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- the US proposed a general reduction of import tariffs by 55-90% and preservation of 100% ad valorem import tariff peaks for developed countries. The number or commodities designated as sensitive should not exceed 1% of the total number of tariff lines;

- the EU proposed lowering of tariffs by 40-60% and preservation of tariff peaks also at the 100% level. Besides, the EU proposed to work out a register of Specific geographic names of agrifood products.

The eventual formula to be used for harmonizing import tariffs within WTO is not yet established.

Nevertheless, already now some conclusions can be made about the way these new WTO accession rules may affect the Russian agrifood sector. Russias position at negotiations with WTO on agricultural issues aims to raise the bound tariff level as compared with the effective import tariff rates. Lets assume that the reduction of import tariffs along the new WTO rules will be effected according to Swiss formula.

Calculations show that high import tariffs are detrimental for Russia in case of joining WTO under the new Agricultural Agreement: the higher import tariff the less probability to benefit from harmonized tariffs lowering as compared with their linear lowering (Picture 1). For products the tariff on which is below 9% the harmonized approach to tariff lowering is definitely preferable since in this case the percent of reduction will be lower (area A). For products the tariff on which is above 9% this approach is relatively preferable: in case the maximum tariff is set at 50% (a=50) almost all agrifood products benefit from the harmonized formula (area B), in case a=15 only some of them (area C).

3 5 7 9 11 13 15 17 19 21 23 25 27 Initial tariff rate C=0.85 C=0.64 C=0.a=5 a=15 a=Source: own calculations.

Picture 1. Percent reduction of effective tariffs in case of applying linear (a) or Swiss (c) formula Table 2.

The effective tariff rate and the final rate of bound tariff after harmonization Tariff rate, Initial bound- Final bounding rate after tariffs 2001, %* ing rate pro- reduction **, % posals to a=5 a=15 a=WTO, % Meat 19.4 67.5 4.7 12.3 28.Fish 10.0 19.5 4.0 8.5 14.Milk products 15.0 42.5 4.5 11.1 23.Vegetables 13.7 30.9 4.3 10.1 19.Fruits and nuts 6.6 17.7 3.9 8.1 13.Coffee, tea 9.9 17.4 3.9 8.1 12.Cereals 5.0 33.3 4.3 10.3 20.Flour and groats 10.0 21.8 4.1 8.9 15.Oilseeds 5.0 9.8 3.3 5.9 8.Vegetable oil 11.8 21.7 4.1 8.9 15.Sugar and sugar confectionery 29.0 49.5 4.5 11.5 24.Bread, bakery and macaroni products 11.8 24.0 4.1 9.2 16.Processed vegetables and fruits 14.4 27.1 4.2 9.6 17.* weighted averages based on 2000 import statistics..

** calculated using formula t1=at0/(a+t0), where t0 is the initial tariff rate, t1 the final tariff rate, a a coefficient showing the maximum level of final tariff.

Source: own calculations.

Tariff reduction, % One more factor makes a notable raising of bound tariffs detrimental: after their reduction according to harmonized formula the final level of bounding may be even lower than the effective tariffs (Table 2).

So, while under the 1994 GATT Agricultural Agreement the strategy of substantial raising of bound import tariff on agrifood products had sense, the terms of Doha Round Framework Agreement make it non-beneficial for Russia negotiating its accession to WTO.

Serova E.V., Karlova N.A.

Health Care: New Priorities of the State Policy Over the two last months, the political activity of the federal authorities focused on the issues relating to health care. The approved national project Health and discussion of the problem of affordability and quality of medical aid by the Presidium of the State Council should demonstrate the population that the authorities cared about the situation in this sphere and moderate the urgency of a number of most significant problems in this sector.

This year, September and October witnessed significant events in the political life centered on the issues pertaining to health care. The pause in carrying out active measures aimed at the settlement of problems accumulated in this sphere, which lasted more than a year, ended. It should be reminded that the Presidential Address of May 26, 2004, has formulated rather clear objectives of the reform of the public health care. However, the Government postponed the implementation of the respective measures as it concentrated efforts on monetization of social benefits. The discussion of the concept of reforms and necessary draft laws was suspended. There emerged the impression that the federal authorities frightened by growing social tensions resulting from mistakes made in the construction and methods of implementation of federal law No. 122 decided to refrain from any actions, which might give rise to even minimal risk of a negative reaction on the part of the population or professional groups.

Nevertheless, it seems that the political leadership clearly understands the urgency of problems faced by the Russian public health care and the necessity to undertake at least some measures aimed at the moderation of these problems. During meetings with the members of the Government, leaders of the Federal Assembly, and members of the Presidium of the State Council held on September 5, the RF President declared the objectives of four national projects: Health Care, Education, Affordable Housing, and Development of Agriculture. This list shows the top priority of the public health care.

The national project Health, which should be implemented in 2005 through 2007, is of the clearly cost-intensive nature, and its evident most important task was to moderate the urgency of a number of most pressing problems experienced by the sector and demonstrate the population the care of the authorities about this sphere at the expense of an increase in the state funding.

The development of the primary medical aid and provision of high-tech medical aid to the population were set as the priorities of the program. In the framework of the first set of measures there was envisaged the switching to new forms of remuneration of labor of general practitioners, district therapists, and pediatricians (the average rise in monthly salaries should be Rub. 10 thousand), medical attendants (the average rise in monthly salaries should be Rub. 5 thousand), extended training of such doctors, provision of municipal medical organizations with diagnostic equipment, provision of emergency stations with communication equipment and vehicles, procurement of hepatitis B, rubella, poliomyelitis, and flu vaccines, immunization of the population (37 million people a year), prophylaxis and treatment of AIDS, hepatitis B and C patients, prophylactic medical examination of different groups of the population. In the framework of the second set of measures there is envisaged the construction of 15 new federal medical centers and increase in the number of patients provided with so called high-tech medical aid by federal medical organizations from 60 thousand in 2004 to 250 thousand in 2008.

