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Executive Order on long-term state economic policy

May 7, 2012

Vladimir Putin signed Executive Order On Long-Term State Economic Policy.

The Executive Order aims to step up the rate of stable and consistent economic growth, increase people’s real incomes, and make Russia’s economy a technological leader. 

The Government has been instructed to take measures to achieve the following targets:

- create and modernise 25 million highly-productive jobs by 2020;

- increase investment by at least 25 percent of GDP by 2015 and by 27 percent of GDP by 2018;

- achieve a 1.3-fold increase in the share of the high-technology and science-intensive sectors in the GDP relative to the 2011 level by 2018;

- increase labour productivity 1.5-fold relative to the 2011 level by 2018;

- increase Russia’s ranking in the World Bank’s ease of doing business index from 120th place in 2011 to 50th place in 2015 and 20th place in 2018.

With regard to social and economic development strategic planning, the Government has been instructed as follows: 

- approve by December 1, 2012, the basic lines of the Government’s work through to 2018 and the long-term social and economic development forecast through to 2030, in order to achieve the set targets;

- approve a draft federal law on state strategic planning, coordinating strategic management and budget planning measures, and submit it to the State Duma by October 1, 2012;

- approve by December 31, 2012, the key state programmes, including Healthcare Development, Education Development, Russia’s Culture, Social Support for Citizens, Science and Technology Development, and Transport System Development.

Regarding improvement of budget and tax policy and making budget spending and state procurement more effective, the following instructions were issued: 

- draft a federal law setting out the mechanism for using federal budget oil and gas revenues and for forming, using, and managing the funds in the Reserve Fund and the National Welfare Fund; 

- simplify financial accounting and reporting requirements for specific categories of businesses;

- make it compulsory to hold preliminary public discussion of state and municipal procurement orders for goods, work and services worth more than 1 billion rubles; 

- make businesses’ financial activities more transparent, including by preventing tax avoidance through the use of offshore and shell companies.

In the area of privatisation and improving state asset management, the Government has been instructed as follows:

- make changes by November 1, 2012, to the forecast plan (programme) for privatising federal assets and to the main federal asset privatisation areas for 2011–2013 and approve the forecast plan (programme) for privatising federal assets and the main federal asset privatisation areas for 2014–2016, with the aim of completing the state’s exit from non-resource sector companies by 2016, save for companies that are part of natural monopolies and defence industry companies;

- make amendments to laws and regulations by November 1, 2012, to restrict the acquisition of shares and stakes in enterprises by companies in which the state holds more than 50 percent of shares, by state unitary enterprises, and organisations controlled by these companies and enterprises; 

- ensure that companies in which the state holds more than 50 percent of shares draft and implement programmes for shedding non-core business assets by December 1, 2012; 

- complete by March 1, 2013 the performance analysis of consolidated state enterprises, including open joint-stock companies United Aircraft Corporation, United Shipbuilding Corporation, and State Corporation to Facilitate Development, Production and Export of High-Tech Industrial Goods Rostekhnologii, in order to draft proposals for improving their management, coordinating their development strategies with the state development programmes in the relevant sectors, and their becoming market leaders in particular segments of the global aircraft manufacturing, shipbuilding, information and communications, and space technology sectors.

In the area of improving ease of doing business, instructions are the following:

- reduce the time it takes for businesses to complete procedures (and the costs of such procedures) in some areas of state regulation;

- introduce a system for evaluating the performance of heads of federal executive bodies and regional governors;

- train and re-train social sector management personnel, technical specialists and engineers, and also attract to Russia high-qualified foreign specialists;

- establish the institution of ombudsman for entrepreneurs’ rights at the federal and regional levels;

- conduct compulsory public technological and cost audit of all big investment projects involving state participation;

- provide state guarantees for carrying out investment projects on Russian territory, aimed above all at medium-sized businesses in sectors other than extraction and processing of commercial minerals; 

- create a mechanism for foreign businesses’ participation in tenders and auctions for the construction of federal and regional roads;

- make amendments to the laws in order to exclude the possibility of using criminal prosecution as a means of settling commercial disputes;

- ensure respect for the principles of independence and objectivity in passing court decisions;

Instructions regarding economic modernisation and development are the following:

- ensure by July 1, 2013, that state programmes drawn up include measures for developing the national innovation system in accordance with Russia’s Innovation Development Strategy through to 2020, and put in place a technology forecasting system that will cover the processing sector’s future needs and take key production technology development into account;

- approve by January 1, 2013, state programmes, including Industrial Development and Competitiveness, Aircraft-Manufacturing Industry Development, Space Sector Development, Pharmaceuticals and Medical Industry Development, Shipbuilding Development, Electronic and Radio-Electronic Industry Development, and also the state programme for developing agriculture and regulating agricultural markets, and if necessary make adjustments to modernise and develop leading economic sectors;

- draft and present by July 1, 2012, proposals on accelerating social and economic development in Siberia and the Far East, including the development of transport links to remote areas.

The regional authorities have been advised to coordinate their work with the relevant federal bodies in order to carry out the Order.

May 7, 2012