Russian President Dmitry Medvedev on Friday lashed out at the country's giant state corporations for failing to develop new technologies to help modernize the aging industries. Medvedev lashed out at the energy sector - the driver of the Russian economy - for ignoring the importance of innovation. “In the oil sector, things look pretty miserable,” he said in televised remarks. Medvedev quoted a report saying that state-owned public company Rosneft, the owner of the world's largest hydrocarbon resources, spends $11 million (7.64 million euros) annually on research and development, which is 0.015 of its net profit. Russia's second-largest oil company Lukoil, which is privately owned, spends ten times as much, he noted. Rosneft posted a $1.2 billion net profit for the third quarter of 2009, Lukoil posted a $2.1 billion net. Medvedev, who took office in May 2008, has often described technological modernization as a top priority. He spoke sharply to Sergei Chemezov, the head of much criticized sprawling industrial giant Russian Technlogies, which manages 440 companies, mostly defense-related. Chemezov said earlier this year that the companies' debt is roughly 625 billion rubles ($21.2 billion). “Some of the products you have presented are merely replacing imports, they cannot be called innovation,” Medvedev said referring to one of the Russian Technologies' projects involving light-emitting diode technology long used in the West. “We need breakthrough technologies and new solutions.” The Russian government created Russian Technologies in late 2007 with the hope that the corporation would forge a leading role in diversifying the economy. Chemezov said Friday their research panel approved a meager 14 innovative projects since the holding was formed. Putin oversaw the creation of state corporations as part of his efforts to increase the state role in the economy during his eight-year presidency. Medvedev, Putin's longtime protege and anointed successor, has sought to distance himself from the legacy of his mentor but avoided personal criticism of Putin. Medvedev said in his state-of-the-nation address last month that Russia needs to reduce the role of the state. He ordered to streamline the state corporations and eventually disband some of them. Meanwhile, the Russian Central Bank on Friday announced a cut in its main interest rates to a new historic low of 8.75 percent as the bank seeks to stimulate a fragile economic recovery. The 0.25 percentage-point cut, effective from Monday, marked the tenth Russian rate cut in a row since April. At the end of October, the rate had been reduced to below 10.0 percent for the first time ever. The bank said in a statement the cut in the main refinancing rate had been agreed against a background of lessening inflation in Russia, which is running at 9.0 percent this year compared with 13.5 percent in 2008. It said while there were signs of a pick-up of industrial output in Russia there was still no indication of a major improvement in credit activity of Russian banks. “The cut will reduce the impact of factors impeding the recovery and reinforce the trends towards GDP growth,” it said. Russia's oil and export-dependent economy was hit hard by the financial crisis and Finance Minister Alexei Kudrin has said GDP contracted 8.7 percent this year.
