#13 - JRL 6525
Rossiiskaya Gazeta
No. 207
October 31, 2002
RUSSIA'S ECONOMIC STRATEGY FOR COMING YEARS
By Yevgeny ARSYUKHIN

On October 30 minister of economic development and trade German Gref made a number of sensational statements, which will determine, to all appearances, Russia's economic strategy in coming years.

German Gref made these statements when speaking with the teaching staff and students of the National Economy Academy under the Russian government. There was an impression that the minister was also summing up the results of his work in the last three years. Late in 1999 the Gref team began to work over a new course of the country's economic development. As the minister recalls, "we gathered together, started to think what to begin with and, failing to find a reasonable answer, began to do everything at once. It is the economy that will judge whether or not we have succeeded in our effort." However, the reform of the country's management was chosen almost the first priority at that time. Today, three years later, this is a priority again.

According to Gref, if Russia wants to ensure a more considerable economic growth, it is necessary to reduce the level of the tax burden. Despite the fact that the government has lately made a number of revolutionary steps on this way, the current level of the tax burden (39 per cent of the GDP) is unjustifiably high. However, to continue the tax reform, it is necessary to accompany it by the administrative reform: "a new structure of state power is needed," the minister stressed.

Further liberalisation of foreign exchange regulation is yet another priority. It is well known that the new wording of the bill "On Foreign Exchange Regulation and Foreign Exchange Control" has already been submitted to the government. However, due to the fact that the document has not been fully developed, the session has been cancelled, which is an unprecedented event. Gref said that by today the document had been approved by the government's financial and economic team, would be submitted again to the Russian Government House in a week or two and introduced within the shortest time possible into the State Duma. The second component of the financial reform is the draft law on the state guarantees of citizens' deposits, which will be discussed along with the draft law on foreign exchange regulation and control.

According to the minister's assessment of the country's medium-term development, economic growth will equal an average of 4 per cent until 2010. In 2003 it will be slightly less and may reach 6 per cent by 2010. At the same time, this figure can hardly be higher. However, Gref promised that no sharp failures, economic crises or defaults could be expected in the medium-term perspective. According to the minister, Russia had developed for the first time a medium-term programme of economic development to help every investor and economic entity to make a judgement about the government's measures at a particular period of time. This gives the hope that Russia will finally create a favourable investment environment.