Page 9 - RusRPTJune18

Russia’s influence on the international stage military spending has already been cut by 20% and in his “guns and butter” state of the nation speech on March 1 Putin laid out an extremely ambitious reform programme.
Despite the aggressive “guns” but of the speech, the focus is actually back on the “butter” part. Falling incomes and deteriorating living standards has lead to more vocal protests, many of which have been organised by anti-corruption blogger and opposition activist Alexei Navalny, but not only. In his last term Putin badly needs to come up with some more “feel good” factor if he is to secure his own legacy – and avoid being jailed by his successor if things go badly. Putin’s legacy is on the table and he has adopted "Russia is for people" as the slogan of his fourth presidential term/
The main tenets of the plan have been worked out by former Finance Minister and co-head of the presidential council Alexei Kudrin and is liked by liberal commentators as addressing some of the basic problems like low productivity and the lack of investment into Russia’s human capital. Kudrin is widely expected to rejoin government – probably as a special advisor to Putin, or his deputy head of staff – but he was not included in the first round of appointments to the cabinet made by Medvedev following his reappointment on March 8.
Immediately after his inauguration Putin signed a new so-called May Decrees to replace the original set of May decrees the president put in place after taking office in May 2012. The decrees are the blue print for his next term and cover: demography, health and education, development of the urban environment, ecology, roads, digital economy and the social sphere.
Medvedev has been entrusted with implementing the 2024 presidential development strategy. And they are expensive. The Russian Audit Chamber previously warned that the new decree could cost about RUB8 trillion to implement, while government sources told the press in April it could be closer to RUB10 trillion ($162bn) .
Just where the money will come from to pay for this investment remains an open question. Kudrin thinks that the whole porgamme can be paid out of existing budget revenues if there is some juggling of taxes – the so-called tax manoeuver. No decisions on have been made, but options on the table are increasing VAT, removing many items from the privileged VAT lower rates list. There has also been talk of increasing income tax rates or introducing a progressive tax rate.
However, the one cost saving measure that seems sure to happen is the increase of retirement ages from the Soviet era levels of 60 years for men and 55 years for women.
The decree sets a number of goals:
- become a top-five global economy by size by 2024
- halve the poverty rate
- increase life expectancy to 78 years, then later 80 year
Investing into people : in addition to combating cardiovascular and oncological diseases, Putin proposes a focus on prevention through the promotion of healthy lifestyles, new medical technologies, the widespread availability of primary health care, including increasing the number of doctors.
Improving health and life expectancy will to some extent make up for the demographic fall in the work force caused by the catastrophically short life expectancy in the 90s.
9 RUSSIA Country Report June 2018 www.intellinews.com