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Communists urge return to state regulated economy

MOSCOVSKY VILLAGE (Moscow Region), June 18 (RIA Novosti) - Russia's largest opposition party - KPRF (Communist Party of the Russian Federation) - urges return to the state-regulated model of the national economy, KPRF Deputy Chairman Vladimir Kashin said at the plenary meeting of the party's Central Committee where he presented his report on Economic and Social Policy of the KPRF.

In his hour-long speech outlining the party's program for leading the country out of the crisis, Kashin urged resort to the experience of "the USSR, socialist China and Vietnam in development of the national economy". His report, replete with figures and economic indicators, contained sharp criticism of the Government's economic policy. According to him, in terms of efficiency, the private ownership-based model of economy has failed to prove its advantages over the state-run economy in the past 14 years.

"The privatization of the 1990s has in effect destroyed the country's industrial potential, substantially degraded people's welfare and, in terms of major social and economic parameters, has pushed Russia far backwards to the level of a third world country," Kashin said.

Communists see return to the state-regulated model of the national economy as a vital alternative to the current economic policy pursued by the government. Among other things, Kashin spoke in favor of re-nationalization of the country's power industry, strategically significant enterprises, subsurface resources, forests, land, railways and maritime transport.

Communists suggest that the country's gold and currency reserves be limited to the volume of Russia's quarterly imports. Annual state investment in fixed capital assets must by statute account for no less than 1.5 trillion rubles ($1 = 28.58 rubles).

Speaking on the national tax policy, Kashin pointed out that Communists urge a substantial reduction of the consolidated social tax, aiming to subsequently replace the latter with a consumption tax. In addition, they propose to resurrect the progressive tax scale and introduce a special tax on the super-rich with the ceiling rate of 50%. They also recommend reintroduction of the legacy duty and the gift tax for gifts with value exceeding 3 million rubles.

Among other things, Communists stand for charging rent for extraction of mineral resources and urge restoration of the profit tax relief for investors. Kashin proposed that VAT be revoked and replaced with a 10-28% sales tax.

Communists also call for a ban on offshore capital transfer and urge to increase import duties on some products.

The KPRF is against Russia's accession to the WTO on the terms currently offered by the industrialized capitalist countries and believes that negotiations on the issue should be continued until the terms of Russia's membership are acceptable for the national economy.

Speaking on the social policy, Kashin said that the KPRF firmly believed that population must not pay more than 10% of a family's average income for utilities. The party also stands for free education and healthcare systems.

On the whole, Kashin's speech was full of gloomy forecasts for the Russian economy. In his opinion, "our economy is in for a fatal end unless the government radically changes its current economic policy."