PRESIDENT AND BUDGET LINES

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THE FINANCE MINISTRY IS IN NO HURRY TO SPONSOR DMITRY MEDVEDEV’S PROJECTS

President Dmitry Medvedev wants his modernization projects assigned first financial priority.


Adjustment of financial priorities is taking the Kremlin and the government way too long. Insiders say that everything comes down to parameters of funding of the president’s economic modernization projects. What information is available to Nezavisimaya Gazeta indicates that finances necessary for the projects in question are to be reserved in the 2011-2013 budget. The matter will be discussed at a special meeting with the government in the nearest future.

Work on the president’s Budget Message continues. Last year, it was completed by late May so that Dmitry Medvedev delivered the Budget Message in early June. The whole process is taking longer than that, this year. Medvedev said yesterday that he would deliver the Budget Message in late June.

Budget messages are drawn on the basis of annual presidential messages to the Federal Assembly. Delivering his second Message to the parliament, Medvedev outlined the following priorities of economic modernization: medicine, space and telecommunications, development of supercomputers and software, energy efficiency and saving, nuclear power. In late May, presidential Modernization Board selected 38 projects to be carried out over the next several years. Their cost was tentatively evaluated at 800 billion rubles (including 300 billion rubles to be spent over the first three years).

Addressing the Federal Assembly, Medvedev also spoke of the future technopolis. This idea was later changed to development of an innovation town in Skolkovo not far from Moscow. This project alone is going to cost the budget more than 100 billion rubles. Technical reequipment of elections was another project suggested by Medvedev. According to what information this newspaper has compiled, it will cost 11-15 billion rubles.

The Finance Ministry is in no hurry to second Medvedev’s initiatives, much less finance them. Aleksei Kudrin suggests a cost reduction program in order to replenish the resources depleted during the crisis.

Medvedev intends to convene a meeting next week to announce that he wants money for economic modernization projects reserved in the 2011-2013 draft budget. Insiders say that the problem is in having these finances specified by individual budget items. As matters stand, colossal sums are channelled into modernization and innovations in Russia but effectiveness of their use leaves much to be desired.

Resolved to do away with this wasteful practice, the head of state intends to specify the projects he wants money reserved for.

Commenting on the time all of that is taking, experts pin part of the blame on the constitutional system. The president is above the pyramid comprising three branches of the government (executive, legislative, and judicial). In presidential republics like the United States presidents are chief executives. It was true of Russia as well when Vladimir Putin was the president. All his prime minister were but technical figures. Once Putin himself became the premier, however, it all changed.

Andrei Ryabov of the Carnegie Moscow Center pointed out that this was the problem with the powers-that-be in Russia: presidents in the system of power made all decisions but assumed responsibility for nothing at all. All responsibility rested with the head of the executive branch of the government. Ryabov called this arrangement a liability, a barrier to modernization. “This arrangement tolerates no modernization. It is after wholly different objectives. It is mostly after maximum integration of the ruling elites and classes into the corridors of power. It exists just for the sake of its own survival and not for the sake of reforms,” said Ryabov.

Political scientist Rostislav Turovsky said that the president and the premier functioned in the existing tandem as two different and autonomous institutions of more or less equal political weight. “The problem always aggravates when budget matters are on the agenda because it is the government that is traditionally responsible for the budget and finances. The government therefore aspires to maximum independence and autonomy in dealing with all these matters. The president does interfere every now and then, but he is often balked. The president lacks the clout necessary to seize control over finances.” Turovsky appraised Medvedev’s efforts to have modernization projects financed by designated budget items as a covert attempt to gain leverage with the executive branch of the government.

“Making the government answerable to the president at the constitutional level is an easy and simple solution,” Turovsky said. The Russian elite might eventually mature to the point where it will opt for amendment of the Constitution to make Russia a bona fide presidential republic. The Constitution was already amended last year when terms of office for presidents and lawmakers were extended. These amendments were initiated by the president. Will other, more profound amendments follow?

Igor Yurgens of the Institute of Contemporary Development objected to what he called penchant for amending the Constitution. “I stand for common sense, that’s all. The tandem offers Russia a unique opportunity to modernize itself without battles between conservators and reformers,” said Yurgens. According to the expert, these two ideologies were manifest in the two national leaders who could be trusted to promote modernization step by step and without conflicts. “No need to amend the Constitution for that. Let them meet and talk it over, and that will be that,” said Yurgens.

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