VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
The Russian Government has taken its first step beyond just regulating the economy and towards systemic restrictions on state spending and direct support for industry. At the Government House yesterday, an inner cabinet meeting for the first time discussed a 15% cut in the approved tariff increases and a reduction in financing for special federal programmes by the same amount. A state commission was set up to distribute 625 billion roubles allocated as direct support between 300 strategic businesses, whose number was later to be raised to 1,500.
The Government is drawing up a list of companies in need of state support, as Prime Minister Vladimir Putin said at a Government Presidium meeting. Qualifications have been determined. The list will have two parts, one for federal and one for regional aid-300 companies for the former and 1,200 for the latter. As the Government explains, the list is necessary to overcome the formidable barriers through which allocations must travel to reach industry. The companies on the list produce a summary 85% of the gross domestic product and are principal employers, so their survival will prevent skyrocketing unemployment. Experts forecast tough competition for a place on the list. The race will be all the closer as the Government promises to make it an open-end list with terms prolonged when necessary. Mr Putin might sign an initial version of the federal list by tomorrow.
The government has made quite a few decisions to support the banking sector, but it takes time for funds to reach industries, Prime Minister Vladimir Putin lamented yesterday. To accelerate this process, it was decided to compile a list of major companies (accounting for 85% of the country's GDP) that are to be given "prime attention."
The Government may agree to increase VEB's capitalisation and guarantee its liabilities under an anti-crisis plan
Motorists in Russian cities staged mass actions yesterday to protest the rise of customs duties on imported used cars yesterday. In Novosibirsk protesters challenged Vladimir Putin, who raised the duties, to change from his government Mercedes to a Russian-made Volga. In Krasnoyarsk protesters advised him to "help the oligarchs out of his own pocket", while in Vladivostok several thousand demonstrators paralyzed traffic in the city for five hours demanding the resignation of Mr Putin's Government.
Moody's has revised the outlook from positive to stable on Russia's Baa1 sovereign rating and the ratings of eight state-controlled banks, which implies that their upgrade possibilities are tangibly reduced. Moody's will leave Russia's rating at no higher than Baa for the next 12 to 18 months. According to the agency, the Russian government spends too much from the country's reserves to support the rouble, which is an "ineffective policy."
At a meeting of the EurAsEC Interstate Heads of Government Council on Friday, Prime Minister Vladimir Putin announced the beginning of talks on giving Kyrgyzstan a loan of up to $2 billion to support the local economy. This is a huge sum, over 60% of the country's GDP. In the same address, Mr Putin spoke about the "reserved funds" to support the Russian banking system - 9 trillion roubles, 20.5% of the 2008 GDP, according to estimates made in September. 4 trillion roubles (9% of the GDP) have already been allocated. Earlier, Russia offered a $1 million loan to Belarus (another million is promised for the beginning of 2009), and began talks with Iceland about a loan of 4 billion euros.
Prime Minister Vladimir Putin is concerned about the growth of unemployment and does not see prospects for the better development of the situation.
The authorities have admitted that the Russian economy has gone into a recession. The one who had the courage to do so was Andrei Klepach, Deputy Economy Minister; higher-ranking officials are not yet daring to utter the word. Experts' forecasts are still gloomier than official ones: in 2009 they do not rule out negative growth in industry. A faulty anti-crisis policy, not the state of the world's economy, is to blame for this.
