RUSSIA - May 26 - Putin Pledges To Double The Economy.

In an annual state of the nation speech to both houses of parliament, Pres Putin pledges to press ahead with his goal of doubling the size of the economy and improving the lot of its mostly impoverished population. He says: "The success of top-priority tasks depends alone on us...Doubling of the GDP within the decade (by 2010), reducing poverty, growth of people's prosperity and restructuring the army. If we keep annual economic growth at least as it was in the first quarter of this year...we could double per capita GDP not in 10 years, but by 2010". Putin presses the government to work harder to push inflation well below its current levels. It is targeted at 10% this year. He says: "I think the government is able to reach a target of 3% a year". (Investors closely monitored the Kremlin address, Putin's first since his landslide re-election in March, for evidence he will go through with painful reforms. The address is a natural showcase, given an economy boosted by near-record oil prices generating big export revenues. Economic growth was 7.3% in 2003 and remains robust, with officials this week suggesting the final 2004 figure will exceed forecasts of 6.4%. The enormous power concentrated in Putin's hands, reinforced by a strongly pro-Kremlin parliament elected in December, has generated lethargy among many Russians pleased with political stability under Putin but weary of talk of reform that has so far produced few tangible results for the masses. Putin has told ministers they must do more to hoist the living standards of those below the poverty line. Officially one in five of the 145m population, though opposition politicians say the figure is much higher, is below the poverty line. Lilia Ovcharova of the Institute of Social Policy tells the weekly Profil: "In theory, the job of reducing poverty is possible, but then we must forget doubling the GDP by 2010. Half the poor work in sectors with few or stagnant prospects. To cut poverty you need investment in those sectors". Putin embarked on the speech after clinching a EU deal on joining the WTO, including a pledge to raise domestic industrial gas prices. He also promised faster action to back the Kyoto protocol on global warming. Investors were looking for clues to how he would proceed with dismantling huge monopolies like the power industry and Gazprom, the gas utility. His attitude to big business, with oil magnate Mikhail Khodorkovsky soon to go on trial, will also come under fresh scrutiny.