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Thursday, Jun 21, 2012 3:43 PM UTC

Putin says economic reform his top priority

The Russian president confirmed his commitment to reforms in a speech in front of investors

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Topics: Russia,

Putin says economic reform his top priorityRussian President Vladimir Putin attends an economic forum in St. Petersburg, Russia, Thursday, June 21, 2012. (AP Photo/Dmitry Lovetsky)

ST. PETERSBURG, Russia (AP) — Russia’s President Vladimir Putin said Thursday that reforming the economy is his top priority. Business leaders welcomed the commitment, but noted that such pledges need to be backed up by action.

Putin won his third term in office in March amid large-scale protests in Moscow and other cities, fueled by evidence of election fraud in December’s parliamentary vote and fatigue with his 12-year rule.

He stepped down as president in 2008 because of a constitutional limit of two consecutive terms, but remained at the helm as prime minister.

In an address to investors and heads of global corporations, Putin confirmed his commitment to economic reforms that should make Russia a more attractive business destination.

“We have mapped out an entire program of large-scale reform, and it has received broad public support,” he said. “I see its fulfillment as the main goal of my tenure as president.”

Putin admitted that the government has failed to diversify Russia’s economy away from its reliance on crude oil, but pledged to tackle the issue. He said the government will soon be drafting its budgets in a way that Russia’s main expenditures and investment projects will not rely on taxes expected to come in from oil companies enjoying high oil prices.

In a move cheered by businessmen and investors, Putin on Thursday appointed a presidential ombudsman vested with special powers to defend the rights of company owners and directors.

The new ombudsman, Boris Titov, will have powers to represent owners and directors in courts and suspend official rulings which could be viewed as hampering their rights. Titov had previously served as a chairman of the well-respected business lobby Delovaya Rossiya.

Russian authorities have admitted that a poor investment climate is scaring investors away and hope Titov’s appointment will improve the country’s profile and reputation.

Andrew Sommers, president of the American Chamber of Commerce in Russia, told The Associated Press that he sees “a significant chance of success” in that initiative. Titov has a lot of experience lobbying for businesses and the government has thoroughly researched how similar institutions work in other countries, he said.

Sommers admitted that the economic goals Putin has set out are turning into “a long, complicated process”, but said he believes that Putin is “challenging himself and the government to meet those goals.”

Dennis Nally, chairman of PricewaterhouseCoopers, said he was encouraged by the “pro-reform message” but said the

government needs to make good on its promises.

It’s “not just about putting the right policies in place,” he told the AP, “but it’s about making tangible progress, making these policies come to life every day in terms of execution. That’s what the business community has come here to see.”

In his speech, Putin also touched upon protests against his rule, arguing that it’s important to listen to grievances of the opposition. But he indicated that he would not bend to opposition demands.

“A striving for change is a driver of progress, but it gets counter-productive and dangerous when it destroys peace in the society and the state,” he said. “We must be aware of the things in our political system that can and must be improved, and which values and institutions are fundamental and ought to remain unchanged.”

More Nataliya Vasilyeva.

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