.
The president said the decisions were timed to favor an "investment boom" in order to get Russia’s oil-and-gas dependent economy on track.
"The creation of favorable conditions for investors is perhaps our most important task," Medvedev said. "We have taken steps in that direction in the past, although we haven't been successful in everything. But today we put this goal at the center of our actions."
Medvedev said he had instructed the government to work on a project to establish an investment fund within a year, in which state owned funds will be accumulated together with private capital. The fund would be responsible for "securing strategic investors for projects and co- financing such projects."
Russia's economy has suffered from the global downturn, with economic output plummeting nearly 8 percent in 2009.
But Medvedev said the budget deficit was under control and will be reduced to 3 percent of the gross domestic product by 2012.
The president said he hopes to use innovation and high-technology to diversify Russia's economy and prepare it for future generations.
Medvedev said Russia was setting a "quite ambitious goal" of increasing the amount of Internet users within the next few years to "the highest possible level, perhaps to 90 percent."
"In general, information technology is one of the key areas for the development of democracy," Medvedev said.
'Enough With The Mentoring'
Medvedev stopped short of addressing corruption, red tape, and the creaky judicial system, which investors point to as the main obstacles to doing business in Russia.
RFE/RL correspondent Danila Galperovich, who is covering the three-day economic forum attended by captains of industry and policymakers from Russia and around the world, said the forum typically features foreigners pressing for rule of law and a crackdown on corruption.
Anatoly Chubais, currently head of the Russian Nanotechnology Corporation and a key architect of the country's economic reforms in the 1990s, told RFE/RL's Russian Service in St. Petersburg that it's time for the West to stop mentoring Russia.
"One of the most typical mistakes committed by Europe -- and the West as a whole -- is the attempt to 'teach' Russia how to do things, which happens from time to time, even at a serious political level," Chubais said. "It's the attempt to teach Russia democracy, to teach it about defending property rights.... I can't imagine anything more destructive."
Kremlin aide Arkady Dvorkovich predicted that "deals worth billions of dollars" will be signed at the forum.
On June 17, Prime Minister Vladimir Putin made headlines by overseeing a major energy deal between America's Chevron and Russia's Rosneft corporations. In the agreement, signed at Putin’s residence outside Moscow, the two sides agreed to jointly invest $1 billion in a Black Sea oil exploration project.
Putin, who was not expected to attend the forum in St. Petersburg, addressed international central bankers who gathered in Moscow for a conference.
Later today, President Medvedev was expected to award the Global Energy Prize, created in 2002 by Russia's Gazprom, Yukos, and Unified Energy Systems with the goal of becoming the equivalent of a Nobel Prize in the field of energy.
The forum ends on June 19 with a session to be addressed by Medvedev and his French counterpart, Nicolas Sarkozy.
The forum is being attended by chief executives and top managers of international groups such as Siemens, Citigroup, DuPont, ConocoPhillips, Deutsche Bank, and GDF Suez.
High-level officials from Europe, the United States, India, and many former Soviet republics as well as the heads of the European Bank for Reconstruction and Development and the Arab League are also listed among the forum's guests.
compiled from RFE/RL and agency reports, with contributions by RFE/RL Russian Service correspondent Danila Galperovich from St. Petersburg