MOSCOW (Reuters) -- Russia may avoid a full-scale crisis despite global financial turmoil and can emerge from it with a more effective economy, President Dmitry Medvedev said on October 23.
"We have a chance to avoid banking, forex, or debt crisis and go through today's difficulties without losing the potential we have created," Medvedev said in a video blog posted on his official website, www.kremlin.ru
Russian markets have plunged more than 70 percent since their peak in May amid capital flight and liquidity problems, fuelling fears of a financial crunch spreading into sectors of the wider economy.
The government says Russia, which has accumulated hundreds of billions of dollars in reserves during eight years of economic boom and has healthy fundamentals, can weather the storm.
It has come out with a rescue package topping $200 million in credits for banks and companies and in tax benefits.
Medvedev said the West was already facing the full economic impact of the financial crisis.
"I will tell you sincerely: Russia has not yet got into this difficult situation. It has chances to avoid this. It must avoid this," he said.
Medvedev said the government will focus on supporting the banking sector and six key sectors of the economy: retail, agriculture, construction, machine-building, defence industry, and small businesses.
But he also said the crisis offered a chance to modernise the Russian economy and make it healthier.
"The creation of more competitive companies will inevitably start through the consolidation of assets in different sectors including the banking sector, retail and construction," he said.
"We will be ready to adopt necessary measures and offer additional financial resources for these goals," Medvedev added.
He said the crisis will make financial organizations more effective. "This will make the banking sector more attractive for investors," Medvedev added.
He said that Russian companies will also have to cut expenses and improve production and management structures. "The state will support the creation of effective jobs and offer tax incentives for innovation," he added.