In remarks prepared for delivery at the opening ceremony of the world's biggest high-tech fair, the CeBIT, Naryshkin said Russia was investing heavily in cutting-edge industries to diversify its booming, energy-driven economy.

"Russia is not satisfied with a situation in which the state budget is dependent on the development of prices for oil and gas on the world market, in which the security of the country is also in many ways determined by the external economic situation in which other competitive advantages of the country are not brought to bear," he said.

"The Russian economy is now looking to high-tech sectors, to the information technology and telecommunications industry, to the structures of the economy in the 21st century, to the knowledge economy."

Russia is the guest of honour at this year's CeBIT with 150 private and state technology companies, research and development centres and training facilities represented in Hanover.

Raw materials represent two-thirds of Russian exports, Naryshkin noted, but Moscow is actively trying to shift its weight toward new technology and 21st century services.

"This process is already underway. This process is already showing results," he said.

"We assume that a well thought-out, determined and focused policy of state subsidies is one of the basic requirements for developing an innovative economy."

He said the Russian information technology and telecommunications market had grown at a clip of more than 20 percent per year since 2000, while exports in the industry more than doubled in the last three years to reach 1.8 billion dollars last year.

Investments in the sector reached about 10 billion dollars in 2006, of which four billion dollars came from abroad.

"But who would deny that the investment flow could be much greater?" Naryshkin asked.

A blend of tax breaks for Russian exporters, value-added tax exemption on software developed for foreign investors and tax relief for companies specialising in IT are part of a bid to make the market more competitive.

He added that Russia was committed to ensuring that new technology reached as much of its far-flung population as possible.

"We have introduced measures aimed at eliminating Russia's current problem of the so-called digital divide in the country and making it easier for residents of small cities and villages, of far-away regions and ones that are difficult to access, to use computer technology and all forms of modern communication and information services," he said.

Naryshkin joined German Chancellor Angela Merkel and the chief executive of French-US telecommunications equipment maker Alcatel-Lucent, Patricia Russo, at a CeBIT inauguration ceremony ahead of the opening of the fair Thursday.

Russia was selected as the guest of honour thanks to its coveted software developers and rapidly expanding market, organisers said.

But industry insiders noted that Russia's reputation had been marred by rampant computer hacking, software piracy and a scourge of so-called "phishing" or fraudulent e-mails and spam originating in the country.

More than 6,000 exhibitors from 77 countries have come to the CeBIT, which runs through March 21.

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