Medvedev's desire to export more than oil

Medvedev's state of the union

With 20.5 percent of Russia's GDP coming from their oil and gas exports, it is clear that its economy is over reliant on the country's fuel sector. Currently, gas exports generate more than 60 percent of Russia's export revenues and account for 30 percent of all foreign direct investment in the country... however, President Medvedev aims to change that.

Medvedev has said Russia's dependence on commodities such as oil, whilst prices rise, is 'humiliating' and aims to modernise the country's economy. Speaking at his state-of-the-union address, Medvedev slammed the current reliance Russia has on its energy exports.

"We shouldn't look for the guilty only outside the country," he said. "We haven't freed ourselves from the primitive structure of the economy. It's a question of our country's survival in the modern world."

He also criticised those who are complacent of Russia's oil and natural exports which have accounted for about 30 percent of output and 70 percent of export revenue rebounded from the start of the year. "The habit of living off exports is still hindering our innovative development," he said.

Oil price slump

It has been a hard time for the Russian oil and gas sectors recently, despite increased demand, prices have fallen shrinking the economy by 10.9 percent. As such, President Medvedev and Prime Minister Putin have said they are seeking alternative sources of growth and will use the 'slump' to overhaul the country's infrastructure.

"The government must focus on developing medicine, education and energy-saving technologies to reorient the economy on "meeting the needs of the people," Medvedev said. "The government should consider eliminating some of the country's 11 time zones to improve "economic efficiency."

The President's overhaul will benefit the country in the long run, but Russia's economy is still expected to contract by 8.7 percent this year. However a World Bank report has predicted it will grow by 3.2 percent in 2010 "aided by higher oil prices and stronger global demand."

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