Maxim Tovkailo
Igor Shuvalov appointed Crisis Manager-in-Chief
Yesterday, Prime Minister Vladimir Putin announced that a state commission will be created to work on the anti-recessionary programme and the analysis of economic and social developments in Russia. The new commission will be chaired by First Deputy Prime Minister Igor Shuvalov, who has been meeting with businessmen for the last few months to involve them in anti-recessionary planning in accordance with the Prime Minister's order.
The new agency will supervise the prompt assistance to banks, businesses and individuals. Regions may need its help as well. Yesterday, the Finance Ministry called upon Governors to cut regional social expenditure.
The announcement was made by Vladimir Putin at a Government session. The commission will serve as the control centre "matching the social and economic developments amid the global financial crisis."
The commission's objectives will include the formulation of a customs tariff policy to ensure demand for Russian industrial products and "systemic anti-recessionary measures for the economic sectors most affected by the global crisis."
Putin also ordered Shuvalov to "promptly counter general negative social trends," including unemployment.
The composition of the commission will be revealed shortly. It is sure to include Ministers connected with the economy and the social sphere, among them all the Deputy Prime Ministers, as wll as Finance Minister Alexei Kudrin, Economic Development Minister Elvira Nabiullina, Health and Social Development Minister Tatyana Golikova, Industry and Trade Minister Viktor Khristenko and others. Presidential Economic Aide Arkady Dvorkovich is also likely to be appointed member of the new agency.
The state commission will debug the new anti-recessionary measures which have been in discussion for several weeks already but yet not made public.
The character of the latest decisions taken by the Government is more point by point than systemic.
Yesterday, the Government approved the decision to allocate 150 billion roubles to support the labour market. No details have been provided however on how this money will be spent. Another 300 billion roubles have been reserved within the budget for loan guarantees for the real economy, of which 100 billion roubles will be allocated for loan guarantees for the defence industry, and 200 billion roubles for state guarantees for the other industrial companies' obligations.
The company list will be drawn up by the new state commission chaired by Igor Shuvalov.
The agency will have to decide on possible ways to prevent recession from spreading across the whole country. Regional tax revenues have already decreased.
According to the Finance Ministry, income tax revenues dropped by 62% in November 2008 and those from personal income tax by 13%, based on November 2007 figures.
What's worse, no positive change is expected in the short run. According to Deputy Finance Minister Anton Siluanov, regional revenues from income tax and personal income tax in 2009 will decrease by 30% and 10%, respectively, compared to 2008.
Yesterday, Anton Siluanov said regions will have to cut social expenditures. "We (the Finance Ministry - Gazeta) are sure we need to do it now to avoid sequestration next year," the official said.
The Government, however, doesn't want to dramatise and is ready to support the regions with additional subsidies, as well as with so-called budget loans.
This is a relatively new way to support regions by appropriating money at a rate equal to one fourth of the refinance rate.
The Government says it will determine the funding for regional budget loans in February.