Vera Kuznetsova
Putin demands that Russian economy get federal allocations
Just as he promised the other day, Prime Minister Vladimir Putin chaired a meeting on economic issues at his Novo-Ogaryovo residence. The meeting was supposed to approve a comprehensive plan for supporting domestic industries.
Russian banks now receiving massive federal allocations must not transfer them abroad and must not use them to buy dollars, either. On the contrary, the funding must be used to finance the Russian economy.
An amended version of a plan, drafted on orders from President Dmitry Medvedev, is to be published in the next few days.
On November 16, Prime Minister Vladimir Putin spoke of ideological aspects of domestic industry problems but did not outline any detailed plan for their solution. Putin singled out three main elements of a plan for supporting high-priority industries.
The first element aims to expand regulatory documents for protecting the legitimate interests of investors and creditors. The plan also stipulates bankruptcy prevention measures. Naturally, there exists a certain dialectical contradiction between both aspects, since companies go bankrupt when investors and creditors are right, and investors and creditors experience problems when bankrupt companies are right.
Quite possibly, these inter-linked contradictions are the main concept of the new plan for supporting domestic industries.
The Prime Minister said that the second element aimed to invigorate the most cost-effective forms of corporate support. "I want to stress that, instead of displaying private initiative, the state will promote such initiative," Mr Putin said.
The third element aims to increase assistance to small and medium-size businesses many times over, Mr Putin said. Previously, it was planned to boost state support to small businesses from 3.4 billion roubles ($124 million) to 50 billion roubles ($1.8 billion).
"I want to note that the proposed plan's implementation will require substantial law-making activity. I am asking you to promptly draft all the required bills and to launch their discussion with State Duma deputies," Mr Putin said.
Mr Putin also promised to make such plans public and to publish this document on the Government's website. "This must be an absolutely public plan. Please edit it within the next few days and publish it on the Russian Government's website," he said.
Mr Putin warned future critics that the plan was a living and "open" document, rather than dogma, and that it would be modified in the context of global market and Russian economic changes.
Judging by the Prime Minister's statements, this "living" document will focus on the construction and engineering sectors, the defence industry, the raw materials sector, and agriculture. Moreover, it will attach priority to retail trade, because Mr Putin believes that its state has substantial social implications.
The November 16 meeting implies that the Prime Minister is mostly concerned about the fact that, instead of facilitating the economic-financial turnover, federal allocations are either hoarded or transferred abroad.
"This is why I think it would be justified to step up Central Bank control over the work of managerial agencies of banks receiving federal allocations under the bailout plan," Putin said.
"I understand those businessmen who want to set up their own quasi-stabilisation fund and who are trying to insure themselves against additional risks if the global situation gets worse," the Prime Minister said, while criticising bankers for transferring federal allocations abroad and for buying dollars on the domestic market.
In this case, it was obvious that understanding is not forgiving.
The Prime Minister openly said that the banks were misusing federal financial aid. "Most importantly, we are not setting aside huge state resources for this purpose. I want to repeat: Russian federal funding must work in Russia, and we must resolutely thwart any departmental and corporate economic egoism," Mr Putin said.
The Prime Minister also told major companies with state capital to think about their investment plans. Mr Putin said that Russia and its largest companies are powerful enough to implement their high-priority investment projects.
The crisis (the Prime Minister still does not use the word "crisis" with regard to Russian developments) is sufficient reason to reassess the effectiveness of investment programmes and to adjust their financial parameters.
On November 16, this aspect was mentioned for the first time at the government level. If the state and major state-owned companies stop squandering money and become cost-effective spenders, then this could serve as a key measure for supporting domestic industries.