MOSCOW, May 22 (RIA Novosti) - Russia's government will focus on reducing inflation and the tax burden, fighting corruption and improving the investment climate, a deputy prime minister said Monday.
Deputy Prime Minister Alexander Zhukov told the lower chamber of parliament that the government had the goal of keeping inflation to less than 5% a year in the next three years. He also said that inflation in Russia would be kept to a maximum of 9% in 2006 as compared with the rate of 10.8% in 2005.
"I think this is one of the main objectives to increase investment in Russia and to improve the investment climate on the whole," he said.
Zhukov said economic development was directly related to investment growth and the improvement of investment climate in the country, but that the current volume of foreign investment in the Russian economy was "extremely low."
"We will continue our course to make the Russian economy more transparent and more liberal, in order to attract maximum foreign investment, primarily in sectors with a high concentration of manufacturing," he said.
The deputy premier said Russia would continue to pursue a prudent and balanced macroeconomic policy in the next few years, maintaining an average economy growth of 6% annually over the next three years.
Zhukov emphasized that the government would make a strong effort aimed to reduce the number of the state's regulatory functions.
"Our goal is to create formalized procedures for bureaucrats that will prevent them from making arbitrary decisions," he said.
The official said a number of draft laws on taxes would soon be adopted that should stimulate investment in manufacturing, scientific research and the development of new raw-materials deposits.
"Our task is to make legislation more transparent, with laws that are directly effective and do not need explanation from the tax authorities," he said.
Zhukov also said the remaining restrictions on capital flow in Russia would be abolished this summer.
"This summer the ruble will become fully convertible in all operations with capital," Zhukov said, adding that the move would boost the investment.
He also said capital inflow in 2005 had exceeded capital outflow for the first time and expressed the hope that the trend would continue in the future.
Finance Minister Alexei Kudrin said May 12 that Russia would lift all restrictions on capital inflow and outflow on July 1.
"We have accumulated the necessary potential to be considered a country with a fully stable currency, whose stability is guaranteed for many years ahead in any circumstances," Kudrin said.
Speaking about the Stabilization Fund, the deputy PM said it would grow to about 2 trillion rubles ($74 bln) by the end of 2006 and the government might invest about 10% of the fund's money in shares of private companies, whereas other investments would be made in state securities.
With high oil prices remaining a major concern for many countries, Zhukov said Russia remained a reliable energy supplier for Europe and intends to increase deliveries in the future, even though the continent is talking about diversifying supplies.
At present, Russia covers 25% of the European Union's natural gas needs, but relations were strained when shortfalls were temporarily registered after energy giant Gazprom cut off supplies of Ukraine in January.
"Our position is that Russia will increase fuel and energy supplies to Europe, and all fears that Russia may be an unreliable partner are groundless," the official said.
Zhukov said Russia was pursuing market-level prices in its trade with all countries, including former Soviet neighbors, and reiterated that the country would honor its commitments in full.
"This will make our economic relations more stable and transparent," he said. "But this does not mean that we may reduce delivery volumes or fail to fulfill our obligations."
He also expressed hope that Russia would soon sign protocols on ending talks on its accession to the World Trade Organization with the two remaining countries in the process, the United States and Australia.
