#6 - JRL 7188
Experts Comments on Putin's Goal to Double Russia's GDP Within Decade
MOSCOW. May 16 (Interfax) - To attain the primary economic goal set by President Vladimir Putin in his annual address to the Russian Federal Assembly - to double Russia's GDP within ten years - the Russian economy needs to grow annually by 7.2% to 7.6%, according to experts interviewed by Interfax.
"Despite the fact that emphasis on accelerating economic growth was heard only in the third address, this goal is theoretically achievable - this means that it is necessary to begin tougher and more active modernization and diversification of the economy, which has not been done in the country so far," Executive Director of the Expert Institute Andrei Neshchadin has said.
In the view of deputy head of the Development Center Andrei Klepach, "in order to reach this level, Russia needs to have investment in its economy grow by some 10% annually."
In addition, the structure of the economy must be changed, Klepach said. "We need a second industrial revolution for Russia to develop new areas of growth in addition to oil and metal," he said. Klepach mentioned forestry and engineering among promising economic sectors.
Andrei Kosarev, the head of the macroeconomic analysis division of the Economic Analysis Bureau Foundation, said that Russia "should first of all focus efforts on accelerating investments and changes to the economy's structure through this."
Kosarev said he is confident that the structure of economic growth will soon see intensive changes, "not through as reduction of production in industries dependent on subsurface resources but through growth in other industries."
However, this transition will not be completed by 2010, the expert said. "You cannot expect the structure of the economy to be transformed into a perfectly efficient structure by 2010," he said.
Klepach also noted that doubling Russia's GDP in ten years would require a policy different from that pursued today. "What is needed is institutional decisions at the government level and a credible industrial policy," the expert said.
However, a published draft program of Russia's socioeconomic development in 2003-2005 has left virtually unchanged the outlook of growth for the basic macroeconomic indexes. Under an adjusted outlook, GDP is expected to grow by 4.5% in 2003, by 3.8% to 5% in 2004 and by 4.8% to 5.9% in 2005. In 2008, GDP is expected to grow by 4.5% to 6.3% compared to 2007.
Growth of investments in fixed assets is expected to be 7% in 2003, from 6.6% to 7.6% in 2004 and from 8.2% to 9.2% in 2005.
According to the State Statistics Committee, Russia's GDP grew by 10% in 2000, by 5% in 2001 and by 4.3% in 2002.