The government needs a financial plan, says Deputy Prime Minister, Minister of Finance of Russia Alexey Kudrin, to allocate resources and maintain a balanced budget, and it needs a concept to reach institutional goals.
Photo: Dmitry Dukhanin
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Fin. Min. Outplans Ec. Min. by 3 Yrs.
Deputy Prime Minister and Finance Minister Alexey Kudrin has announced that he will present a plan for Russia's economic development through 2023 by August 1. The 15-year plan is a response to the Ministry of Economic Development and Trade's intention of creating a development plan through 2020. Kudrin was speaking yesterday at an expanded collegium of the Finance Ministry, with Prime Minister Viktor Zubkov, First Deputy Sergey Ivanov, Deputy Prime Minister Sergey Naryshkin and Central Bank chairman Sergey Ignatyev present. The medium-term project will examine the consequences of the policy choices that the new government will make in the near future and will argue against further tax cuts and spending increases.
The plan will take into account slowing world economic growth and a projected cycle of changes in world oil prices that foresees the price of a barrel of oil falling to $86 this year and to $70 by 2011. Kudrin will also call for greater conciliation between government programs.
Kudrin predicted that the federal budget would limit its spending for the first time in 2009-2011. According to him, government spending grew by 30 percent in 2005, by 21 percent in 2006 and by 39 percent in 2007 (including capital for the institutions of development). “It's not going to be like that any more,” Kudrin warned. “We have to convert to budget spending growth of 9-10 percent in real terms and to 4-5 percent in the long term. All projects, no matter how necessary they are, will be subject to a more stringent selection process from the point of view of priorities.”
Kudrin's priority of money over projects runs counter to Economics Minister Elvira Nabiullina's call to “free up space” for greater expenditures. She pointed out that the priorities expressed by the country's leadership (investments in education, medicine, the infrastructure and research) were left out of the current three-year budget by the Finance Ministry. “First we have to calculate how much the concept will cost and then balance that in the 15-year financial plan. Economic priorities are, after all, primary,” Nabiullina said.
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All the Article in Russian as of Apr. 09, 2008
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