VICE PREMIER OPTIMISTIC ABOUT RUSSIA'S ECONOMIC DEVELOPMENT PROSPECTS
MOSCOW, June 4 (RIA Novosti) - Economic growth in Russia for the five months of 2004 will total no less than 8%, said Vice Premier Alexander Zhukov speaking on Friday at a conference on corporate governance and economic growth in Russia.
This conference was organized by the National Council on Corporate Governance headed by Interros company president Vladimir Potanin, with participation of the World Bank Group and the Organization for Economic Cooperation and Development.
"For the first quarter of 2004, the economy grew by 8% on the whole, and, if the latest data for five months are to be assessed, these rates have not decreased," Zhukov said.
In his words, the general tendency of high rates of economic growth has been preserved despite a certain slowdown in March-April.
"In late April - May the rates of economic growth began to increase, and we hope that this tendency will be preserved until the year's end," he said.
Zhukov also emphasized that in 2003 the quality of economic growth "considerably changed."
Earlier, Russia's economy grew mainly due to the favorable foreign economic situation, and the growth of investments and solvent demand of the population was outlined last year, explained the vice premier.
Real available monetary revenues of the population last year grew almost by 15%, and investments, by 12.5%, he recalled. This is evidence that "we have additional internal factors" for economy growth, Zhukov said.
"The first quarter of 2004 confirms this tendency," added the vice premier.
Reduction of the value added tax (VAT) in 2006 will total no less than 2-3%, Zhukov said.
"In 2006 the government plans to continue the VAT reduction," he said, recalling that from this year's start, the rate of this tax was reduced from 20 to 18%.
"Today the VAT rate is 18%. At the same time, privileges continue to exist - on some goods, this tax is not levied at all, on some, a privileged rate of 10% is paid," Zhukov said.
Before the end of 2004, no less than 300 billion rubles (1 dollar is approx. 29 rubles) will be accumulated in the Stabilization Fund, added the vice premier.
He said that as of today, the volume of the Stabilization Fund exceeds the figures forecasted for this year - 120-140 billion rubles.
(The Stabilization Fund started to be formed since early 2004 due to additional revenues received from high prices for oil. As of February 1, its volume was 106.3 billion rubles, as of May 1, 171.3 billion rubles, as of June 1, 199.047 billion rubles).
About 30% of the population still live beyond poverty level in Russia, said the vice premier. "Our task is to reduce this amount by 50% within three years," he said.
The vice premier said real incomes in Russia are growing fast, but their distribution is unequal.
"The gap between the rich and the poor is still high. This creates a national tension in Russia and is one of the most important problems," he said.
"The strengthening of the ruble this year will continue. The forecasted situation of the ruble strengthening against the currency basket (mainly the dollar and the euro) must not exceed 7%," the vice premier said.
In his words, in the first quarter of this year, the ruble strengthened over 5%.
"And the prices for oil keep rising," he said.
The vice premier is sure that in 2004, the Central Bank and government will be able to fulfill the set tasks on ruble strengthening by no more than 7% and reduce inflation to 10% a year.
"These two key indices can be reached simultaneously," said the vice premier.
Zhukov said in the future inflation is planned to be reduced by 2-3% a year. In his words, in 2005 inflation is planned to be reduced to 8%, in 2006, to 6-7%, in 2007, to 4-6%.
"In his address the president set the task to reduce inflation to 3% a year. By 2008, under certain conditions, we will be able to reach this goal," Zhukov added.
The government hopes the situation in the sphere of paying out wages will improve after the unified social tax rate is reduced, the vice premier said.
"A situation is still the same: many enterprises pay wages with the help of different 'gray' schemes, sometimes just in envelopes, with no taxes paid, including the unified social tax," Zhukov said.
The vice premier emphasized once again that the government hopes for improvement of the situation in this sphere as a result of lowering from next year of the maximal rate of the unified social tax from 35.6% to 26%.
"We hope that this lowering will result in enhancing the transparency of Russian enterprises, improving the tax and fiscal discipline," Zhukov stressed.
Earlier taken measures to reduce taxes gave this effect, he reminded those present. Thus, reduction of the income tax gave an annual increase in levying ability of the tax by 40-50%.
The volume of Russian exports in 2004 may total $150 billion, Zhukov said. "It's a record figure," he recalled. The positive trade balance, in Zhukov's estimate, may total about $60 billion.
The rates of growth of tariffs for gas will decrease, said Alexander Zhukov. They must be lower than the level of inflation, he emphasized.
In Zhukov's words, restriction of tariffs for services of natural monopolies must contribute to the strengthening of investment climate in Russia.
The vice premier noted that the only exception from monopoly companies where the tariffs were not restricted but increased on the contrary was the Russian gas giant Gazprom this year.
"It was allowed to raise tariffs by 20%. This is connected with the fact that the difference between the world and domestic prices for gas is still high and must be lowered, which, by the way, is in line with commitments adopted by us in the process of Russia's accession to the World Trade Organization (WTO)." In his forecast, already in late 2005 Russia may enter the WTO. "For Russia, joining the organization as soon as possible is not the main thing. We will insist that our entry be in line with the interests of Russian industry, Russian companies," said the vice premier.
The latest talks with the EU on this issue, which were a success, are evidence that mutually favorable terms can be found, Zhukov said.
"Our strategic policy is aimed at Russia becoming a full-fledged participant of world trade, and at Russian companies' interests being observed at that," said the vice premier.
He also stressed that the Russian government intends to confirm the strategy of the banking sector development this summer.
"Unfortunately, own funds still remain the main source of investment in Russia," Zhukov said recalling that in 2003, the volume of own funds of credit organizations increased by over 40%.
The government believes that in this sphere there is a reserve for attracting foreign investment, he emphasized.
In this connection, measures to substantially increase investment will be one of the directions of the government work in reforming the banking sphere, Zhukov said.
The vice premier believes that the Russian stock market "is to a large extent underestimated." In this sense, the stock market has very good prospects for development, Zhukov said.
He recalled that capitalization of the Russian stock market grew 14-fold last year. In the beginning of this year, the stock market also showed "sharp growth", after which a certain decline was outlined in April-May, Zhukov said.
"The situation on the stock market, despite short-term fluctuations, remains rather stable on the whole," Zhukov stressed.
The vice premier said the Russian government hopes that the population will support the reform that envisages replacement of privileges by monetary payments.
"It's a very complicated social-sensitive problem. The population is cautious as regards such proposals. But we hope that they will be backed," Zhukov said.
He recalled that today, privileges are received by 30 million Russian residents, who enjoy free travel, get medical assistance, have benefits in regard to payment of housing-communal services.
"They [privileges] are free only on the face of it," the vice premier said, noting that the mechanism of granting these privileges destroys the economy of such branches as transportation, housing-communal services and medicine.
"These decisions ['monetarization' of privileges] will make it possible not only to normalize the situation in the above-mentioned branches of the economy, but will also provide a possibility to substantially increase the revenues of the most sensitive categories of the population," Zhukov believes. |
