Reducing budget deficit a priority for President Medvedev
Published: 29 June, 2010, 17:10
Edited: 30 June, 2010, 04:42
TAGS: Budget, Big deal, Economy, Finance
Russian President Dmitry Medvedev has unveiled the country's three-year budget plan for the next 3 years.
He has flagged slashing the number of civil servants by up to 20% and implementing special privileges for Russia’s Skolkovo research centre. He says the budget aims to create greater efficiency and competitiveness in the Russian economy, moving away from anti-crisis measures.
The President emphasized that reducing the budget deficit would be a key priority in the coming years.
“I propose to proceed with a 50% cut in the federal budget deficit by 2013, compared to the 2009 level. That’s the task that all of the G20 countries, all the countries with developed economies, are putting in front of themselves. This is not just an acceptable reference point for us, but a definite need. If we don’t cut the deficit enough, we risk losing the stability of the budget system which we have worked hard to reach.”
Speaking with Business RT, Vladimir Osakovsky, Head of strategic Planning and Development at UniCredit Bank, was optimistic about the President’s budget plan and said that Moscow becoming a global financial centre was just a matter of time and proper Governmental support.
29.06.2010, 11:36
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We need be bold, but targeted and controlled with the reduction, including feedback mechanisms. This requires little waves, with suitable spacing. The reasonably solid SMEs can step up to the mark, providing they are encouraged, and have access to the tools to allow them to do it. They need be primed before. The no hopers will perish, there is no doubt, and others will arrive as new. We should see the forcing of businesses into an environment that they must independently fend for themselves as a very positive move. But we must manage it, forcing zoo animals into the wild, can quickly result in a lot of dead animals, and the health hazards associated with them. The old ones, if viable, have to be adapted, by providing them with the information and support they need, however at the end of the day, they must understand that the Zoo is closing. So if they don't act on their own initiative their carcas will be there for all to see. The new ones need support also, and an understanding, and more importantly reality, that what they create will be theirs, and the government underpins that right completely with the full power of the state. We should set ourselves a challenging but realistic target of maintaining growth at a certain level, whilst support is removed. The growth should be maintained through market development, both internal and external. Innovation and competitiveness, will be the key driving factors in this. The net result will be increased net fiscal flows back to government, even maintaining the taxation level constant. This will eleviate budget pressures in a sustainable fashion and more importantly will set the foundations for a normalised business environment in Russia. But this doesn't happen by magic, it needs the network of busienss support to do this, so we need this fully motivated, because today it doesn't feel the pressure and doesn't have the drive. This is a going to be a difficult, painful at times road, but a rewarding one in the end!