Russia needs a new economic model as the current one is failing, Economic Development Minister Elvira Nabiullina said on Friday.
"We are raising the question of a new economic growth model, because that of the 2000's, which had its own flywheel of growth, does not respond to the challenges we are facing now. These are challenges of a global competition as well as demographic, technological and ecological ones," Nabiullina told a congress of the ruling United Russia party.
"I believe that the investment climate and investment in infrastructure are key factors of a new model of economic growth. Besides investment in infrastructure, we need investment in knowledge and technologies. In this case a new growth flywheel will start working."
Nabiullina said it was impossible to simply revise the current economic model, because it would not ensure high economic growth. Russian exports increased some eight percent on average in the 2000's, but now they would be growing only two percent, Nabiullina said.
Russia's most important problem was that the bulk of consumer demand was satisfied by imports, she added.
"The non-energy related industry is incapable of producing goods to meet consumer demand," Nabiullina said.
Deputy Economic Minister Andrei Klepach has said Russia, which has an export-oriented economy, could face a trade deficit within two to three years as exports are growing much slower than imports.
