MOSCOW, Oct 2: The World Economic Forum (WEF) opened a two-day forum in Moscow Thursday warning that Russia needed to press ahead with reforms and diversify away from oil and natural gas to maintain heady rates of economic growth.

Russian Deputy Trade and Economic Development Minister Arkady Dvorkovich hailed a historic high reached by the Moscow stock market on Wednesday, which beat a previous all-time high reached on October 6, 1997.

He said Russia did not fear a repeat of the devastating August 1998 financial crash but cautioned that the economy relied far too much on exports of natural resources.

“The potential of growth in commodities is lower than in other sectors. We shouldn’t rely only on the commodities sector,” he told the delegates.

The deputy minister also acknowledged the need to push ahead with structural reforms, such as liberalizing the banking and energy sectors.

A goal set by President Vladimir Putin to double Russia’s gross domestic product (GDP) within the next decade was not realistic but could help to spur the government into action, Dvorkovich said.

“To double GDP is a bad goal, but a very good incentive for the government to enforce reform. It’s a whip for the government,” Dvorkovich told business leaders from Russia and abroad.

Mainly due to high world oil prices, Russian GDP grew by 5 per cent in 2001, 4.3 per cent in 2002 and is forecast to grow by 5.9 per cent this year.

Yevgeny Yasin, a former economy minister, pointed out that oil and gas still accounted for 55 per cent of exports.

“Russia’s economy still depends on oil prices. Oil prices in recent years played an important role in the economy and helped Russia to overcome the financial crisis,” he said.

Yasin in particular called for action to reform the banking system, held back by the dominant role of state-owned Sberbank and the weak capitalization among private banks, which has starved businesses in Russia of credit.

“The banking system has been developing at a very slow pace. It’s a large impediment to economic growth,” he said.

The Organization for Economic Cooperation and Development’s deputy secretary general, Richard Hecklinger, told the forum that Russia needed to improve business standards.—AFP