Nadezhda Ivanitskaya, Yevgeniya Pismennaya, Anna Baraulina
The Government has published a plan to support the economy
The plan specifies measures to bail out enterprises in crisis conditions and is expected to increase the state's role in economic management.
"The sooner we activate new development and growth factors, the more confidently we will pass through the period of global instability," said Prime Minister Vladimir Putin as he signed the plan.
The measures are grouped under 10 headings. The state is most concerned about the banking sector and domestic demand. Bail-out priorities are: farming, construction, engineering, and the defence industry. The Government will name sectors to be supported by the banks, increase subsidies to enterprises, and give financial backing to the natural monopolies and state corporations.
Retail business, which Mr Putin considered to be a priority a week ago, was taken off the list at the last moment. It is an intermediate link, a Government official said, while support is concerned with end demand. The banks took little time to issue loans to retailers and the problem is now solved, said Deputy Industry and Trade Minister Stanislav Naumov. Support is still necessary, argues Lev Khasis, executive director of X5 Retail Group; perhaps it will be included in the next package. Sergei Galitsky, Magnit general director, disagrees, arguing that the measures are adequate. The state banks are issuing new loans and do not claim back old ones. Strict Government control, he said, was also present; Deputy Prime Minister Igor Shuvalov himself phoned and asked if the money had started arriving.
Power generation was not among the candidates for support either. The programmes need revising, said presidential aide Arkady Dvorkovich, but it has not been ruled out that new measures will be included to support the power industry.
DIRECT INFUSIONS
The main instrument that the Government will use to bail out the economy is federal budget subsidies, and the chief beneficiary will be the defence sector: the state will give it every support. Defence plants will be subsidised to pay interest on loans, and will be issued anti-bankruptcy loans and investment and tax credits.
Farming is another beneficiary. VEB will finance its big projects and increase the capitalisation of Rosselkhozbank and Rosagroleasing, while shouldering credit interest payments (at the Central Bank's refinancing rate). This is a forced step, said a government official. The world harvest is good, and farm produce is cheap.
More subsidies will be issued to exporters. The federal budget has allocated three billion roubles for this purpose for 2009, but is planning to double the sum and extend support to a larger number of enterprises, Mr Naumov said.
Strategic enterprises will also get state support: authorised organisations will buy out their newly issued shares. The plan will likewise support the investment programmes of natural monopolies and state corporations. There are projects that must be implemented in any event (the Winter Olympics, for example), Mr Dvorkovich said, and decisions on them will be adopted individually.
A cost estimate for the new anti-crisis package has not yet been calculated, the Government official said, but budget amendments are to be considered only in February.
NEW STATE PLANNING AGENCY
The state has decided not just to give money to the banks but also to instruct them on how to spend it. This rule will apply to all banks that decide to benefit from state support "in various forms". In November, the Central Bank will give recommendations to the banks, and the Government will sign directives on loans for certain priority branches. The list includes car making, farm machinery building, air carriage, and housing construction. Loans to the defence sector, farming and small businesses will be issued on a quota basis.
Car-making and the farm machinery industry were not supplied with federal resources and thus must be targeted as priorities, Mr Naumov said. Subsidies to the automotive industry will maintain demand for metal products, but this does not mean that other branches will be lent money on the leftover principle, said Mr Putin's press secretary Dmitry Peskov. He insisted that the document was not a dogma and could be changed.
The Economic Development Ministry and the Central Bank will act as watchdog agencies.
The new rule will apply above all to Sberbank, VTB, Gazprombank, and other banks, which will receive subordinate loans (950 billion roubles), said a Finance Ministry official. Others will only receive a recommendation, which may also be extended to banks that issue loans to Sberbank, VTB and Gazprombank, he said. The final say will be with the banks - the state will only give the go-ahead, Mr Dvorkovich said.
It is natural that the state should link money issued to the banks with recommendations on how to lend it to particular industries, said Pyotr Aven, President of Alfa-Bank. In each sector, there are enterprises in need of loans. "The Government is offering nothing extraordinary, we have been lending money to these branches as it is," said Oleg Vyugin, Chairman of MDM-Bank, but using the state sector for issuing commercial loans looks like state planning, he said.
What needs to be done is not to subsidise the rate, but to alter the lending mechanism itself, said Vladimir Salnikov from the Centre for Macroeconomic Analysis and Short-Term Forecasting. These are not strategic measures, they are contingency steps: the idea to use the crisis for boosting industrial development has still not been implemented.
"The crisis is just another cover for state intervention in the economy, but such intervention will do little to help the Russian industry," said Yevgeny Yasin, a former economics minister and current Research Director at the Higher School of Economics. An increased role of the state in economic management is a necessary but a fleeting factor, believes Andrei Zverev, head of the Government think tank, asserting that it is a response to new realities.
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DONE AT LAST
Surprisingly, progress has been reported on matters that have, for a long time, been stagnant. For example, more opportunities will be offered for investing the pension savings of the "silent ones", and infrastructure bonds will be issued against VEB guarantees. Both projects are to be submitted to the Government in early 2009.