Russia's Medvedev raps ministers for gloomy forecasts

Russian President Dmitry Medvedev walks to meet with business leaders in Barvikha, outside Moscow May 26, 2009.

BARKVIKHA, Russia (Reuters) - Russian President Dmitry Medvedev on Tuesday warned ministers who give gloomy economic forecasts that they should look for new jobs, a move widely seen as a rebuke to Finance Minister Alexei Kudrin.

The remarks come as Russia goes through the painful process of drafting the budget for 2010 -- in which Kudrin is playing a key role - after being forced to drastically cut spending in 2009 due to a sharp fall in the price of oil.

Kudrin, a finance minister since 2000 despite periodic rumours about resignation, is a regular subject of criticism from ministers, governors and politicians for his hawkish fiscal role in keeping a lid on state spending.

"When my colleagues from the government say that Russia will not come out of the crisis for another 50 years, it is unacceptable. If you think so - go and work somewhere else," Medvedev told a meeting with Russian businessmen.

Kudrin in April said Russia should not wait for "five, 10, 20 or 50 years" for the favourable economic conditions of recent years to return. Former Kremlin chief Vladimir Putin, now prime minister, said the comment showed Kudrin was stressed out.

Kudrin, while in Washington for the G20 finance ministers meeting, said that he was not under stress and that his remarks had been misinterpreted. He said he had meant that Russia may not see a period of windfall oil and gas revenues for another 10, 20 or perhaps 50 years.

Russia's economy is heading into the deepest recession for at least a decade and the Kremlin is worried that wage cuts and job losses could undermine the social stability that Putin prided himself on achieving while Kremlin chief.

Medvedev, who took over as president in May 2008, told businessmen that private firms rather than state companies should become the driving force of Russia's economy.

"Innovation cannot be state-managed," he told 30 owners of mid-sized firms invited to the official residence outside Moscow. "This goal cannot be reached through the creation of state corporations."

Under Putin state corporations took a powerful position in Russia's economy, gaining enormous sway in the energy, manufacturing and commodities sectors.

The businessmen bombarded Medvedev with complaints about poor legislation, red tape and the lack of affordable credit.

"I do not want to make forecasts, but... we have a chance to see reasonable banking rates in the foreseeable future," Medvedev said.