MOSCOW, January 13. /TASS/. Russian Prime Minister Dmitry Medvedev is confident that the Russian economy is stable even in conditions of the Western sanctions.

"Russia’s economy has shown that its market mechanisms are rather stable. Even in conditions when our Western partners act against it by non-market political methods," Medvedev told the Gaidar Economic Forum.

The prime minister said some branches of Russia’s economy have even increased efficiency. "Now the conditions for the country’s re-industrialization have been improved. Russia no more suffers from ‘the Dutch disease’ when the extremely strong national currency makes the goods of its own industry non-competitive."

"Russia’s metals companies have become the leaders for the production costs, one of the lowest in the world. Agriculture and chemical industry, and also machine-building complex show stable growth," he said.

The prime minister also said that Russia will focus on competitive companies and will not support those enterprises that will never become competitive. "Import replacement can lead to growth in prosperity only if the goods and services are competitive at the global level."

Impoverishment of people is most painful consequence of crisis

Fall of living standards, including the middle class, is the most painful consequence of the economic difficulties in the Russian economy, Prime Minister Dmitry Medvedev said Wednesday.

"The most important and most serious thing for us is a decline in people’s income," Medvedev said. According to him, people in Russia "became poorer, the middle class was hurt - and these, perhaps, are the most painful consequences of economic shocks of last year."

Medvedev noted that this happened against the background of the fact that in the last 15 years Russia has managed to achieve significant progress in the fight against poverty.

Moreover, according to him, measures in social sphere - sometimes even at the expense of structural reforms - were a conscious policy of the Russian authorities during these years. "Reforms are always painful; we know it thanks to the 1990s. Therefore, we used excess profit from the oil sector to increase salaries and pensions, built hospitals and kindergartens. Of course, we carried out modernization, but not at a preferable pace that we could reach if we did not have such social expenditures," Medvedev said. Thus, he stated, in these 15 years people's incomes grew faster than the economy. "The growth of prosperity exceeded modernization. And, finally, in the beginning of the 2000s we have reduced poverty by half," Medvedev concluded.

Level of taxation of small and medium businesses to remain unchanged

Level of taxation of small and medium businesses for a uniform tax on imputed income will not change in 2016, Dmitry Medvedev went on to say.

"The terms of taxation for a uniform tax on imputed income for small and medium business in 2016 will remain unchanged," he said Wednesday.

Speaking about the problem of shortage of "long money" in the economy, the Prime Minister noted stimulating activity in the financial market - the market for corporate bonds - as one possible solution. Medvedev said that the government is working on proposals for tax exemption on coupon profit, including personal income tax. "Investors, including many ordinary people, will get a new source of income, a new tool to make money," the Prime Minister said.

Russia to build advanced economic relations with SCO, ASEAN

Moscow will build advanced economic ties with the leading countries of the Shanghai Cooperation Organization (SCO) and the Association of Southeast Asian Nations (ASEAN) and will be guided by the WTO rules, Russian Prime Minister Dmitry Medvedev continued.

Last year, Russia’s non-energy exports grew, Medvedev told the Gaidar Economic Forum, stressing that to support this trend Russia needs to fulfil the potential of the Eurasian Economic Union (Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan).

"We need to agree on the free trade zones with the leading foreign economic contractors on forming the advanced economic partnership as part of the SCO and the ASEAN countries," Medvedev said.

The work in this direction will be based on the universal rules of the World Trade Organization, he said. "Of course, we will not create closed clubs with their own rules of game that do not take into consideration the interests of other participants of the global economy and trade," he said.

The SCO comprises Russia, Kazakhstan, Kyrgyzstan, China, Tajikistan and Uzbekistan. ASEAN unites 10 Southeast Asian countries: Brunei, Vietnam, Indonesia, Cambodia, Laos, Malaysia, Myanmar, Singapore, Thailand and the Philippines.

Politics, geostrategy dictate new rules to global economy

According to Dmitry Medvedev, politics and geostrategy dictate new rules for the global economy today, the last negative example is the pressure on the International Monetary Fund (IMF) on Ukraine’s debt to Russia.

"The situation is exacerbated by the fact that now the terms in economy are dictated by politics and geostrategy, the existing rules are at times ignored or rewritten due to short-term considerations, the way it was done not so long ago by the IMF in regard to Ukraine," Medvedev said.

According to him, this is reflected in economic sanctions against Russia imposed by some countries, "which essentially undermines the work of market institutions, such as the WTO."

The political motives are increasingly often woven into the competition area, for example, in imposing punitive sanctions, Medvedev added. "This tool is used against those who do not execute the decisions of one of the participants in the economic processes, even the biggest one," he said.

He also pointed to "continued globalization, which manifests itself every second, when economic decisions taken in one country immediately affect the situation in other countries without any temporal lags, as it was before."

The premier noted that the world’s economies were facing structural problems - both developing and developed countries, commodity-dependent countries and consumers of energy resources. He cited the oil market as an example.

"At the end of 2015, in the oil market the supply outstripped the demand, but the production continues to grow. The traditional mechanisms to coordinate prices within OPEC do not restore the balance. Even the situation in the Middle East, which enlivened the oil market decades ago, has not affected it in any way now," Medvedev said.