Putin sets the task of doubling Russia's gross domestic product in ten years

Vladimir Putin has set the task of doubling Russia's gross domestic product in ten years.

"Within the decade we should at least double the country's gross domestic product," the Russian president said in his address to the Federal Assembly in the Kremlin on Friday, adding that he considers this objective "realistic".

The doubling of GDP is a "systemic and large-scale task," which will call for in-depth analysis and re-definition of existing approaches to economic policy, the head of state said.

He emphasised that to accomplish this "strategic and vital historical task for the country" it will be necessary to consolidate society and all branches of government.

The country, he said, is quite able to get down to the large-scale construction of a modern and strong economy, and in the ultimate analysis to form a state "competitive in every meaning of the word".

"Another major goal which we must achieve together is to make the rouble fully convertible," the president said. "The country needs a rouble that has a free circulation on international markets, needs a strong and reliable connection with the world economic system".

Putin emphasised that Russia, which has become a full G-8 member, simply must solve this problem.

Achieving this aim will become one of factors of Russia's real integration into the world economy, Putin stressed.

At the same time the head of state acknowledged that "our economic foundation, though markedly stronger, is still unstable and weak". Putin assessed the economic results achieved by Russia in the past few years as "still very and very modest".

"To begin with, one-quarter of Russian citizens still have incomes below the subsistence level," the president stated. "Second, economic growth in the country remains very unsteady. While in 2000 industrial production kept rising throughout the year, in 2002 it did so cumulatively only within six months, while in the last months unemployment started growing".

Third, "rates of economic growth have been slowing down," the president emphasised. "Last year, following a 10-per cent rise in 2000, the economy posted a growth of just over four per cent," Putin said. According to him, slower economic growth rates "inevitably lead to a drop in social development rates." "We should also admit that economic growth in Russia has been primarily due to a favourable economic climate in the world in the past few years," Putin went on to say. "An unprecedented improvement in the conditions of external trade for our economy has given Russia considerable economic advantages and great extra revenue". Part of this revenue was channelled into raising the living standards of citizens, part invested in the Russian economy, and part used to repay the state's foreign debt, which was cut back by one-quarter, the president noted.

Besides, "it is largely with these revenues that we topped up our reserves," Putin added, remarking that the aggregate reserves of the Finance Ministry and the Central Bank "now total a record figure of 61 billion dollars, compared with a mere 11 billion of three years ago".

Commenting on the tax reform, Putin said that it is "becoming regular and continuous". The president also expressed himself in support of outlining a tax system which will exist in Russia, as the president said, "for years and years".

The head of state also emphasised that "the country's credit rating is now highest in Russia's history". A number of Russian companies, for the first time in 90 years, have launched a massive expansion campaign on the world market. In the past three years exports have expanded by one-quarter, with machines, equipment and transport vehicles supplied abroad rising by 70 per cent.

Since 1999, sales of Russian food on overseas markets have increased three-fold. "For the first time in half a century Russia has turned from a grain importer into its exporter," Putin said. Russia, according to him, is also a major exporter of fuel and energy resources in the world.

After noting that "the country's success depends vastly on the successes of Russian entrepreneurs," Putin urged Russian business "to become up-to-date, enterprising, flexible and mobile".

"It should be a worthy continuer of the great traditions of Russian entrepreneurship, and it would not be amiss for it to show more patriotism," the head of state said.