In this respect, Mr. Fradkov dismissed allegations about authoritarian rule in Russia. “If there are mistakes, it is not quite correct to blame them on authoritarian rule. We do not do this,” the Prime Minister stressed. He said the government does everything it can to make the economy healthier and develop it.

Mr. Fradkov said he was not satisfied with the reforms of the banking sector. The banking reforms should be more effective, he said. “Unfortunately, there are too many shortcomings in the work,” Mr. Fradkov admitted. In his opinion, separate measures, which are not in line with a systematic approach, cause a painful reaction from the market.

In view of this, the Prime Minister called on the Association of Russian Banks, commercial banks and the Central Bank of Russia to take an active part in the reform. For its part, the government is going to take a number of measures to improve the effectiveness of banks and make them an effective investment mechanism.

Mr. Fradkov also spoke about wholesale power generating companies. The government had not yet developed its position on the mechanism to create wholesale generating companies, he said, but the preparation of the decision was underway. Mr. Fradkov stressed that it was important not to hurry and make careful decisions.

On Monday, Deputy Economy Minister Andrey Sharonov told reporters that the Economy Ministry and the Atomic Energy Ministry were going to submit their regulations on wholesale generating companies to the government.

According to the Prime Minister, foreign direct investment in the Russian economy will double in 2004 compared with 2001-2002. The investment would be more than $8bn, he said. However, Mr. Fradkov noted that it was not much for Russia. At the same time, he said the government was concerned that domestic investments were concentrated in the hands of large financial and industrial groups. “Natural monopolies and the export and raw material sector” account for more than 40 percent of fixed investment, according to Mr. Fradkov.

In his opinion, the quality of investment in the Russian economy changed. Earlier, it was mostly “risk capital”, while today, the most conservative foreign investors – large insurance companies and private pension funds – are investing in Russia.