APEC warned against protectionism

November 13, 2009 12:00 am

, SINGAPORE, Nov 13 – Russian President Dmitry Medvedev said Friday that Asia-Pacific nations should limit state help for struggling firms or risk creating "hothouse conditions" that promote unsustainable growth.

"This kind of state support should be targeted and only a temporary measure," Medvedev said in an article published by the Singapore Straits Times ahead of this weekend’s Asia-Pacific Economic Cooperation (APEC) summit.

Russia has injected billions of dollars into ailing firms to combat the global economic crisis, and controversially also sharply hiked tariffs on imported cars from Asia to protect its domestic auto industry.

The government is now under pressure to bail out Russia’s biggest carmaker Avtovaz, which employs 100,000 people. Officials say the company is on the verge of bankruptcy due to the economic crisis.

But Medvedev said: "Excessive protectionist barriers that create hothouse conditions for unprofitable businesses run counter to the principles of free competition and ultimately do more harm than good to a country’s development."

The president has repeatedly called for modernisation of the Russian economy and in his state of the nation address Thursday he set out a vision for Russia’s transformation into a democratic, high-tech society.

But the president’s critics say the successor to strongman Vladimir Putin has yet to match his words with actions.

Medvedev said that Russia — which joined APEC in 1998 — wanted to be a "reliable partner" in the 21-member group.

He said Russia wanted its Siberia and Far East regions to be directly involved in regional integration, and expressed hope Russia’s hosting of the 2012 summit in the Pacific city of Vladivostok would be productive.

"We did not join APEC empty-handed. We have much to offer our partners," he said.

Medvedev, at age 44 the youngest leader at this year’s APEC summit, is due to arrive in Singapore early Saturday and is due to meet US President Barack Obama on the meeting’s sidelines.

APEC ministers Thursday expressed backing for Russia’s long-running bid to join the World Trade Organization, although Moscow complains that US foot-dragging has held up its accession.

Foreign and trade ministers also said they "remained concerned over the threat of protectionism to our economic recovery".


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