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To: Leslie Tack who wrote (3440)	12/29/1999 4:57:00 PM
From: Jim Burnham	Respond to of 3576

Russia has mountain to climb to fix economy - Putin By Brian Killen MOSCOW, Dec 29 (Reuters) - Russian Prime Minister Vladimir Putin, whose plans for the economy have been a well-kept secret until now, has outlined a grand vision of how to save his country from further humiliating decline. A policy statement published on Tuesday on a new government Internet website (www.pravitelstvo.gov.ru) gave a rare insight into the thinking of the ex-spy, a man who is clear favourite to succeed President Boris Yeltsin when his term ends in June 2000. The statement clearly aimed to dispel the notion that Putin lacked ideas on the economy. It also appeared tailored to appeal to both liberals and leftists ahead of next year's election. But it painted a stark picture of the economy and made no rash promises. In fact, it called for a 10- to 15-year strategy and said Russia had a long way to go to match the likes of Spain and Portugal, never mind the United States. Putin, who took office in August and was named by Yeltsin as his preferred successor, drew many comparisons between Russia and the economies of the United States and China. ``In the 1990s, Russia's gross domestic product has halved. According to the overall size of GDP, we are 10 times smaller than the United States and five times less than China,' he said. He said Russia should aim for fast growth, with improved conditions for investment and new economic directions. He cited experts saying Russia would need at least eight percent annual growth in GDP for 15 years to match Spain or Portugal, or 10 percent growth to equal Britain or France. Russia's 1999 GDP is expected to grow 1.5-2.0 percent. ``Russia is going through one of the most difficult periods of its many centuries of history. For the first time in 200-300 years, it is facing a real danger of being in the second, or even the third echelon of the world's states,' he said. PUTIN AIMS FOR REGULATED MARKET ECONOMY The 47-year-old premier, whose popularity is riding high amid widespread public support for Russia's military campaign in the breakaway Chechnya region, said people wanted to work in conditions of stability and peace. ``They want to use those opportunities and prospects which are opened up by various forms of ownership, entrepreneurial freedom and market relations,' he said. He said the country had to learn from the stop-start reforms that marked the 1990s as the command-administrative Soviet system was chaotically dismantled, output and living standards plummeted and crime and corruption flourished. ``The country needs a long-term nationwide development strategy,' he said. ``The second important lesson of the 1990s is the conclusion that Russia needs to form a comprehensive system of state regulation of the economy and social sphere.' Putin said there was no alternative to a market economy, but the state was obliged to support such sectors as science, education, culture and health. He also ruled out any reforms that would reduce living standards further as poverty was already widespread. FOREIGN INVESTMENT TO BE ENCOURAGED Putin acknowledged the importance of Russia's raw materials sector, saying energy and metals accounted for 15 percent of GDP and more than 70 percent of export revenues. But he said a new direction was needed, putting more emphasis on consumer goods and services and high technology. He also complained about declining domestic investment in manufacturing industry and noted foreign investors were in no hurry to come to Russia. ``Productivity in the real sector is extremely low,' he said, adding that industry was uncompetitive and most Russian machinery and equipment was more than 10 years old. ``I'll tell you frankly, the country's recovery will be long and difficult without foreign capital. We have no time for a slow revival, so we should do everything to attract foreign capital to our country.'