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In the end of May, there was held a meeting of heads of states participating in the single economic space (SES) Russia, Belorussia, Kazakhstan, and Ukraine. They put forward the major objective the creation of the single customs space and a free trade zone. In order to implement SES in practice, it was decided to work out more than 60 joint legislative acts.

However, even at this first stage of approval of the package of documents the parties had serious disputes.

Thus, the creation of a free trade zone with the Ukrainian participation means that certain changes should be made in the procedures governing VAT collection. As concerns the trade relations between Russian and its CIS partners, this tax is practically everywhere collected basing on the country of destination principle.

Ukraine is a rare exception: the export of energy resources to Ukraine generates almost US $ 700 million in tax revenues due to the Russian budget; Ukraine protests against this situation. Besides, Russia and Belorussia could not resolve their dispute concerning natural gas exports.

The negotiations on the Russias accession to WTO continue. In May, Russian and EU signed the protocol of completion of negotiations concerning market access in the framework of Russias accession to the World Trade Organization. The protocol contains the agreements between the parties relating to the reduction of import tariffs, conditions of access to the Russian market of banking, insurance, and telecommunication services.

The average maximal level of tariffs was set at 7.6 per cent as concerns manufactured goods, 11 per cent for fish products, and 13 per cent for agricultural produce in addition to the tariff quotas on meat and poultry amounting to Euro 600 million a year (15 per cent of the total EU agricultural exports to Russia).

As concerns import duties on cars, the reduction of these prices should be started after the transitional period and they will be reduced only by 2012. The EU recalled its requirement to set a zero rate customs duties on aircraft and respective completing parts. In its turn, Russia agreed to meet the requirements of European aircraft manufacturers and reduce the customs duty on aircraft in 7 years.

The highest rates of customs tariffs will remain as concerns textiles, cloths, footwear, furniture, and toys, the lowest tariffs were set on imported technological equipment necessary for Russian industry.

As concerns the sphere of services, Russia should assume a broad range of obligations including telecommunications, transport, financial services, mail and courier services, trade, ecology, news agencies, and tourism. The obligations include the cross-border rendering of services and commercial institutions.

Besides, the agreement could settle a number of energy problems related to trade, in particular, the issue of the domestic prices on natural gas for industrial consumers. Russia assumed the obligation that the domestic price of natural gas for industrial consumers should include self-cost, profit, and investments necessary for prospecting of new deposits. Russian prices of natural gas for industrial consumers will be gradually increased up to US $ 27 - US $ 28 by 2004, US $ 37 to US $ 42 by 2006, and to US $ 49 US $ 57 by 2010, what is in line with the Russias energy strategy.

There was also reached an agreement concerning the revision of the system of fees currently applied to EU air companies flying via Siberia. It was decided that not later than in 2013 this system should base on actual costs, be transparent and non-discriminatory.

There were also achieved other compromises.

However, the negotiations with other WTO members have not been completed as yet. USA and Canada strongly react to the issues of low Russian domestic natural gas prices and the problem of protection of intellectual property. China insists on liberalization of Russian legislation regulating access of foreign labor force to the Russian labor market and requires a reduction in customs tariffs on imported textiles, footwear, and furniture. Negotiations with Australia progress slowly, as that country is viewed as a prospective trade part ner, however, it requires a reduction of customs duties on goods it does not produce at the moment, but is going to organize respective production and import these goods in Russia.

By this time, Russia has singed WTO accession protocols with Kyrgyzia, New Zealand, Hungary, Czech Republic, Bulgaria, and Israel. This month it is planned to complete the tariff negotiations with Japan and South Korea.

N. Volovik, N. Leonova Organizational changes in the sphere of science The new Ministry of Education intends to create research universities and launch a pilot project in Novosibirsk. The concept of leading higher education establishments elaborated over two last years is not abandoned yet. However, simultaneously there was proposed a number of measures aimed at the integration of science and education. The new Ministry is planning to continue to support innovative activities. Since the beginning of the year, the situation relating to the state of the budget of the Russian Fund of Technological Development engaged in financing of intersectoral applied and innovative projects has aggravated.

The most noticeable event, which took place in the science and technology sphere in the first six months of 2004 was the creation of the new Ministry of Education and Science, which replaced the former Ministry of Education and the section of the Ministry of Industry, Science, and Technologies managing the issues of scientific and technological development. The integration of science and education may be viewed as a step forward in comparison with the former administrative structure, which confirms the intent of the state to more consistently pursue the policy aimed at the integration of these two spheres. This conclusion is confirmed by the fact that the new Ministry will be formed not on the sectoral principle (science and education), but on the problem principle assuming that science and education are inseparably related. It was also decided not single scientific sphere of higher education establishments out of other scientific sectors. Prior to this organization, the sphere of scientific projects carried out by higher education institutions was supervised by the former Ministry of Education, while the Ministry of Industry and Science was responsible for the development of departmental organizations, state scientific centers (SCC), and was oriented towards applied research and innovation activities.

