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DVORKOVICH: THE MAIN TASK IS TO IMPROVE RUSSIANS' LIFE

MOSCOW, August 24 (RIA Novosti) - Arkady Dvorkovich, head of the expert department of the Russian president, believes that the government's main task is not to double GDP arithmetically, but to improve Russia's economic situation and Russians' living conditions.

"The main task facing us and the government is to tackle the problems hampering economic growth... If we see that people's life has improved, then our efforts can be seen as successful," he said Tuesday at a briefing for reporters.

"If GDP is doubled due to the favorable foreign economic situation, but GDP growth drops to 2% in the next two years, then it will be considered a failure, despite the doubled GDP," he said.

"We should not focus only on the figure, we should not assign priority to the arithmetic index alone," he stressed.

According to the expert, Russia's inflation rate in 2004 will not exceed the planned 10%. "There are some risks, but there is every reason to expect that the set targets will be achieved."

He noted that experts expected economic growth to reach 6.9% in 2004, but judging by the dynamic development of the country, this figure will be higher.

When asked about the possible capital outflow, Mr. Dvorkovich said that no emergency measures were required in this connection. "There is no excessive capital outflow now," he said.

As for foreign investment, the expert said that it increased 12% in the first seven months of this year. Arkady Dvorkovich forecast that investment would grow even faster in autumn. He linked this to the accomplished insurance of bank deposits by the Central Bank.

The Russian government, the expert said, will put forward proposals regarding enterprises subject to privatization. Mr. Dvorkovich noted that the president's recent decree fixing his authority to adopt directly decide on privatization of specific enterprises did not restrict their privatization, but "provides for the president's authority in the privatization sphere and privatization procedures."

In his words, only about 400 enterprises included in the government's privatization plan for 2005 and the president's list of strategic enterprises can be privatized on the decision of the head of state.

Arkady Dvorkovich is hopeful that the Gazprom reform will be considered before the end of the year.

According to him, it will have to be determined whether the state should retain the controlling stock de jure, as it has the control de facto. "The question is how risky it is now that the situation has not been determined de jure. The government is evaluating the risks now," said the expert.

As for the reform of Russia's Unified Energy Systems (RAO UES), Mr. Dvorkovich said, "all of its stages have been outlined and laid down in relevant documents."

He stressed in particular that the work of the president's expert department did not and would not overlap with the Russian government's efforts. The department was set up to help the president fulfill his functions. According to Arkady Dvorkovich, the expert department is responsible for economic expertise of draft laws at all their stages - from going through parliament to the signing.

"The expert department does not work out draft laws. Its activity has nothing to do with the Russian government's work. Our main task is to conduct expert estimates of the documents," said Mr. Dvorkovich.