Fulfillment of this agenda could enable the transformation of Russia into a country with a free market economy, ready for the challenges of the XXI century: joining the global market, forming an information society, constructing eGovernment, and developing a new knowledge-based economy.
According to UBS Warburg, despite its relatively quick growth compared to Russia’s gross domestic product, the Russian ICT sector in 2002 under-performed North American countries by a multiple of four and West European countries by a multiple of two, leaving it on a par with Latin America. The Russian ICT market was able to reach, and apparently slightly exceed, the pre-crisis levels of 1997 only in 2002 (see table 1).

Table 1. Volume of the Russian ICT market ($ bln). Source: Morgan Stanley, based on UBS Warburg figures, May 2002, forecast:

State policy initiatives in the field of society informatization should become a significant factor in accelerating the growth of the ICT-sector. These initiatives are outlined in the Federal Target Program “E-Russia”[2], which foresees, for example, an increase in the volume of the ICT sector of up to $10bln by 2010. A gradual growth in ICT allocations can be seen in the federal budget (see. fig.1). Particularly remarkable is the fact that in 2002 the entire Russian budget was equal to that part of the budget for U.S. government federal bodies allocated to informatization ($ 48bln).

Judging by the scale of press coverage, there may be the impression that the informatization of Russia does not extend beyond the limits of the Federal Target Program “E-Russia”. That is, by all means, a large misconception. Unfortunately there are no statistics that reflect the condition of the industry, market, consumption and established base of ICT in different sectors of the national economy. Until 2002, those interested in this problem could draw such information from global surveys on ICT development prepared by the European Observatory of Information Technologies www.eito.com, but during the last year something went amiss and the survey was issued without a Russian indicator. Where the state institutions found their complete data on the condition of ICT, and, based on this, made forecasts up to 2005 is still a subject of great intrigue. In any case, they tried not to allude to specific data and simply indicated a relative growth in the quantity of personal computers, the number of Internet users and other information, which they compared to 2002. Let us note that the site of an equivalent ‘electronic messenger’ in Great Britain gives forecasts based only on a forecast of the allocation of the total income of citizens and business, and a forecast of the absolute cost of goods and services for data transmission and processing. It’s very interesting to note that in the recently-adopted “All-Russian classifier of types of economic activity” www.gks.ru/, types of economic activity such as informatization are not mentioned at all, although there is, for example, a reference to “activity, connected with the use of computer technology and information technology” (code 72), which includes:

• Hardware consulting;
• Software development and consulting;
• Activity in the creation and use of databases and information resources;
• Maintenance works and repairs of office equipment;
• Other activities connected with the use of computer technologies and information technologies.

Perhaps the reason for this is that, according to the Federal Law “On Information, Informatization and the Protection of Information”, informatization is not an economic activity, but a mysterious “organizational, socio-economic, scientific and technological process for the creation of optimal conditions to satisfy the informational needs and rights of citizens, government bodies, local government, organizations, and social unions, based on the formation and use of information resources”. Apparently, that is why it is impossible to reveal the expenditure on informatization in the budgets of most Russian departments.

You can repeat the word “sugar” many times, but it doesn’t give you a sweet taste in the mouth. It’s just the same if you repeatedly talk about your devotion to informatization. Until this section of the national economy finds its just and transparent reflection in the State budget (first of all in its economical, functional and departmental classifications), until a distinct and transparent procedure for its creation is drawn up and worked out, and until a system of treasury control for ICT costs is established, informatization of the public sector and social sphere will remain an “island”, with seven separate entities instead of one integrated system.
Research on the budget process for funds allocation for the informatization of Russian state bodies, carried out by the State University – Higher School of Economics www.hse.ru and the fund “New Economy” www.neweco.ru) in 2002, allowed its authors to draw the following negative conclusions [3, 4]:

To the places where informatization has been “concealed”, as mentioned above, one can add federal target programs. In the below table you can see only those that bear “hints” to information communication technologies (ICT).

One shouldn’t forget about the foreign donors that contribute to Information Technologies implementation in government bodies. Among the projects being financed in such a way are:

• TACIS Project of assistance to the Ministry of Economic Development and Trade in the implementation of eGovernment and development of a web-site for the economic coalition of the ministries (http://www.tacis-medt.ru/gover.htm).
• USAID Project on the creation of an E-Government Competence Center administered by the American Chamber of Commerce in Russia (www.e-govcompetence.ru)
• EURASIA Foundation Project entitled “Monitoring System for E-Government” (http://www.processconsulting.ru/project/index.html).
• EURASIA Foundation Project “Methodical Materials for the Course “Methodology and Practical Recommendations for Construction Automated Systems for Transforming Public Enterprises” (www.fostas.ru)

And, of course, one should mention the credits, provided on a repayable basis for informatization to, for example, the RF Ministry of Taxes and Levies and State Customs Committee. The credits are estimated to amount to hundred of millions of US dollars.
The above analysis makes quite clear that informatization can be included in the budgets of departments (implicitly or explicitly), in federal target programs, and in projects supported by grants or by repayable credits. No one has collected complete information on the total amount of investment in the informatization of government bodies in Russia yet. Meanwhile, the Ministry of Communication and Informatization, taking into consideration its inability to fully carry out its responsibilities, has proceeded with the signing of bilateral agreements with the regions on their informatization. To date, such agreements have been signed with the Moscow Region and Republic of Chuvashia.

