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. Last Updated: 07/27/2016

Cabinet Approves E-Russia Plan

The government has approved the Electronic Russia plan — a $2.6 billion program to boost e-commerce and the Internet — but has appointed the Communications Ministry as the project's coordinator rather than its architect, the Economic Development and Trade Ministry.

E-Russia seeks to give a timeline for when certain laws should be adopted, create equal access to "e-education," build trust in Internet security and take part in global e-commerce.

Fifty-one percent of e-Russia's financing will come from the federal budget, 30 percent from regional budgets and 19 percent from nonbudgetary funds. The program is set to continue until 2010.

According to the program's planners, e-Russia will swell the information and software-services market by two to three times by 2005, and by five to six times by 2010. By the end of the program, the information technology sector is expected to account for 2 percent of the economy, while IT exports will be worth $1 billion to $2 billion per year.

The program also envisions transferring much of the state's work online.

Last year, the Communications Ministry came up with its own plan for expanding the IT sector, but it was rejected by the government.

Some market players are put out by the idea of the Communications Ministry taking the helm. "Communications Minister Leonid Reiman is an intelligent man who understands the interests of business. He does not, however, have a capable apparatus. There is simply no one to implement the program," said the head of a major computer company who declined to be named.

But the business community is in favor of the program itself.

"It is excellent that the program has finally been adopted. It sets out how the country should use IT to increase the effectiveness of the economy," said Olga Dergunova, head of Microsoft's local representative office.

Andrei Korotkov, head of the government's information department, suggests that the introduction of technology that would allow the state to buy goods electronically could result in savings of 20 percent to 30 percent.

"In absolute terms, this will allow us to cover all the costs of Electronic Russia and all educational programs," Korotkov said.

"We didn't include direct payments to IT companies in the project. The main thing that this program will ensure is a sharp growth in demand.

"By making this policy, the state is giving businesses a chance to satisfy this huge demand that is emerging literally from nothing," said Deputy Economic Development and Trade Minister Andrei Sharonov.

Several companies have expressed a desire to participate in the program.

"We wrote a letter to [Economic Development and Trade Minister] German Gref saying that we would like to participate in developing document-processing software," said Igor Simonov, head of Xerox's local representative office.

"The problem is, it's not entirely clear with whom we should work. Lots of hopefuls show up at once, so the next 1 1/2 to two months will be spent deciding who to work with," he said.