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Kudrin briefs U.S. investors on Russian economic goals
April 27, 2004

Moscow. (Interfax) - Russia aims to make its economy more open and competitive, Finance Minister Alexei Kudrin told members of the U.S.-Russian Business Council Monday evening.

Priorities also include continuing reforms and protecting ownership rights, Kudrin said.

"The Russian economy must be sufficiently liberal, it must remember the lessons of global economic development. We must be competitive in industry, new technology, and create a competitive, open economy," Kudrin said.

Protecting ownership rights and strengthening the judiciary are a must. A bill designed to increase protection for intellectual property has been put before the Duma. "State institutions and the law enforcement bodies must be under public control, and I am certain this will happen in the next few years," Kudrin said.

In the last four years, Russia received market economy status and sustained economic growth. The Russian president has set new goals that include doubling GDP between the period 2000-2010 and achieving a considerable reduction in poverty over the next four years, Kudrin said.

GDP grew 8% and investments 13% in the first quarter of 2004, Kudrin said. Russia this year started a stabilization fund into which budget revenue generated by oil trading above $20 a barrel is channeled. On the one hand, the fund serves to stabilize the strong inflow of currency, and keeps the exchange rate and inflation in check. On the other, it cushions the budget against a possible drop in oil prices.

Lowering the tax burden is yet another Russian economic goal. This fell by 1.6% of GDP in 2003 and is targeted to fall around 1% in 2004 and another 1.5% in 2005. "The resources that this frees up are set aside for investment," Kudrin said.

The government still aims to keep the budget in surplus despite easing the tax burden. "Our budget will remain in surplus in the next few years, we are not going to follow the U.S. administration's example," Kudrin said.