GROWING PAINS….

In his interview with the German and Russian press just prior to his departure for Weimar, President Putin put forward another justification for orienting Russian foreign policy towards the West: It would be impossible to ensure economic growth and rising living standards, he declared, “without having provided for a favorable foreign policy atmosphere around Russia.”

Foreign policy considerations aside, however, the Russian head of state was far from happy about the country’s economic performance. Last week, Deputy Prime Minister Aleksei Kudrin announced that Russia’s economy grew by 3 percent in the first quarter of this year and predicted that the growth rate for the year would be 3.8 percent to 4 percent–adding, with an element of hope, that this was a conservative estimate. Kudrin’s numbers did not impress the boss, and Putin this week upbraided the cabinet, saying its new four-year economic plan, which forecasts an annual growth rate of 3.2 percent to 4.6 percent up until 2005, with the rate increasing to 5 percent to 5.5 percent thereafter, was “insufficiently intensive” and that the government should aim for something “more ambitious.”

Putin’s comments reflected the views of his economic adviser, Andrei Illarionov, who has argued that annual growth rates of 3.5 percent to 4.5 percent are insufficient to make up for the decades Russia has spent lagging behind the developed world. Putin shares Illarionov’s lack of illusions about Russia’s place in the world economy, having once noted that even if its gross domestic product were to grow by 8 percent annually, it would take some 15 years to catch up with Portugal and Spain. While Russia’s economy grew by an impressive 9 percent in 2000, the growth rate slowed to an estimated 5 percent last year.