GREF OPTIMISTIC ABOUT SPECIAL ECONOMIC ZONES

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MOSCOW, March 10 (RIA Novosti) - Russia's Economic Development and Trade Minister German Gref promises that special economic zones will produce initial results by 2007.

"We will see completely new outlines on the territory of those 'faceless' green zones by mid-2007," Mr. Gref said, replying to a question by Russia's Prime Minister Mikhail Fradkov.

"We will demonstrate real-life results to skeptics and optimists alike," Mr. Gref added.

Special economic zones will be open to the first 10-15 investors next year, he said.

The establishment of special economic zones is the most liberal instrument for developing depressive territories, Mr. Gref noted.

At the same time, this instrument is not enough for ensuring the development of Eastern Siberia and the Russian Far East, he said.

"I think that Sakhalin Island and the Kamchatka Peninsula should be exempted from all tax payments for a period of 10-15 years," Mr. Gref stressed. In his opinion, the establishment of special economic zones will create well-paid jobs.

In the meantime, Mr. Gref believes that Russia should not set up too many special economic zones at once.

"Let's create ten successful special economic zones in this country," Mr. Gref said, noting that more zones could be created later on.

Those taking part in the discussion, including Regional Development Minister Vladimir Yakovlev, suggested creating a special recreation resort, borderline and port zones on Russian territory. "These zones could pay back more quickly than industrial-production zones," Mr. Yakovlev said. He mentioned as an example Ukraine, which has established a special recreation zone in the Crimea.

However, Mr. Gref said the creation of special economic zones is fraught with budgetary restrictions. He said it would take $100 million to establish one technological-innovation zone. This sum includes $50 million worth of federal-budget appropriations.

This is, nonetheless, an impressivesum, Mr. Gref said, adding that the government must proceed remembering the federal budget's potential, as it charts the number of new special economic zones.

Quite possibly, special economic zones will be created on the basis of enterprises, which are not operating to full capacity, Gref stressed.

Those taking part in the discussion mentioned a number of enterprises whose constructions had been launched during the Soviet era. Nonetheless, such enterprises still remain incomplete. They include nuclear power plants in Bashkortostan and Tatarstan, as well as the KAMAZ truck factory.

Mr. Gref could not say whether it was possible to establish industrial production zones there, noting that each case should be review separately.

At the same time, he believes that industrial production zones should appear in those specific regions, which face social problems and job shortages.

Information Technologies and Communications Minister Leonid Reiman believes that the bill on special economic zones does not promote the development of information technologies.

First of all, the bill facilitates territorial, rather than sectoral development, Mr. Reiman said. However, it does not promote the IT sector's development, he stressed.

According to Reiman, experts from 12 major information technology companies have concluded that the bill does not facilitate the IT sector's development in any way.

Mr. Reiman suggested that the bill also stipulate a sector support system.

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