Golikova: government goes into standby mode

Golikova: government goes into standby mode

The past year has been wasted to change the structure of budget expenditures, and at the beginning of this year the authorities have gone into 'standby mode', which prevents  development of the economy, the head of the Accounts Chamber, Tatyana Golikova, said.

"That's what I spoke about: everyone is in standby mode now, which is harmful for the development of the economy," she said in an interview with the Vedomosti newspaper.

The head of the Accounts Chamber recalled the situation at the beginning of last year, when there was a similar process of budget cuts. "And when we made the decision to reduce costs in early 2015, I was arguing with the Finance Ministry, because I was strongly opposed to the reduction of costs by 10% and providing ministries with the right to determine priorities on the remaining 90%," she said. "The ministries have redistributed the remaining 90% for a long time and lost the first quarter," Golikova noted, adding that "no one made sure that the remaining 90% or part of it could help the economy to grow."

She sees the current situation as a "professional challenge to managers: either you are able to work in such conditions or not."

According to the head of the Accounts Chamber, if the current government has got into a situation like 1998, "it would have had neither the strength nor the will to cope with the situation, which requires a fast solution."

Commenting on the data on the inefficient use of 440 billion rubles, revealed by the Accounts Chamber, the head of the agency said that this figure is provisional and final data will be released later.

"440 billion rubles is a preliminary figure. Classical inefficiency is about 78 billion rubles out of this amount. The violation in the investment budget of about 69 billion rubles will be in the first place, use of the government's assets will be about 48 billion rubles, procurement violations will be 39 billion rubles," the head of the Accounts Chamber added.

She did not rule out that the Russian budget for 2017 may be annual, as well as the budget for the current year. "We must understand if the budget for 2017 will be annual or will we return to a three-year budget? But if we return to a three-year budget, it is necessary to consider what structural reforms we should implement and what expenditure structure should be the basis for the formation of budget in 2016," Golikova said.

"It all depends on the degree of certainty and political will to take decisions right now. But they need to be planned before October 2016," she specified.

The director of the center for research into regional reforms of the Institute of Applied Economic Research of RANEPA, Alexander Deryugin, in an interview with a correspondent of Vestnik Kavkaza, explained the government's 'standby mode' was due to the absence of a specific plan of action in the new conditions. "The statements on the anti-crisis plan lacked specifics: firstly there was a figure of 420 billion rubles, then 500 billion rubles, then 750 billion rubles, but now it turns out that 310 billion rubles have already been budgeted as loans to the regions, while the rest don't have sources of financing. As a result, we have zero efficiency of anti-crisis measures," Deryugin said.

All the problems are due to a lack of definition, the expert stressed. "Everyone is waiting for specific wording and certainty of fiscal policy. I think the government simply goes with the flow and is not ready to take any drastic initiatives on the budget," he said.

In this regard, he expects that the next budget will be adopted for 2017 only. "The World Bank revises the global growth towards the slowdown, which also provokes a fall in oil prices in the long term. And I do not see how we can return to a three-year budget in this situation, since we haven't made any decisions on cost optimization, even for 2016. We simply do not have any sources of funding," Alexander Deryugin admitted.

"One of the options is to dramatically reduce costs in order to ensure a balanced budget. But it will be more than a 10% reduction. Raising of the retirement age, sharp reduction in defense and social spending are also necessary. But it's obvious that no one will accept such decisions before the presidential elections in 2018 and the elections to the State Duma."