Shagreen three-year budget for the 2018 issued by the future winner of the presidential race

What a curious government approved the budget project the next three-year period? 2018. Budget want to test the reflection of the presidential election. So what changes await us. And when.

photo: Alex geldings

The old expression new person

With this problem and trying to solve it the first thing find: budget self-absorbed. Formally, for its drafters, the main thing is not presidential elections, and certainly not any structural reforms aimed, as we promised fencing between them with an eye to politicians, the experts on a particular future. In the budget the main thing — balance. This, of course, does not mean that the books won the policy — it does not happen. However, the budget for the budget, which is what it politics or pledge, the balance should be.

But how this balance is obtained, is a reflection of the policy. The budget deficit in 2018 will amount to 1.37% of GDP in 2019, at 0.84% of GDP, and in 2020 — 0,87% of GDP. And despite the fact that the Finance Ministry expected budget parameters on the basis of oil price of Russian Urals oil at $40 / bbl in 2018 and $42,4 — in 2020. in Other words, the budget includes a conservative scenario of development of the oil and gas market, the level of income in the case may exceed the design level.

So, the government’s economic policy, based on budget opportunities, must in the first place to provide the long-awaited decisive progress in poverty reduction (in Russia on incomes below subsistence level live more than 20 million people, or one in seven), not the implementation of the flagship projects (development of the digital economy, for example, or turning the country into a great transport power), and containment of the budget deficit in the framework, which seem to narrow in any other country.

The Finance Ministry is the explanation. The head of Department Anton Siluanov gave it, speaking in the state Duma Committee on budget and taxes: “Why did we reduce the deficit for the following years and orientirueshsya only on their own resources? We spent (to 2016. — N. In.) the volume of reserves be approximately what we have for next year. So we cannot, cannot use the airbag as we did in the post-crisis period”. Too many reserves have already eaten, and the crisis is over, it’s time to live within your means — that’s politics.

But what about presidential elections? Changes in the structure of expenditures, of course. But they do not determine a person budget. On the face of the old expression: “no Money, but you hold on!”

This, in particular, means that, in fact, no serious struggle in the presidential election are not expected. What would require a budget of mobilization. No qualitative changes in fiscal policy are anticipated. Already on this basis it can be concluded that the next Russian President will be the current President.

The secrets of “positive stagnation”

If you go back to the economy, some experts have found an explanation for the lack of serious differences between the draft budget and 2017-2019 2018-2020. It’s simple: the economy is still “in a stage of positive stagnation”.

“Positive stagnation” is, of course, not as good as “negative growth”, but still great. But if at this stage in politics nothing should be changed, so economic policy is separate from the economy. But then there is no economic policy as such. Why do we need government? To these questions, economic policy must change depending on what stage the economy is at least positive, though negative stagnation to bring the economy out of stagnation any up, not down.

What changes are still there in the budget? “Three pillars” costs the same: in the social sector (36.4 per cent for the next three years-2018–2020), defense (29%), to support the economy (14.7 per cent).

But what is interesting: on social policy in 2018 will be allocated 4,703 trillion virtually any, the plan for 2019 is 4,728 trillion roubles, and in 2020 — 4,866 virtually any trillion. However, all this falls short of the expenditure 2017 — 5,092 virtually any trillion. Here’s a pre-election policy.

Strictly speaking, this does not necessarily mean that the state will become even stingier against the citizens who most urgently need its support. The situation can smooth big the targeting of this support, although before the realization of this task faces many technical and administrative obstacles. In any case, the suggestion of the President, the government, as the Minister of labour and social protection Maxim Topilin, has approved a draft of a two-phased bringing the minimum wage to a living wage: 85% in 2018 and 100% in 2019.

There are interesting details and security costs. If the expenses under article “national defence” in 2018 it is proposed, as foreseen budget of the previous three-year period, reducing to virtually any 943,6 billion (virtually any 1,021 trillion in 2017), the expenses under article “national security and law enforcement” in 2018, on the contrary, slightly, but increase up to 1.3 trillion RUR 1,271 virtually any trillion in 2017. to Link it with the election year, but do not want to.

Priority projects, of course, is. But it is impossible not to mention the one among them. Digital economy development in Russia, was sounded several times as one of the most important objectives in the speeches of President Vladimir Putin. This is the sphere through which the world is paving the route in the fast-approaching future, and for Russia it is extremely important to try to catch to be among those countries that will determine its standards.

Here offers the three-year budget? Nothing! Program “Digital economy” remains without funding, that is, it simply does not. Deputy Prime Minister Arkady Dvorkovich, as a student, not to learn the lesson, is justified by the fact that the government “continues discussions on this issue.” A recognition of the fact that the government is able to set strategic priorities even after this subject has been clearly expressed by the President.

