In his meeting with Finance Minister Alexei Kudrin, Russian Prime Minister Vladimir Putin asked him to address Soviet deposits, frozen since 1991, in a just manner. Mr Kudrin promised to provide those who fell victims to the currency change with ‘necessary aid’ next year amounting to three Russian roubles for each Soviet one. Some experts describe this step as ‘alms-giving’ and suggest that the debt be redeemed by providing the victims with flats, for example.
Prime Minister Vladimir Putin held a working meeting with Russian Finance Minister Alexei Kudrin on Saturday. During the meeting, Mr Putin asked Mr Kudrin how the problem of these deposits could be resolved. The government plans to allocate 270bn Rbs ($9bn) for the purpose from 2010 to 2012.
Mr Kudrin reported that every year, the government works to boost the volume of funds allocated to settle the Sberbank accounts and the Rosgosstrakh personal insurance contracts frozen in 1991. This very year, the Finance Ministry did what it could to increase that sum, Kudrin claims, enabling more depositors to be partially reimbursed.
“In 2009, a total of 70 billion roubles will be paid in deposit reimbursements. This year, we will complete the first reimbursement package for all depositors, including all remaining unreimbursed deposits, at a rate of one to one on the amount of a frozen deposit,” Mr Kudrin reported. “Everyone born before 1945, people aged 64 and over, will be reimbursed threefold. It means that one rouble in a deposit will equal three present-day roubles. Those younger than 64 will be reimbursed at a rate of two roubles for each one rouble in their deposits. The total volume of required funds amounts to 85 billion roubles ($2.8bn), so we will spend more than in previous years to resolve the issue,” Mr Kudrin said. The Finance Minister called this reimbursement “an indispensable support in the coming year.” Apart from it, he emphasized that “the government will certainly continue this reimbursement of depositors in coming years and will move to a different reimbursement ratio.”
”We are not the ones who froze these deposits, but we are responsible for resolving the matter fairly today,” Mr Putin said. That’s why he asked the Finance Minister to provide all allocated funds for solving this issue and to stipulate conditions for the coming years. Mr Kudrin replied that such funds were allocated in a three-year financial forecast.
Nezavismaya Gazeta has previously written about the Ministry’s new rules for paying out frozen Soviet deposits in Sberbank, which were further acknowledged as Russia’s internal debt (see issue as of 25.11.09). At the time, the Finance Ministry said that it was just increasing the exchange rate to three Russian roubles for a Soviet one. The Ministry’s representatives refused to give any forecasts about the terms of deposits’ redemption. They said that Russia’s adverse budget situation could not provide full redemption, but it did provide for reimbursement. According to the Ministry’s representatives, these huge sums ought to be paid out in three years, and all payments will be based on the federal budget’s means. The Ministry plans to spend 85bn Rbs ($2.8bn) in 2010, another 85bn Rbs ($2.8bn) in 2011, and even 100bn Rbs ($3.3bn) in 2012. After 2012, the redemption rate will depend on the budget, whose formation will be accompanied by the issue of reimbursements. The Ministry had previously used the reimbursement system as a welfare support for elderly citizens and unprotected strata of society, but from next year, all depositors, even those who were born in 1991, will start getting the reimbursements.
Independent experts started referring to explanatory definitions. “Reimbursement is a full redemption of this or that value, and not another payment for making the public calm down,” said Professor Leonid Karapov. According to him, the deposits were frozen for six months in 1991, and when they were unfrozen, they were worthless. The problem is that nobody actually stole the money; it was burned because of inflation caused by the government. But social cynicism was so evident that the government had to pay the reimbursement at least partially.
However, everybody understands that the deposits will never be fully paid out, as the country does not and will never have enough money, and according to the expert, the debts will never be redeemed. “This sum exceeds one trillion dollars. At the peak of its economic development, Russia had $598.1 bn in reserves, and this is only 55% of what people lost,” Mr Delyagin said. The government has two ways out: partial reimbursement and reimbursement to unprotected strata of society. “And in this case, this is not reimbursement, this is alms-giving,” the expert summarized.
On the other hand, some experts believe that the government can redeem its internal debt. For instance, Leonid Karapov quotes the law of May 10, 1995, titled “Revaluation and Protection of the Savings of Citizens of the Russian Federation” and says that under this law, the debt can be redeemed not only by monetary funds, but by state property and state assets as well. Those assets include valuable real estate, and that’s why some hope that former Soviet investors could end up with flats in addition to “alms.”
Bashkatova Anastasia
