"In the mid-term, even maintaining growth rates at the current level will be a very challenging task indeed," Mr Gref said Tuesday as he addressed an international symposium, "Modernization of the Economy and Growing of Institutions."
Russia's current growth is largely due to favorable conditions on the world market, the minister noted. The country needs to use additional sources of growth, making sure that outside capital flows in and its own investment potential is preserved.
The institutional reforms planned by the Russian government will be unpopular and painful, affecting the interests and lifestyles of tens of thousands of people. "The interests of society and state do not always coincide with the interests of large segments of the population," he said, adding that any reform had its opponents.
Mr Gref does not agree with those who argue that Russia needs no reform as long as the favorable situation on the world market ensures its economic growth. In his view, now is the best time to effect reform without causing too much inconvenience as there are still enough resources available.
To be able to maintain steady growth, Russia also needs to restore investor confidence, the minister noted. But no favorable investment climate will be possible to achieve unless the quality of socio-economic institutions is raised, he added.
High-quality institutions and protection of investor rights are the key to creating more favorable conditions in Russia than in competitor countries, pointed out Mr Gref.
