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Putin Seeks To Calm Investors' Worries Over Sanctions

Russian President Vladimir Putin told the investment conference that his administration wants "a country that is strong, flourishing, free, and open to the world."

Russian President Vladimir Putin has told potential investors in Moscow that "unwarranted" Western sanctions won't stop the economy from developing.

Addressing the annual "Russia Calling" investment conference in Moscow on October 2, Putin said Russia remains committed to developing an open market economy.

Putin told the gathering that Russia’s "strategic course remains unchanged" and that his administration wants "a country that is strong, flourishing, free, and open to the world."

The United States and European Union have imposed several rounds of economic sanctions against Russia over its role in the Ukraine crisis.

Moscow has responded by ordering a ban on imports of food from the EU and the United States.

The sanctions, coupled with the prosecution by authorities in Moscow of Russian tycoon Vladimir Yevtushenkov, have undermined investor confidence.

Putin on October 2 told Russian and potential foreign investors in Moscow: "Our task is to bring about an industrial breakthrough, to create strong national companies in manufacturing sectors that are able to produce competitive products."

He stressed the importance of developing ties with business partners to the east.

He also said Russia aims to "actively" use national currencies in trade deals with China and other countries -- implying a shift away from U.S. dollar-based trading.

Putin said: "In using national currencies, we see a serious mechanism for curbing risks."

The Russian president also said Moscow does not plan to impose restrictions on cross-border capital and currency movements as a result of the dramatic decline of the value of the ruble.

He also said the state is prepared to support sectors and companies that are being hit by sanctions.

He said that would include helping Russian financial institutions "first and foremost" to raise capital.

Putin said the government would move ahead with plans to privatize Russian energy companies.

He assured investors that he will not intervene in a legal investigation into the privatization of Bashneft -- the oil company in which Yevtushenkov's Sistema investment group bought a controlling stake several years ago.

Putin said he was confident that a recent rise in inflation, linked to Russia's restrictions on Western food imports, would be temporary because of the central bank's policies.

Despite Putin's upbeat prognosis and promises on economic policies, not all speakers at the conference shared the same positive outlook as the Russian president.

Economy Minister Alexei Ulyukayev told the conference that Russia's current 8 percent inflation rate and a GDP growth rate below 1 percent presented a "crass and explosive situation."

Meanwhile, the head of Russia's largest financial institution criticized Moscow's economic policies, warning that Russia could face the kind of economic collapse that led to the disintegration of the former Soviet Union.

Herman Gref, chief executive of state-run Sberbank, told the conference, "We don't have enough competition. Half of our economy is monopolized."

Gref, a former economy minister, warned that people in Russia "cannot make creative products when they don't understand the current economic policies and business climate."

With reporting by Reuters, AFP, TASS, and Interfax

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