Updated August 6, 2008

As it came out, the Ministry of Economy had already finished the conception of Russia's social and economic development

by 2020

and had introduced it to preliminary discussion.

About this reported Oleg Fomichev, new director of the Ministry department for strategic management and budgeting, on August, 5. It is Mr. Fomichev who is responsible now for preparation of the conception of social and economic development. Earlier Andrey Belousov was responsible for that.

Mr. Belousov resigned his department director post, as he took up the post in the government.

It is known that the document has foremost pass a preliminary discussion during the meeting with the first Vice Prime Minister Igor Shuvalov, and only after this, the conception passes to the government meeting planned on September, 22.

It is reasonable to remind that the Ministry of Economy received the conception for revision in spring current year. As Mr. Fomichev reported, major changes were made to the blocks about innovations and education.

Changes cover the tax section and the foreign economic policy section as well. It is directly related to the new strategy of the foreign economic policy. The updated conception version envisages value added tax (VAT) reduction from 18% to 12% from 2010. On the whole, according to the last version of the document, Russia's development passes in two stages, but not in three, as it has been set earlier. At the first stage that continues by 2012, potential creation and accumulation for the economy growth is planned. At the second, from 2012 to 2020, gradual switch to updated technological basis is expected. Innovative and social-oriented growth is planned after 2020.

However, the M inistry of F

inance head Aleksey Kudrin was unsatisfied with the revised document content.

First, he was perplexed by inconsistency of the Ministry of Economy plans with

the budget.

In other words, the document does not comprise calculations of the budget opportunities. Therefore, Mr. Kudrin insisted on the text revision and approval of the agencies concerned.

As it is reported, currently the Ministry of Finance prepares a financial plan by 2023 by means of which one manages to demonstrate clearly the inconsistency and impossibility of the Ministry of Economy plans implementation concerning budgetary investments in the conception realization. It will be prepared by September, 8.

We will mark that now the new conception of Russia's social and economic development by 2020 is just introduced to preliminary discussion, and its content will be revised dozen times before it will be approved.