Other priority projects should pick up the scales. If the expenditure on defence and security account number in the trillions of virtually any, in 2018 mortgages and rental housing, education and health, respectively, will allocate 20,626 billion and 438 billion. And in 2019-2020, the spending on health and education are reduced even more.

Year three

Whatever and whenever offered as a strategy of economic experts, the current economic strategy of the state is that the three-year budget. And is available in 2018-2020 as the three-year strategy considerably differs even from the proposals of the Center for strategic research (CSR), which is headed by Alexey Kudrin, who is considered the ideological father of the economic policy which the Ministry of Finance carried out by his successors. It is worth paying attention to. What are these differences?

Firstly, CSR provides adjustments of new budget rules: instead of $40 a barrel as the cut-off price (the revenues from higher prices being reserved in the contingency Fund, now merged with the national welfare Fund) — $45. So a balanced budget is achieved and softer compared to the proposed Ministry of Finance fiscal policy. That is, CSR proposes to increase government spending.

Second, CSR offers a new way to prioritize government spending. The appropriate maneuver suggests a further reduction in military spending. Not only because they are modern economic science recognizes the unproductive, the main thing — here Russia is far ahead of both developed and developing countries. Russian military expenditures in the total expenditures of the consolidated budget is estimated at CSR, 6% versus 5% in developing countries and 3.5% in developed countries. The share of military expenditure in GDP, in Russia — 2.5%, in developing and developed countries — 1.5%.

On the other hand, CSR offers one-third to increase funding for infrastructure, especially transport, projects, expenditures on education increase by 2024 by 0.8–1.0 percentage points of GDP compared with the current level of budget spending on health care — 0.7–0.8 p.p. of GDP.

Plan CSR may like or not like it, but it is in contrast to the government budget the three-year period, at least, claims to be some strategy. The government after the Ministry of Finance continues budgetcanada dance.

The theme of the strategy returns us to the electoral field. In this context, a very curious look Natalia Orlova, chief economist at Alfa Bank. She believes that the three-year draft budget, in practice it may be annual, as in the draft budget does not include possible after the presidential election changes.

Russian specificity: when the outcome of the presidential election is devoid of intrigue, the post-election budget is more interesting election. Remember the post-election decrees of may 2012. So probably will happen now: first, Vladimir Putin will announce his electoral program, in which a significant place is the growth of public sector wages and social policy in General, and then the budgets will change. The wait is long.


Nikita Maslennikov, head of Department of economy and Finance of the Institute of contemporary development:

“To talk now about budget three-year plan is meaningless, because the draft does not spelled out the future neither the tax system nor the pension system nor the tariff policy. All these areas seems to be going to reform after 2018, but how exactly is unclear. So while it is appropriate to talk only about the budget for next year. I believe that this budget compromise. Because, on the one hand, it is quite realistic calculated income and expenses, provides for the implementation of basic social obligations. In particular, the indexation of pensions and even salaries of state employees, previously not fallen under the scope of the may decrees. The forecast for oil laid conservative, most likely in reality the price of a barrel will be above. It’s all pluses. On the other hand, there is no incentive to higher positions are not included structural reforms. In particular, we see no increase of investments in human capital, expenditure on health and education. There is also the cost of budget loans to regions. All this casts doubt on the possibility of annual GDP growth, even at a modest 2%. Most likely, we will see the pace is still less 1-1,5%. To summarize, we can say that the budget for 2018 is laid out well to go a year without financial shocks. It’s probably possible, but a breakthrough in the development to not wait.”

Ruslan Grinberg, head of the research Institute of economy RAS, corresponding member of the Russian Academy of Sciences:

“The budget problems as it approaches 2018 worsen, because the income is not increasing and costs are increasing, especially given the years of presidential elections. The GDP growth of 1.5–2.5% that we had fixed following the results of II quarter and I half, can hardly be called stable because it was determined more by market and seasonal factors. In the second half he may well come to naught. And then to authorities, apparently, have to follow the path of increasing the budget deficit, in particular due to the expansion of domestic and foreign borrowing. In principle, nothing wrong with that. We have the draft budget includes a deficit of about 1.4% of GDP. Meanwhile, even such a large economy like Germany and France, faced with the crisis, allowed himself a deficit of 5-6% of GDP. Another question, if we can find sources for foreign loans, as against Russia, there are international sanctions. However, if you do not increase spending, we are doomed to continue to wallow in depression and stagnation. On the whole I think that anyway in an election year, all the sisters will distribute on earrings, and the money is definitely there. Then we will start fighting financial fires. We are used to! As was said in the courtroom, former Minister of economic development Alexei Ulyukayev, the state of our economy is good, but not hopeless.”

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