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German Gref today said the idea to double the nation's GDP was a reasonable task
Russian Minister of Economic Development and Trade German Gref today said the idea to double the nation's GDP was a reasonable task, but the government had limited opportunities to boost economic growth. "The objective of doubling GDP is correct and we must strive to boost economic growth," Gref told journalists after a government session. "But this must not distract us from making decisions such as the adoption of a medium-term program and conducting reforms, even if they do not provide for the doubling of GDP." The minister said, "The government has limited capabilities to affect economic growth in a medium term perspective." A discussion occurred between Gref and Russian Prime Minister Mikhail Fradkov at the government session as to the timeframe for doubling GDP. "The medium-term program must be oriented toward the doubling of GDP by 2008," Fradkov said. "It is impossible," answered Gref. "Then by 2010," Fradkov said. "That is also unrealistic," Gref returned. In response, Fradkov called on the minister to look for new sources of growth. " Look for ways to ensure growth, promote the development of the meat industry, machine building, create jobs, and clarify the customs and tariff policy and tax policy for medium and small business!" Fradkov fired off. He added that the government had no alternative. The premier told Gref that his ministry that must look for new sources of growth and added that all ministries would help him double GDP. "We will solve this task together," the premier said. "Together means nothing, because every one must be personally responsible," the minister responded. The minister considers that this task can be fulfilled by creating conditions for higher rates of growth in 2008-2010 and subsequent years. Gref stressed that the doubling of GDP was a quantitative objective. "And we must focus on quality," he said. According to him, the principal objective is economic diversification necessary to ensure stable and qualitative growth. "A global improvement of the investment environment" is also important, he said. "The current rates of economic growth are much lower than those necessary to double GDP," the minister said. "I don't think it would be right to maintain extensive economic growth by wasting hydrocarbon resources," Gref stressed. In his 2003 address to the Federal Assembly (Russia's parliament), President Putin set the goal of doubling GDP by 2012, proposing 2002 as a starting level. The president specified that the task could be fulfilled by 2010 if the current rates of economic growth remained the same. To meet the objective the average annual growth of GDP must be 7.2% in the first case and 9% in the second one. Then Gref said that the issue would rest on many factors, particularly the progress of reforms and external factors. "I wouldn't dare to make a forecast for the next seven years, but basically, the task is feasible," the minister said at that time. GDP growth was 4.7% in 2002, 7.3% in 2003, 7.1% in 2004 and is expected to be 5.8% this year, according to the Ministry of Economic Development and Trade's estimates.
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