Page 15 - RusRPTJan21
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same day as Putin announced his other big political project for his fourth presidential term: the reform of the constitution.
But then came the COVID-19 pandemic and upset all plans, or so it seemed: the government, which counted on a favorable fiscal situation, suddenly had a crisis to handle and the deadlines of the national projects were pushed back from 2024 to 2030. It seemed that – similarly to previous grand development schemes – this one would also fall victim to an unexpected crisis.
In November, however, despite a still-raging pandemic, Mishustin seemingly picked up where he left off in April and announced a sweeping reorganization of Russia’s development institutions, complete with a government reshuffle, which, among other things, seemed to strengthen his team. At the same time, the federal government’s plans with regions remain unclear.
Government shake up Most regions are badly in need of substantial investment but due to budgetary constraints and political centralization they had been a bottleneck for the national projects even before the pandemic. As long as political and development goals are not aligned, this will hardly change.
On the surface, Mishustin’s reshuffle ticks all the boxes. It is true that Russia’s so-called development institutions – a loose term that can mean anything from specialized budgetary funds to state-owned monopolies – have been a financial sinkhole, so consolidating them is a welcome step.
The government also plans to reduce the number of public servants (which usually means the sleight of hand of closing vacancies rather than dismissing people) and there are talks of the obligatory hi-tech element too: an artificial intelligence may not become Russia’s president just yet due to its lack of “a heart, a soul, a sense of compassion or conscience”, but apparently this might not be an obstacle for an AI to evaluate the performance of regional governments.
The reform also aims to make the remaining institutions more transparent, which, again, would be a positive development, given that in the past these funds and companies were often used to hide inefficient spending or build a patronage network.
The reshuffle also asserts Mishustin’s authority in the government, which may thus be re-established on a firmer footing in the process of decision-making and implementation. Beyond these immediate gains, however, the question remains whether the reshuffle will make spending on development more effective.
Purses and strings Half (51.3%) of the planned spending on the national projects is federal money. A fifth (19%) should come from regional budgets and the rest from so-called extra-budgetary sources. Thus, even assuming that budgetary funds are all spent, which has not been the case, the projects rely on heavily on something called the fiscal multiplier – a number expressing how much economic growth each percentage of increase in federal spending
15 RUSSIA Country Report January 2021 www.intellinews.com
