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India, China to get credit from Russia

MOSCOW: Russia will extend $1 billion to the IMF to help fight the world financial crisis, said Prime Minister Vladimir Putin, as he unveiled a anti-crisis programme to support domestic industries and the population.

“It has been decided to transfer $1 billion to the International Monetary Fund to help countries who found themselves in especially difficult situations,” Mr. Putin told the annual congress of the ruling United Russia party, which he chairs, in Moscow on Thursday.

Russia will extend credits to India and China against the purchases of Russian goods and services, he said. This is in line with Moscow’s strategic shift in foreign trade from the West to the East declared earlier this year. “We will pursue aggressive export policies,” Mr. Putin said.

He said Russia’s huge currency reserves would allow it to weather the crisis, support the rouble and control inflation. Russia should see the global crisis as an opportunity to make its economy more competitive and win new positions in the world economy, he said. Financial support will be channelled on a priority basis to the construction sector, agriculture, machine-building and defence industry, he added. Thus, the government will give 50 billion roubles ($1.82 billion) to the defence sector to prevent bankruptcies. Mr. Putin announced a 4-per cent corporate profit tax cut, from the current 24 per cent, in January 2009. This will free 400 billion roubles for businesses. “We will do everything in our power to make sure that… there are no more economic shocks like the ones in 1991 and 1998,” said Mr. Putin, referring to the meltdown after the collapse of the Soviet Union and the financial crisis 10 years ago.

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