Russian recession

According to Russian Prime Minister Vladimir Putin, the recession in his country is over. In his annual address to parliament, Putin expressed confidence that Russia would exceed the official growth forecast of 3.1 percent in 2010.

"Provisional results for the first quarter fuel optimism....This allows us to say that the recession is over. This does not mean that the crisis is over," Putin said.

Putin concentrated on the merits of responsible fiscal policy, saying that Russia did not want to have to "go with our hands outstretched to somebody, losing our economic and then our political sovereignty."

Although Russia was hard hit by the economic crisis, with gross domestic product (GDP) shrinking by 7.9 percent in 2009, it did not request help from the International Monetary Fund, unlike its neighbour Ukraine.

Healthcare reform

Putin proposed a reform of state finances in order to halve the budget deficit to 3 percent of GDP by 2012, although he did not go into detail.

A planned rise in social security tax will go ahead from next year, and the prime minister said it would be used for a reform of the healthcare system.

"More than 30 percent of the country's medical institutions are in a critical state or require a financial overhaul. Therefore, within the next two years, we will assign about 300 billion roubles (10.3 billion dollars, 7.6 million euros) to put the country's health system in order," Putin said.

In an attempt to boost Russia's standing in the business world, Putin pledged to free Russian businesses from the "kilos of paperwork" that burden operations. He said the government would reform the agencies that regulate business and drop restrictions for start-up companies.

In a World Bank list of attractive business climates, Russia only ranks 120th, due to low transparency and impenetrable bureaucracy.

However, Putin's speech did not mention the strengthening rouble, which some analysts say is the biggest threat to boosting Russia's growth.

cb/Reuters/AFP/AP

Editor: Susan Houlton