{"id":1043,"date":"2016-09-21T09:50:23","date_gmt":"2016-09-21T09:50:23","guid":{"rendered":"https:\/\/krespoliskola.com\/?p=1043\/"},"modified":"2017-06-15T09:55:57","modified_gmt":"2017-06-15T09:55:57","slug":"sincerely-yours-at-your-expense","status":"publish","type":"post","link":"https:\/\/krespoliskola.com\/en\/2016\/09\/sincerely-yours-at-your-expense\/","title":{"rendered":"Sincerely yours at your expense"},"content":{"rendered":"
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Dmitri Medvedev \/ Photo: nnm.me<\/figcaption><\/figure>\n

Russian officials\u2019 increasingly frequent<\/a>\u00a0statements about the lack of funds in the country\u2019s budget to cover even the bare necessities of life make one almost believe their sincerity<\/a>. It is not that officials themselves experience money problems. The most recent examples with Medvedev\u2019s 35-billion-ruble country house<\/a>\u00a0or 8 billion rubles in cash<\/a>\u00a0discovered in the possession of the temporary acting head of Russia\u2019s anti-corruption agency, colonel Zakharchenko, do not leave any doubts regarding\u00a0 Russian officials\u2019 success in siphoning off the national wealth. However, besides a few million of ministers, lawmakers, policemen and prison officers who are comfortably settled in life, there are some 140 million citizens in Russia, whose living standards directly depend on budget funds left over after officials\u2019 rent-seeking activities.<\/p>\n

In late 2015 and early 2016, the country\u2019s budget was adopted with a deficit and later subject to sequestration. According to the most recent\u00a0official figures<\/a>, in the first half of 2016, Russia\u2019s budget deficit has reached 1.52 trillion rubles. Over this period, Russian tax and customs services have collected around 5.24 trillion rubles, and, all other revenues included, the country\u2019s gross national income reached the lower-than-expected 5.87 trillion rubles, since the 2016 draft budget envisaged 13.74 trillion rubles in revenues. It is obvious that at the end of the year, this figure will prove to be unattainable, as Medvedev sincerely admits.<\/a><\/p>\n

The government traditionally rejects <\/a>\u00a0the option of increasing taxes and thus suggests<\/a>\u00a0balancing the budget for the next three years by cutting spending by 3.5 trillion rubles.<\/p>\n

There are also the Reserve Fund and the National Welfare Fund (NWF), both had been filled during the years marked by high oil prices, but they are hardly the source of endless funds.\u00a0 This year, 1.17 trillion rubles have already been withdrawn<\/a> from the Reserve Fund to cover the budget deficit, and by the end of 2016 this figure is expected to reach from 2.2 to 3 billion rubles. \u00a0According to the Russian Finance Ministry, as of September 1, 2016, the Reserve Fund had only 2.09 trillion rubles<\/a> left, and there are obviously no means of replenishing it since chances are small that world prices on oil, gas and other raw materials are going to rise anytime soon. \u00a0At 4.7 trillion rubles, the National Welfare Fund<\/a> is doing slightly better, but one has to consider that money from this Fund is used to cover projects approved personally by Putin.<\/a>. According to specialists, up to one third of funds from the NWF<\/a> can be invested in illiquid assets.<\/p>\n

According to the Central Bank<\/a>, Russia\u2019s gold and foreign exchange reserves, that reached nearly $600 billion at the peak in oil prices in 2008, currently amount to about $395 (25.3 trillion rubles). However, considering that it includes<\/a>\u00a0both the National Welfare Fund and the Reserve Fund, the country\u2019s liquid reserves might in reality be considerably lower.<\/p>\n

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Tatyana Nesterenko\/Photo: Valery Sharifulin\/TASS<\/figcaption><\/figure>\n

According to a recent statement<\/a>\u00a0of the First Deputy Finance Minister, Tatyana Nesterenko, only the country\u2019s accumulated reserves allow the authorities to keep up an image of stability, and by the end of 2017 the government will not even have enough money to pay civil servants\u2019 salaries. \u00a0It is possible that Mrs. Nesterenko intentionally exaggerates or labors under a sincere mistake, and Russia has enough reserves to not only cover next year\u2019s expenses but to last till Putin\u2019s re-election in 2018 and even a couple of years more.\u00a0 One thing is clear and beyond any doubt: After Putin is gone, the country will have to pay an enormous price for this notorious stability.<\/p>\n<\/div>\n

<\/div>\n
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Pavel Ivlev, September 21, 2016<\/strong><\/em><\/p>\n

More articles can be found on the website of the Committee for Russian Economic Freedom:\u00a0http:\/\/russianeconomicfreedom.org\/<\/a><\/em><\/strong><\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Russian officials\u2019 increasingly frequent\u00a0statements about the lack of funds in the country\u2019s budget to cover even the bare necessities of life make one almost believe their sincerity. It is not that officials themselves experience money problems. The most recent examples <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[50,48,49],"tags":[],"class_list":["post-1043","post","type-post","status-publish","format-standard","hentry","category-economics","category-politics","category-publications"],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/krespoliskola.com\/en\/wp-json\/wp\/v2\/posts\/1043","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/krespoliskola.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/krespoliskola.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/krespoliskola.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/krespoliskola.com\/en\/wp-json\/wp\/v2\/comments?post=1043"}],"version-history":[{"count":2,"href":"https:\/\/krespoliskola.com\/en\/wp-json\/wp\/v2\/posts\/1043\/revisions"}],"predecessor-version":[{"id":1048,"href":"https:\/\/krespoliskola.com\/en\/wp-json\/wp\/v2\/posts\/1043\/revisions\/1048"}],"wp:attachment":[{"href":"https:\/\/krespoliskola.com\/en\/wp-json\/wp\/v2\/media?parent=1043"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/krespoliskola.com\/en\/wp-json\/wp\/v2\/categories?post=1043"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/krespoliskola.com\/en\/wp-json\/wp\/v2\/tags?post=1043"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}