Putin says Russia's economy to suffer from WTO entry

Wed Nov 21, 2012 1:12pm EST
 

By Gleb Bryanski

MOSCOW (Reuters) - Russia's energy-based economy will take a serious blow from membership of the WTO coupled with a global slowdown, President Vladimir Putin warned on Wednesday, singling out the most vulnerable sectors of the $1.9 trillion economy.

Higher unemployment and budget revenue shortfalls were likely to result from moves to cut some import duties to comply with WTO rules, Putin said, making domestically produced goods less attractive to cash-strapped consumers and businesses.

"We should understand that the initial period in WTO will require a serious adjustment of our economy," Putin told his Security Council convened to discuss risks posed to national security by the World Trade Organization membership.

Russia's domestic animal farming, agricultural machinery, medical equipment, automotive, pharmaceutical, textile and food sectors were particularly at risk, he said.

"Because of the negative trends in the global economy, the risks linked to Russia's WTO obligations have grown," he said.

Russia joined the global trade club in August after 18-year negotiations. Putin said entry talks were helped by the global economic crisis which made developed economies more willing to make concessions in order to gain access to new markets.

The president said Russia's so-called mono-cities, where at least 25 percent of the economically active population work at a single enterprise, were particularly threatened by measures resulting from the country's WTO membership.

About 15 percent of the 143 million population live in about 300 mono-cities, a heritage of the Soviet planned economy.   Continued...

 
Russia's President Vladimir Putin chairs a session of the Security Council at the Kremlin in Moscow, November 21, 2012. REUTERS/Mikhail Metzel/Pool