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. Last Updated: 07/27/2016

Gref Rues Slow Growth Of High-Tech Industries

Despite the nation’s economic recovery, Economic Development and Trade Minister German Gref said Wednesday that some sectors remain disappointing and warned that the economy could still be undermined by an oil crisis.

Speaking to the Federation Council, the upper chamber of parliament, Gref cited several positive economic indicators: industrial output in the first eight months of the year was 10 percent higher than for the same period in 1999, investments were up more than 17 percent, and the gross domestic product was 7.3 percent higher.

He said real incomes were 8.8 percent higher than for the same period a year ago and inflation for the period was 11.5 percent — a high figure, but far lower than the 84 percent annual inflation that afflicted the country in the economic crisis year of 1998.

"The economic situation is shaping up favorably to continue ongoing reforms," Interfax quoted Gref as saying.

However, Gref also noted that there was little growth in investment in high-technology industries, which he identified as one of the high-priority areas for the government’s economic program in the next four years.

Gref was the lead architect of President Vladimir Putin’s economic program.

Much of the nation’s recovery since the 1998 financial crisis has been driven by high world prices for oil, the country’s top export commodity.

Gref warned legislators that oil prices could fall and cautioned them against drafting budgets that are based on projections of income that are not certain.

Some lawmakers in the lower house of parliament, the State Duma, have complained that the government’s planned 2001 budget is too tightfisted. They say the government is overly cautious in thinking oil prices will average out to $21 per barrel next year, down from about $30 now.

Gref also warned that the current high oil prices could cause a global economic crisis whose consequences Russia could not escape, radio station Ekho Moskvy reported.

In order to boost Russia’s economic progress, Gref said, the country’s unwieldy and inefficient national monopolies such as the railroad system and the electricity grid must be revamped.

There is no intention of breaking up the monopolies, "but they must not continue in their present state," Interfax quoted him as saying.

Gref also said the nation is losing a potential $2 billion to $3 billion a year by not being a member of the World Trade Organization and he called for increased efforts to gain admission. Membership would lower many trade barriers for Russia with the 138 countries that are now in the WTO.