#5 - JRL 7231
WRAP: Putin plans no changes in Constitution

MOSCOW, June 20 (Prime-Tass) -- There are no plans to make changes to the Russian Constitution and extend the duration of the presidential term from four to five years, Russian President Vladimir Putin told reporters Friday during an annual press conference which lasted almost three hours. Putin looked lively and friendly and on several occasions joked with the journalists. Putin was asked 48 questions, mostly by Russian journalists.

NO NEED TO EXTEND PRESIDENTIAL TERM

Putin said that he does not deem it necessary to change the duration of the presidential term from four to five years.

While conceding that a five-year term “is better than a four-year one” and “two five-year terms” are better than two terms of four years, Putin still affirmed that the duration of a term does not make much difference.

“As for me personally, if I make the decision to run for a second term and am elected, I will not initiate the process of amending the Constitution,” Putin said. “It would be better not to do so” as changing the Constitution is a destabilizing factor, Putin said.

Putin went on to say that he has no plans to join any political party.

“I am not going to join any parties, thank God,” Putin said explaining that in his view the president “should not take sides, should remain neutral, independent and not have any definite political preferences.”

At the moment it is justified for the Russian president not to be a member of any political party, Putin said.

Answering the question as to why he has not put forward his candidacy for the next presidential election Putin said that his decision was prompted purely by the wish to avoid a premature election campaign, which would only prevent real work from being done.

“All the executive branches of power should work hard and systematically instead of making a fuss about their places in the Kremlin or the (Russian) White House,” he said.

The Russian “White House” is the residence of the government.

Most recently, on June 5, Putin said that he believed it was impossible to change the Constitution in order to allow one person to serve three presidential terms.

The next presidential election in Russia is slated for March 2004. Putin is now serving his first term as president.

Putin also said he is convinced that a presidential republic is the only political system Russia can have now.

“Any option other than a presidential republic is unacceptable, and, moreover, dangerous,” Putin said, referring to proposals to make Russia a parliamentary republic.

“I do not think we should doubt the choice made by the whole of the Russian population and deny people the right to elect the head of state directly,” he also said.

TYCOONS' INFLUENCE ON POLITICS SHOULD BE LIMITED

Russian tycoons' influence on Russia’s politics should be limited, Putin said adding that he thought that now the tycoons have been completely distanced from government bodies.

He said that while major businesses play an important role in developing the Russian economy and create jobs for many Russians, the interests of major businesses do not always coincide with the government’s interests, he said.

He mentioned oil majors' resistance to the introduction of the tax on natural resources extraction as an example.

Putin also said he did not like the word “oligarch” being used to characterize tycoons with political clout in Russia.

“The word oligarch refers to someone who has stolen money and is still looting the nation’s wealth using the access he has to power and administration bodies,” Putin said.

“I am doing my best to avoid this happening again, and now I don't see anybody behaving like this," he added.

“Businessmen are always looking for ways to earn more and try to do so in the most effective and cheapest way. The general public, the head of state and the media need to keep an eye on that,” Putin said.

RUSSIAN ECONOMY FACES AMBITIOUS BUT REALISTIC TASKS

The goals for the development of the Russian economy are ambitious but realistic, Putin said commenting on Russia's economic development.

In his address to the nation May 16 he set the government the bold goal of doubling Russia’s gross domestic product (GDP) by 2010.

On Friday admitted that the task to double GDP by 2010 is “complicated” adding that for the goal to become realistic the annual growth should be 7.2%.

To achieve this goal, Russia should focus on developing modern technologies, in particular, information technologies, and the development should be “complex and multi-faceted,” Putin said.

The key factors stimulating economic growth are political and economic stability, he said.

Among other economic growth factors Putin named “the predictable development” of legislation, reducing the tax burden, carrying out tax reforms, stimulating the growth of the processing industry sectors, fighting economic bureaucracy, and denationalizing those sectors of the Russian economy where state ownership is hindering economic growth.

He said that “the government is working hard on that” and will continue to do so.

He said that the value added tax (VAT) rate will be reduced by two percentage points and the 5% sales tax will be canceled, reducing the tax burden.

“We are making the economy more civilized, more understandable, more transparent and predictable,” Putin said, referring to the 4.3% economic growth in 2002.

He said that in January-May GDP grew 7.1% while the year’s target had earlier been set at 4%. The industrial output grew by 6%, he said.

People’s real incomes have grown 14% since the year-start, Putin said.

If economic development continues as it is now proceeding, the task of doubling GDP by 2010 will be reached, Putin said.

GOVT MAY BE PRAISED AFTER BRINGING ABOUT FASTER GDP GROWTH

It will be possible to see the government’s work in a positive light if there are indications that the goal of doubling Russia’s gross domestic product (GDP) in ten years can be attained, Putin said.

“There are things that the government could be criticized for but there are also positive achievements and the government should be supported in its efforts,” Putin said adding that he saw the work of Prime Minister Mikhail Kasyanov as "not bad," and his government's work as "satisfactory."

At the same time Putin said that not all the achievements can be credited to the government.

The favorable situation on the international markets and the high prices for energy resources are by no means the result of the government’s work, Putin said.

GOVT WORKS HARD TO COMBAT ILLEGAL CAPITAL FLIGHT

The government is working hard to combat illegal capital flight, Putin said.

He said that the fact that Russia has become a member of the Financial Action Task Force on Money Laundering is an acknowledgement of the government’s successful efforts in this area. Capital is always looking for favorable economic conditions, so “our task is first of all to create such conditions and not to bemoan capital flight,” Putin said. However, a distinction should be made between legal and illegal capital flow, Putin added.

Legal capital outflow from Russia stood at U.S. $11.2 billion in 2002, according to preliminary estimates, down from $24.8 billion in 1999, he said.

Putin said capital is beginning to come back to Russia “in small, but significant volumes,” and this is “a positive phenomenon.”