Although different governmental documents stated the necessity to integrate science and education for almost 10 years, and in 1996 there was launched the Presidential program Integration,13 a number of regulatory and legal barriers continues to prevent the real integration. The academic personnel of higher education establishments is formally separated from research and development personnel, while cooperation between higher education institutions and scientific organizations is carried out on the basis of special agreements primarily in the form of part time work. Financing is still based on the departmental principle, and there are no exceptions in the case of cooperation.

The new Ministry has already put forward a number of initiatives indicating a search for new ways of integration of the scientific and educational spheres. These measures include, first, the intent to abandon the procedure of accreditation of scientific organizations (the respective amendments should be made to the federal law On science and the state science and technology policies), as well as removal of restrictions on educational activities of specialists engaged in scientific researches. Second, the Ministry develops the idea of creation of integrated structures, or research universities (the respective amendments should be made to the federal law On higher and postgraduate education). At last, third, the Ministry works out the package of documents concerning the introduction of the status of leading universities. The abolishment of state accreditation means the abolishment of the concept of scientific organization and, therefore, the adjustment of departmental regulations pertaining to science to the concepts set forth in the Civil Code. Besides, after the abolishment of accreditation higher education establishments will have equal rights with scientific institutions and will be able to participate in any tenders (at present they formally have no such a right). Informally, the higher education establishments having developed scientific bases could receive the necessary licenses and take orders: for instance, over the last 18 months the Ministry of Industry and Science issued accreditation certificates to about 20 25 higher education institutions. However, after the accreditation is abolished, higher education establishments will be able to participate in research projects not on the basis of exception, but on lawful grounds. Besides, the abolishment of accreditation creates incentives for the development of innovation activities, since according to the legislation cur At present this program is known as Integration of science and higher education in Russia in 2002 through 2006.

rently in force organizations having the status of scientific institutions should spend not less than 70 per cent of their aggregate expenditures for R & D purposes, therefore the enhancement of innovative activities is tightly constrained.

As concerns research universities and leading higher education institutions, the interpretation of these terms is still somewhat ambiguous, therefore rectors are reluctant with respect to such organizations.

The concept of leading universities has been discussed for more than 2 years. According to the latest plans, this status should be granted to 15 or 20 federal higher education institutions. Besides, 80 to 85 higher education establishments should be granted the status of specialized leading higher education institution, this category should include higher education establishments pursuing certain specific avenues of research14.

According to the package of documents developed by the Ministry, the status of leading university should be granted on the contest basis for a 5 year period and bring additional financing from the state budget, as well as provide certain freedom as concerns the development of standards and methods of education, etc.

Therefore, the introduction of the concept of leading higher education establishment is necessary to provide financial support to elite higher education institutions. However, it potentially deteriorates financing of other higher education establishments.

At the same time, it should be noted that higher education institutions in fact significantly differ in terms of their potentials. According to the RF Ministry of Education, only 38 per cent of accredited higher education establishments have funds for R & D activities, and only 20 per cent of the academic personnel are engaged in research.

The leading universities should differ from other higher education establishments by engagement in effective fundamental and applied research, carry out innovative activities, are integrated in the world educational, cultural, and informational environment. They also should differ in terms of the quality of their academic personnel, the level and scale of education of highly qualified specialists, scientific personnel, and educators. All the characteristics listed above were assessed basing on more than 50 formalized criteria, basing on the results of this assessment there were chosen the leading higher education establishments.

This system provoked significant discontent in the higher education community. Apparently, the apprehension was primarily caused by the fact that the introduction of leading universities would financially affect many higher education establishments, especially new and regional ones. A number of apprehensions is justified. First, the issue of the status: in the case there are leading institutions, other may be considered obsolete and loose part of their entrants. These developments may also result in social and inter-university conflicts. Second, it is doubtful if the criteria were objective enough. The category of the leading higher education establishment is not clearly defined. At many higher education institutions are weak and strong schools and chairs, therefore, many higher education establishments may apply for the status of specialized leading higher education institution. Third, a number of criteria used for the assessment deteriorates the chances of new higher education establishments and the universities situated in previously closed towns (for instance, it concerns the criterion relating to the share of foreign students). Fourth, according to the data presented by the former RF Ministry of Education, it was planned to use for the additional support of leading universities not the financial resources allocated for other higher education institutions, but the additional funds assigned for financing of the education from the excess budget revenues. It is clear that it is only hopes and not approved plans, therefore in the case leading universities are introduced it may result in the redistribution of budget funds. At the same time, many regional universities are not just educational establishments, but centers of social and cultural influence, therefore the lack of financing of such institutions may result in deterioration of the social situation in the respective city (region).

The concept of leading higher education establishment is the unique Russian phenomenon. International practices include the close, but not identical concept of research university. For instance, in the USA there is used the so called Carnegie classification according to which all universities and colleges are classified in 6 categories, the highest of which is research university. Research universities are characterized by a broad range of educational courses, have their postgraduate departments, award not less than 50 Ph. D. a year and receive state financing for research at or above a certain level (not less than US $ 15.5 billion a year)15.

At the same time, the status of research university is granted basing on the universities activities, and not by Dezhina I. Sostoyaniye sfery issledovaniy i razrabotok // Rossiyskaya ekonomika v 2003 godu. Tendentsii i perspektivy. Issue 25: - M.: IET, 2004, p. 276.

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