In business practice, the use of reengineering of business processes, which is followed by the design, deployment, and implementation of corresponding information systems and resources, has already become the norm. Sometimes, business restructuring (the creation of a new business structure, displacement and retraining of employees etc.) is followed by reengineering, and very often this is accompanied by the creation or modernization of an information system (resource). However, within administrative systems, reorganization and transformation can only be carried out by order, and such an order is usually given in the form of a law on the reform of a public service or administrative reform. The first concerns public service employees [6], the latter is a series and collection of administrative processes and regulations (http://www.sovetnikpresidenta.ru/800x600/searchframe.htm), i.e. something that is called a ‘government machine’. These precise reforms are usually connected with the reorganization of traditional governments and their transformation into e-governments [7].
Reform of public services and administrative reform, so longed for by the reformers of the previous generation, will take place. It will pave the way for eGovernment implementation in Russia. This became quite clear at the end of the year, when, on November 21, 2002, RF President V. Putin introduced a bill for consideration by the State Duma, “On the System of Public Service in the Russian Federation”. Alongside this, the President signed the decree of November 19, 2002 ¹ 1336 “On the Federal program ‘Reforming Public Services in the Russian Federation (2003-2005)”, and, on December 25, 2002, a plan of administrative reform was submitted by the Prime Minister M. Kasyanov. This will be implemented in 2004.
It is hard to overestimate the significance of these documents. Due to their absence, federal officials have creatively approached the issue and, for some reason, decided that the creation of eGovernment in Russia lies in the “webification” of government bodies all over the country. Some officials have come to the conclusion that government portals are the system-generic components of eGovernment, though they are no more than just one of the possible points of access, alongside a telephone, fax, e-mail etc.
All the intellectual and system-generic power of e-government is in systems, installed in their back office.
The issue of the RF Government resolution of December 27, 2002 ¹ 934 “On the Government Commission on Counteraction Against Infringements in the Sphere of Intellectual Property” has elicited considerable joy. The RF Ministry will accomplish technical, organizational and informational maintenance of the Commission’s activity through the press, telebroadcasting and other means of mass communication. It is to be hoped that the government will start to watch over the rights to intellectual property, first of all within government departments, and will serve as an example to society as a whole. Lots of companies working on the territory of Russia and developing and supplying software have recognized the government’s signal and have taken on in-house lawyers to interact with the commission to protect their rights. For example, Mikhail Yakushev, a well-known combatant against the infringements of software suppliers’ rights, and co-author of different legislative initiatives on the regulation of the Russian Internet segment, started working in the Russian representative office of Microsoft on January 13, 2003.
On December 26, 2002 the RF Government approved a project plan for the resolution “On the Access of Citizens to Information Concerning Government Authority and Local Authority”. The RF Ministry of Economic Development and Trade has been tasked with preparing the final version of the resolution and to submit it on January 17, 2003. The adoption of the resolution will make the executive authority more transparent and accountable to citizens.
On January 10, 2003 the RF President signed the Federal Act of the Russian Federation ¹ 20-ÔÇ “On the “Elections” State Automated System of the Russian Federation”. “Elections” is the authority’s most favorite state automated information system and the law regulates its “use at the preparation and carrying out of elections and referendums - which together are one of the guarantees of the realization of human rights in the Russian Federation - based on openness, reliability, efficiency and completeness of information concerning elections and referendums”. In the outlines of the State Automated System of “Elections” (GAS) quite naturally appear elements of so-called e-democracy, which make it technologically possible to bring to fruition the idea of all citizens participating in the management of their own state.
As we can see from the above, the end of 2002, despite the winter frosts, has been watered by the life-giving virtual rain of laws and resolutions which speed up the growth of electronic Russia. We conceal the fate of amendments to the law “On Communications”, as that’s another story, which requires a separate special statement.

