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German Gref Finds a Way to Spend Stabilization Fund
Deputy PM Alexander Zhukov and Trade and Economic Development Minister German Gref presented President Putin with the documents on ways to form and use the investment fund. The documents’ mover German Gref fulfilled two contradicting conditions: he boosted the investment for 2006, as the State Duma demanded, and ensured that investment projects will be financed from the stabilization fund, if the budget is short of money.
German Gref was expected to present provisions on the investment fund back in early July. But the minister had to urgently update the macroeconomic forecast, which had been submitted to the Government July 22. The minister had to we-work the paper because the State Duma was dissatisfied that the Trade and Development Ministry with Finance Ministry lowered the revenues while drafting the budget for 2006 thus economizing on investment projects. All investment resources are estimated in the draft budget at 400 billion rubles so far, while the Duma demands it be raised up to 600 billion. After the update, additional revenues of 200 billion rubles has been found, however, the size of the investment fund remained unchanged. Under the documents of the Trade and Economic Development Ministry the annual volume of investment funds is to amount to 69.7 billion rubles in 2006, 72.9 billion rubles – in 2007 and 73.2 billion rubles – in 2008.
An economic approach to state investment was also backed by Vladimir Putin who underscored the importance to retain the country’s macroeconomic performance. This is mainly the matter of inflation as its level had to be risen to 10-11 percent from the planned 8.5-10 percent. “It is very important that the decisions to choose projects to be financed from the investment fund will be as transparent as possible,” the president said. German Gref assured that this condition had also been fulfilled. He promised to use the investment fund only on infrastructure projects on the basis of public private partnership, i.e. the funds will be allocated only against the state’s security. “Large nation projects” will be bankrolled with the time of the implementation of no more than five years and the state’s share of no less than 5 billion rubles. The range of returns on the investment is proposed to set at 4-10 percent. In spite of the intention not to raise the budget’s expenditures, German Gref preferred to be on the safe side and insisted that the investors get budget financing if the oil prices fall below the level provided for by the stabilization fund. So the money will be allocated from the stabilization fund.
www.kommersant.com
All the Article in Russian as of Aug. 02, 2005
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