The project envisaged that the federal budget should provide Rub 58.1 billion in 2006 and Rub. 87.billion in 2007. The State Duma earmarked for the implementation of this national project Rub. 62.billion in the budget for year 2006, since the expenditures for the rise in remuneration of labor of paramedics and medical attendants of paramedic and obstetric stations at the district level, as well as doctors, medical attendants, and paramedics of emergency service. As a result, the expenditures for project Health in 2006 should make 46 per cent of the total amount of Rub. 135.5 billion earmarked for the implementation of all four projects.

It is reasonable that primary and highly specialized medical aid have been set as the priorities of project Health. In the system of health care, the primary medical aid functionally plays the central role in the prevention of negative trends in public health, morbidity caused by non-infectious and infectious diseases, as well as ensuring of improvement in efficiency of functioning of the whole system of medical aid. At the same time, it should be noted that the level of remuneration of labor of employees and material provision of the primary medical aid is extremely low in comparison with other levels of the system. Therefore, the stress on the development of primary medical aid is justified.

The situation concerning the affordability of high-tech medical aid is always very difficult. According to the available estimates, the amount of such aid provided at the expense of financial reserves of the federal budget, i.e. formally free for patients makes 10 per cent of real needs. A more than fourfold growth in the amount of this aid will no doubt increase the real affordability of this aid for patients.

It is important to note that prior to the approval of this project, in the course of discussion about the increase in expenditures for health care the RF Ministry of Social Development primarily focused on the proposals relating to the construction of new federal medical centers, which could help to attract additional revenues to the sector at the expense of provision of paid medical services competitive on the world market and attraction of patients from abroad. The approved national project did not clearly set this problem and set other priorities, what no doubt manifests positive shifts in the policy, which the Ministry should pursue.

Nevertheless, it is envisaged to earmark Rub. 32 billion for construction of 15 medical centers. On the whole, the structure of the planned expenditures for the implementation of the project in through 2007 is as follows: switching to new forms of remuneration of labor 21 per cent, procurement of medicines 14 per cent, procurement of equipment 26 per cent, capital construction and equipment of the centers 22 per cent, payment for provision of high-tech medical aid 11 per cent, other measures 6 per cent. Therefore, 73 per cent of expenditures for the project will be related to the centralized purchases of medicines, equipment, services, and works.

High corruption risks of such expenditures are evident. In order to ensure control over the implementation of national projects, the RF President by his decree of October 21 created the Council for implementation of higher priority national projects. At present it is difficult to guess to what extent the activities of this Council may decrease the said risks, but the very fact of its creation is evidence that the top political leadership is concerned not only about the propagandistic effect of the decision taken in the framework of this project, but also the results of their implementation.

Besides the increase in the funding of health care, project Health also envisages certain measures aimed at the enhancement of the efficiency of the sector. The transition to new forms of remuneration of labor of doctors engaged in provision of primary medical aid does not mean that salaries should be increased automatically, but is aimed at the introduction of a system of remuneration incentives, which would link the amounts of salaries with the results. It is envisaged that the funding of federal medical organizations providing high-tech medical aid should change: there should be effected the switching from the budget-based financing to the financing based on state contracts. There should be also elaborated and implemented the system of waiting lists, what should make possible for patients from regions to get the medical aid they need at federal clinics in a more transparent and fair way.

Unfortunately, these are all institutional innovations envisaged by the project. Meanwhile, the problems faced by the Russian health care include not only insufficient resources for improvement of affordability and quality of medical aid. The key problems it encounters are the replacement of state financing with private funding formally maintaining the previous guarantees, significant inequality as concerns availability of medical aid, low efficiency of medical aid and lack of incentives to increase this efficiency. The settlement of these problems requires a reform of the system of state guarantees of provision of medical aid, the system of mandatory medical insurance, and restructuring of the system of the public health service.

On October 11, the State Council of the Russian Federation met in Penza and discussed the measures aimed at the improvement of affordability and quality of medical aid. The report prepared by the working group created by the State Council clearly formulated the necessity to resolve these problems, in particular, there was stressed the necessity to more rapidly prepare and approve the federal laws On health care in the Russian Federation, On state guarantees of medical aid, On mandatory medical insurance, On insurance of professional responsibilities of medical workers, and On autonomous institutions. In his speech at the meeting, the RF President has extremely clearly stressed that there is no time for further delays as concerns the adoption of the basic laws of health care, and that both the Government and the Federal Assembly should approve the respective laws as soon as possible.

However, in spite of the fact that the President has repeatedly spoken about the necessity of reforms in this sphere and adoption of new laws, there were observed no real changes in the sector. It should be also noted that adoption of new laws is an insufficient measure. It is necessary to make systemic and consistent efforts aimed at the transformation of the health care system at all levels of authorities and the society. There is little hope that the necessary transformations would be launched after yet another speech of the RF President.

S. V. Shishkin Issues Considered at the Sessions of the RF Government of October 6 and At the Session of the RF Government of October 6 the draft federal law On consumer goods basket across Russia as a whole was considered. At the Session of October 27 the minister of regional development of RF Yakovlev V.A. presented a report On implementation of the federal law provisions "On general principles of organization of self-governance in the Russian Federation", broadening the powers of the bodies of state power of the RF Subjects and delegating to local governments individual state mandates.

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