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    RUSSIAN ECONOMY IS STILL DEPENDENT ON EXTERNAL FACTORS, EXPERTS SAY

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    MOSCOW, APRIL 2, 2004, RIA NOVOSTI - The necessity of recalculating Russia's Gross Domestic Product indices shows that the Russian economy is still very much dependent on external factors, experts say.

    "The frequent recalculation of the Gross Domestic Product proves the Russian economy's sensitivity to external factors," Alexander Shokhin, President of the Higher School of Economics, told RIA Novosti.

    According to Economic Development & Trade Ministry forecasts for next year, the economic growth rate was initially put at 5.8 percent. Later on, the ministry raised the prospective rate at 6.4 percent. Shokhin believes that "unmanageable" factors, such as the OPEC's decision to lower its oil production quotas, should be considered with caution.

    "There may be a lot of such factors and they cannot be predicted," he said. Draft budgets should rely on a conservative scenario, he believes.

    Yevgeny Yasin, Higher School of Economics Vice President for Research, argues that it will be impossible to bring the economic growth rate above 3 percent even if the demand for raw material remains steady. He also pointed out that Russia boasts huge natural resources and that it would be unwise not to use the advantage. Russia should go on exporting oil, natural gas, and metals as long as these commodities are in demand at the world's markets, he said. But according to Yasin, there is an inverse relation between Russia's raw materials processing showing and its competitiveness.

    Yaroslav Kuzminov, Chancellor of the Higher School of Economics, believes that the nation's as yet untapped intellectual potential will ensure sufficient economic growth. To bring that potential into play, it will be necessary to create a mechanism for supporting technological innovations and adapting the economy to them.

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