Foreign Minister Yevgeny Primakov said on Thursday that Russia had concentrated too much on financial stabilization and not enough on economic growth, and should take a lesson from the "New Deal" after the Great Depression in the United States.
Speaking to Britain's Royal Institute of International Affairs, Primakov ascribed the recent Russian financial instability to the knock-on effects of Asia's crisis, and of drastic falls in oil and metals prices, as well as on domestic policy errors."We didn't pay enough attention to economic growth because we were focused on macroeconomic financial stability at the request of the IMF," he said.
The solution now was to strengthen the role of the state, not by a return to central planning but by framing tax and privatization policies to promote economic growth.
"There is no question of returning to the past. But we can learn from the United States. During the process of recovery from the Great Depression, Roosevelt took some state measures, tax measures that benefited the development of industry," Primakov said.
"These are areas on which we plan to focus."
He also said Russia should pay more attention to structural reforms and make the oil and gas sector the main focus of its privatization and taxation policy.
"Why did the Asian crisis hit Russia so hard? Because foreign investment was mostly portfolio investment in Russian government bonds," he said.
"When the Asian crisis engulfed such strong countries as Japan and South Korea, many of those who had invested in Russian state bonds started to plug their own (financial) loopholes by taking money from Russia, not from Britain or the United States," he said.