Putin: State should reduce role in economy

Russia is on a path toward modernization, privatization and industry diversity, Prime Minister Vladimir Putin told an audience at an investment forum. Putin, normally more cautious on economic reform issues, sounded more like President Dmitry Medvedev Thursday when discussing the modernization of the Russian economy as it seeks to diversify and not focus so much on oil and gas, The Moscow News reported. "Our strategic line is that the state should gradually reduce its direct presence in the economy ... privatize state-owned shares and introduced independent professionals to the boards of directors of state-owned companies," Putin, who likely will return to Russia's presidency next year, told business leaders at the VTB Capital "Russian Calling!" investment forum in Moscow. Medvedev said was ready to become prime minister if Putin wins in March's presidential election. "I think Putin's return [to the presidency] is a good thing -- stability is good for Russian politics and the Russian economy," said Tarek Fawaz, managing partner at Rayan Capital Advisers, based in Switzerland. "If you look at how the market was behaving before the announcement, there was a flight of capital due to uncertainty of what was coming next. In the short term at least, it is a positive development." While the current investment climate is better than before, "there is still a crying need for transparency in the courts, in the government and in the bureaucratic divisions," Clive Bode, a partner at global private equity firm TPG Capital, told The Moscow News. "This process has been started, but it is only a start."