
MOSCOW — The government has already reviewed its economic growth forecast for this year several times. It cut the forecast from 6.5 to 5.8 percent first, then raised it later to 5.9 percent. This difference of 0.1 percent was discussed at a government meeting. Even such a small percentage is important for achieving the ambitious task of doubling the country’s GDP by 2010, as decreed by President Putin.
However, the government, despite its aspiration for economic prosperity, wastes whole percentage points of economic growth, Vremya Novostei newspaper reports. Aggressive actions by the authorities against business cost the Russian economy about 2 percent of growth annually, says Yevgeny Yasin, head of the Higher School of Economics.
“The government should not be allowed to interpret laws in its favor,” Yasin stressed. If the authorities did not frighten businessmen but instead guaranteed their property rights, the problem of doubling the GDP would solve itself. In that case, there would be no need to cut taxes and invent complicated schemes to attract investors, the economist thinks.
Yevsevy Gavrilenkov, chief economist at Troika Dialog brokerage, believes Russia has huge growth potential. “We have all the opportunity we need to grow at the same rate as China,” he told the newspaper.
Most Russians support this opinion. An opinion poll by Yuri Levada’s Analytical Center showed that only 5 percent of Russians had no complaints about the government. Fifty percent of respondents think the government will not be able to change things for the better. The main concerns are rising prices and falling personal incomes, caused by low business activity.
The government does take efforts to improve the situation, but its actions are contradictory, Yevsey Gurvich, head of the Economic Expert Group, told Vremya Novostei. Positive signals are rather declarative, while negative signals such as arbitrary actions in the tax sphere and increasing state interference in the oil and gas sector, are absolutely concrete, he says.
Though the government cuts some taxes every year, the total tax burden does not decrease. Moreover, raw materials industries generating the bulk of Russian GDP, face increasing taxes, complains Gavrilenkov. The government might raise the oil export duty to a new high of $179 on October 1.
Yasin thinks this situation will continue for another two or three years, and this is an optimistic scenario, unless the government creates another “YUKOS case.” For his part, Gavrilenkov believes the government should not take active actions, and all the problems will be settled gradually. Gurvich, to the contrary, is convinced that it is now time for the government to act. “It is necessary to continue reforms, firstly reforms of natural monopolies and administrative reforms,” he said.