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Medvedev backs case for state ownership

RUSSIAN President Dmitry Medvedev said yesterday an increase in state ownership was inevitable in some sectors of the country's economy hurt by the global downturn, but promised it would be short-lived.

Speaking at a packed investment forum in St Petersburg, Medvedev sought to convince investors that the country's economy has stabilized and that Russia remained a good place for foreign investment.

He suggested that the global economic crisis that has hammered Russia has passed its most acute stage, but warned it was too early "to crack open the champagne."

"Nonetheless, I believe we have avoided the worst case scenario," he said.

The Russian government has long controlled sectors of the economy deemed to be strategic, such as oil, transport and car making. Since the crisis broke last year, the government has bailed out some major conglomerates accepting shares as collateral in exchange for loans. Several banks were also rescued last year.


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