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    PUTIN DEMANDS 5% ANNUAL ECONOMIC GROWTH

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    MOSCOW, March 19, 2004 (RIA Novosti) - Russia needs an economic breakthrough, Russian President Vladimir Putin said at a joint board of the Finance Ministry and the Economic Development Ministry. He added, "even the most ambitious tasks should be based on accurate calculations and realistic forecasts, and absolutely verified and professionally planned actions." The head of state demanded that the conferees provide an annual economic growth rate of over 5%. This statement of Mr. Putin came after Minister of Economic Development and Trade German Gref said that economic growth rate should make at least 5% annually in the next few years to ensure stable improvement of living standards. "5% is the minimal economic growth conducive to higher investment in the social sphere and increasing citizens' welfare," said Mr. Gref. Mr. Putin replied, "more ambitious tasks need to be set." According to the president, the federal budget should become a fundamental instrument of economic modernization. "Long-term priorities of the country's development should" lie in the basis of the federal budget. "The development problems should not be adjusted to figures - the country's development should be calculated in figures," said Mr. Putin.

    The president deems it necessary to reform the entire budget network. "Only a balanced budget system can guarantee state obligations," added the president. "This is important, including for an efficient social policy - a policy that can become an effective factor of economic growth," noted the head of state.

    Mr. Putin stated the need to diversify the economy and get rid of non-competitive productions. "Obviously, only a diversified economy can remain stable for a long term," said the head of state.

    According to him, an economic environment responsive to innovations and new technologies should be created. "An environment that would secure a decent place for Russia on the global market," stressed Mr. Putin.

    He pointed out the need for a consistent decrease in the inflation rate and the ruble's complete convertibility. According to him, "a relevant macroeconomic policy remains the most important regulating function of the state, but direct administrative participation in the economy should be reduced." The president believes that despite all the measures to de-bureaucratize the economy, such participation is excessive today.

    Mr. Putin thinks that the administrative reform is a means and method for accomplishing the most important economic and social tasks. The head of state pointed that today's board was the first after the large-scale government reorganization was completed. "I hope that the executives' optimization will improve your work and the quality of public services for the population," said the head of state.

    He called for urgent and necessary amendments to legal acts, including the regulatory base of the regional branches of the federal departments.

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