• A series of scientific and research works and pilot projects, laying the groundwork for further efficient fulfillment of the program, have been completed.
• The RF Ministry of Communication and Informatization and the RF Ministry of Health have created an interdepartmental coordination council on telemedicine, a concept of rendering telemedicine services has been worked out, regional initiatives in the sphere of telemedicine have been standardized.
• The development of an automated system (“Border”), on controlling the movement of citizens, freights, and vehicles over the border has begun together with the Federal Border Service of Russia.
• Work on regulating a monitoring system for dangerous radioactive objects has begun in cooperation with the RF Ministry of Atomic Energy and Federal Control Committee for Nuclear and Radiation Safety (Gosatomnadzor).
• Specialists from the Ministry of Communication and Informatization and the Ministry of Taxes and Levies have started simplifying the procedure for declaring taxes and have initiated its transformation into an electronic form of reporting.
• Work on the creation of a system of information and marketing centers and state procurement, along with the creation of an automated State Population Register, and a system of network connections for high schools have been continued.
• The organization of events within the framework of the Federal Target Program “E-Russia” in the subjects of the Russian Federation has been made more active. The RF Ministry of Economic Development and Trade held a competition between bids from regional authorities on the fulfillment of different IT projects. Already in November, winners in different categories had been identified and rewarded. The regional winners (Republic of Buryatia, Republic of Chuvashia, Republic of Yakutia, the Tula, Nizhniy Novgorod, Chelyabinsk, Astrakhan, Yaroslavl areas, the Altai and Krasnoyarsk regions, and Novosibirsk city) were defined as key zones of support in the realization of different events within the framework of the program “E-Russia” in 2003.
• Work on the creation of an All-Russian network of children’s computer camps has been continued in close collaboration with the regional authorities. It is based on existing health resorts/holiday camps in Russia.
• The realization of projects on the creation of a replicable portal solution for the regional authorities and local government, a replicable e-procurement solution for authorities at the regional and municipal level, will continue in 2003. A network of call centers will be assembled and the connection of regional mass media to the open information systems will be continued.

The Federal Target Program “E-Russia” is one of a number of financed federal target programs, and in 2003-2004 the second stage will be carried out. In 2003, 1430 mln. RUR. was allotted from the funds of the Federal budget compared to 600 mln. RUR. allotted in 2002 (the federal law of 24.12.2002. ¹ 176-ÔÇ). More than 30% of these funds are going to be spent on the connection of budget organizations to the Internet and on the creation of Internet access centers. However, other programs will of course be fulfilled along with the federal program “E-Russia”. In the 2003 budget, for example, these include:

An increase in the total amounts of financing (though the amount itself is 10-15% of that put into the initial “E-Russia” project) raises the question of the creation of a program management system. This should, in fact, be applied consistently to all federal programs. As has been mentioned above, the existing bodies of interdepartmental coordination on informatization can only assist the Ministry of Finance and the Ministry of Economic Development and Trade in the efficient coordination of financing for ICT-projects, as they do not have any real power. According to a well-known Russian saying, whoever pays the fiddler picks the tune. Now, the Ministry of Economic Development and Trade has started developing a system of federal program management, but no-one is preventing the Ministry of Communication and Informatization from creating a management system of its own for the Federal Program “E-Russia” (AS-ER), as it appears to be doing now. AS-ER is supposed to be a series of technological, program-based, informational, technical and organizational means for the automatization of the following processes:

In 2002, the federal program “E-Russia” was the focus of much attention and publicity in Russia and, thereby, aroused interest in informatization on the whole, especially in the regions. A public relations campaign, the financing of which has been budgeted into the program itself, also contributed to that. A particularly good web site www.e-rus.ruon the program appeared at the end of 2002.
The program helped to revive interest in informatization within the Ministry of Communication and Informatization. L. Reiman created an IT expert council, which includes the heads of the biggest IT companies working in the Russian market. The minister has now appointed a first deputy, A. Korotkov, who is responsible for issues of informatization, including the program “E-Russia”. Responsibility for the informatization of the regions has passed from VNIIPVTI to the Council on the Problems of Regional Informatization formed under the State Informatization Committee. A new department on the coordination of the federal program has appeared, along with the Directorate of the Program. The latter appears to have become an independent federal unitary enterprise with branch offices in the federal districts. However quite a bulky structure of ‘management’ has been formed, which should be reviewed during the process of administrative reform.
The program has highlighted the urgent necessity to start a regular process of improvement the budgeting system, treasury control and the methodology of conducting public sector informatization, along with the creation of a management system for the federal target programs. Proposals have already been formulated, so the political will to ensure their realization is all that is now needed.
One may say that the merger of the Ministry of Economic Development and Trade with its brain center – the Higher School of Economics – and the research and solution of legislative, economical, financial and methodological questions of informatization contributed to some healthy competition between this ministry and the RF Ministry of Communication, and both fuelled and improved the activity of the latter in the sphere of informatization. A number of young leaders at the level of deputy minister and head of department have appeared who are full of the energy and desire to realize the real potential of Russia in the sphere of ICT.
It seems that informatization in Russia would get a second wind if the leader of the state joined the process. The experience of countries such as the USA and Great Britain, and the EU shows the benefit of leadership participation in e-Government construction. For example, on December 17, 1999 the former President of the US, Bill Clinton, published 2 memorandums: “E-Government” and “Use of IT to improve our society”. These memorandums initiated great work on the transformation and informatization of the state’s management system and its reorientation to meet the citizens’ needs. On December 17, 2002 President G. Bush J. signed the “E-government Act” (http://www.whitehouse.gov/news/releases/2002/12/200212175.html). The plan is to allocate $100 mln towards financing corresponding work and events for the coming 5 years. In the Office of Management and Budget (OMB) of the President’s Executive Department, an eGovernment department will be formed, which will be run by the Federal Chief Information Officer (Federal CIO). The Council of Chief Information Officers (CIO Council) will become legitimate. The first $20 mln were included into the budget project for 2002. This money will be spent on making interdepartmental connections and maintaining the initiative of different federal government organs in creating a unified interactive system of state information.