By Vestnik Kavkaza
The Ministry of Finances developed a draft of the report on the efficiency of expenditure of the federal budget, which requires the elimination of some state subsidiaries. For instance, the Ministry of Finances is considering the cancelation of subsidiaries for railway passenger carriages which travel further than 1500 km, a reconsideration of the pension system and expenses on the state sector. Economic experts don’t like the initiatives.
“We are crawling into a rather serious and long phase of stagnation, maybe even a recession,” the director of the Institute of Economics and the RAS, Ruslan Grinberg, “I see the paralysis of investment activity of the private sector; and without powerful state investment activity we cannot pull economy out of stagnation. We have many state programs on support of various industrial branches. Usually they are not fulfilled… Today we should discuss not only promotion of the economic growth, but also changing of the economic structure. We should think about a balance between revenues and spending… We have to spend money. Not save, but spend…”
“Why do ideas on saving money appear?” the head of the Institute of Strategic Analysis FBK, Igor Nikolayev, asks. “Because the government, the Ministry of Finances faced the problem of getting money. They are on the horns of a dilemma.”
Nikolayev thinks the choice is wrong: “Let’s see budget priorities. In 2013 the expenditure budget requires 15.7% of defense expenses. In 2014 it will be 18.2%. By 2016 – 20.9%... It is a share, not absolute figures, because absolute figures are trillions. This is our real priority. But we are told that social expenses are still prior. It is right to judge on priority, considering changing of shares. Thus, we have to make the conclusion that defense expenses are top-priority for us, rather than social expenses, as their share is decreasing… As for the maternity fund, there have been not many good measures in our socio-economic policy. It is one of few good measures. Today the sum is significant. This year it is 409 thousand ruble. First of all, it is spent on improvement of living conditions, mortgage loans, and so on. It means encouragement of internal demand, encouragement of construction. That’s what our economy needs. Why is the encouragement effective? We should spend budget money in such a way that people begin to spend their own money. People begin to spend their savings. The effect doubles and triples.” According to Nikolayev, the current economic situation points at saving the maternity fund. “Absolutely wrong priorities are being built in the fiscal policy for future years. Such priorities prove that stagnation is not the end, we will face recession,” the expert said
