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Putin calls for more investment in economy, institution building

Russia's president has identified several mid- and long-term investment priorities in the economic, institutional and social spheres in his annual state of the nation address to parliament Thursday.

Vladimir Putin said power generation is a high priority for the Russian economy, in which 12 trillion rubles ($467.1 billion) will be invested by 2020. „A major structural reform will be implemented - in effect, the country's second comprehensive electrification,” he said. „Power generation in Russia is to grow 66% by 2020.” The president said that new power plants would be built, existing ones modernized and the power grid expanded and diversified. He said nuclear power would remain a priority, and proposed the establishment of a corporation to streamline the nuclear industry. „Thirty nuclear power plants were built in the country during the Soviet period. And we need to build another 26, based on the latest technology,” Putin. „I propose setting up a corporation to integrate nuclear power enterprises operating on domestic and foreign markets.”

Commenting on the president's remarks, Sergei Kiriyenko, director of the Federal Agency for Nuclear Power, said the corporation could be created soon, before the end of the year. He said it would be designed to ensure the effective and efficient operation of the nuclear power sector. Putin said high-tech sectors of industry would receive priority funding, specifically nanotechnology, saying that $5 billion would be invested in the program. „The government should provide the necessary funding to arrange this work in terms of technical equipment, staff and organizational support,” he said.

Putin said last week the state would spare no effort to provide financial support to nanotechnology research programs, but that their results should be put to effective use. „It is an area of activity in which the state is ready to invest on a large scale. The only question is that this work should be well organized and effective, yielding practical results,” he said. He said nanotechnology would lay the groundwork for new weapon systems, both offensive and defensive, adding that nanotechnology is already being used in high-tech sectors of industry, medicine, transport, space research and telecommunications. The president singled out road development among national infrastructure projects, saying an additional 100 billion rubles (about $3.9 billion) should be earmarked for the road construction program. He said the condition of federal roads in Russia is very poor and a major factor in road accidents. „I propose allocating an extra 100 billion rubles for the development of the street and road network, i.e., infrastructure improvement across Russia,” Putin said.

He also proposed investing 300 billion rubles ($11.68 billion) in 2007 to finance state and institutional development mechanisms, including the Development Bank. „With respect to the use of funds accumulated in the Fund of National Heritage, some of them should be invested in state development mechanisms, primarily, the Development Bank, the Investment Fund, and the Russian Venture Company,” Putin said. „I propose investing 300 billion rubles for this purpose as early as this year,” he said. In the social sector, Putin said no less than 250 billion rubles ($9.5 billion) yielded from the sale of bankrupt oil company Yukos assets, higher tax intake and privatization revenues should be spent to tackle the nation's housing problem. Affordable housing is one of Russia's four high-priority national projects, including healthcare, education and agriculture. (