Central Bank Deputy Chairman Alexey Ulyukaev is anticipating a fierce clash between economic and financial officials over budget spending.
Photo: Grigoriy Sobchenko
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Budget Code Up for 2nd Discussion
// Financial and economic officials are to find common ground on its enforcement
Russia’s Prime Minister Mikhail Fradkov has ordered 17 bills to be drafted so that the new Budget Code could come into force in January. The Finance and Economic Development Ministries yet have to find agreement on the blueprints, which promises to become a new round of the fight over budget spending and federal investment programs.
The Russian Duma passed a new draft Budget Code in spring to endorse three-year budget planning and make state investments more transparent. The code will split the stabilization fund into the reserve fund and the fund for future generations and will introduce the so-called fixed oil and gas transfer which will be cut from oil and gas revenues to cover budget deficit. 17 other bills have to be passed for the code to come into effect. Their drafts are to be presented by December.
The bills are being drawn up by the Finance Ministry and the Economic Development and Trade Ministry. Economic officials are to draft papers on planning long-term federal purpose-oriented programs and guidelines for decision-making for investments in other programs. The two ministries were clashing to gain control over state investment spending during the Budget Code’s drafting. Finance Minister Alexey Kudrin called for a three-year planning of investment programs, but the code kept the current annual principle for a period ending in 2009.
Experts believe that the Finance Ministry will once again attempt to change the system of drafting investment programs. Capital investments are currently considered without the Finance Ministry’s participation, which sometimes results in unplanned extra budget spending.
Officials are also to provide clear guidelines for evaluating long-term federal investment programs. Financial officials have so far been unable to introduce a solid system to approve state spending on different investment projects.
Vadim Visloguzov
All the Article in Russian as of Aug. 13, 2007
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