The Russian government has decided to continue the ‘cash-for-clunkers’ programme in 2011 and to allocate RUB14bn for it, prime minister Vladimir Putin said at a United Russia party conference.
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The government intends “to continue supporting the high-technology sector until demand has fully recovered,” Putin said.
“We often hear people say: why bother with our own production when we can buy everything abroad – planes, ships, cars and even some weapons?” Putin said.
“Yes we can, by selling oil and gas. We will even save money. But I am deeply convinced that the de-industrialisation of Russia is a dead end.”
Putin said allowing its major industry to die would push Russia to “the bottom of the pyramid of the international division of labour” and hurt living standards while increasing the economy’s dependence on the sale of oil and gas.
Under the programme, which started operating in March, owners of cars produced before 2000 can receive bonuses worth RUB50,000 to buy new Russian-made cars in exchange for recycling their old cars.
The government’s support of the automobile sector has produced a positive effect, Putin said.
“AvtoVAZ switched back to profit and has almost restored its output to the pre-crisis level,” he noted. The situation has also significantly improved at other automakers, for example Kamaz and GAZ, he added.
“Why do the problems of the global car industry have to be solved at Russia’s expense? Why do our companies have to give up their market and workers have to be thrown out to the street,” he said, calling on Russian car makers to expand abroad.
The government provided about RUB170bn to the automobile industry in 2009–2010, including RUB75bn to AvtoVAZ, Putin reiterated.
Putin also said that 14,000 km of automobile roads would be built in Russia over five years and all federal roads would be upgraded to modern standards by 2020, thanks to the creation of road funds.
