Page 123 - RusRPTOct21

RZD invest program is one of the most far-reaching in its effects across the country, at least in theory. If they're increasing its spending plans while committing to preserve budget surpluses, they'll have to use credit issued from development institutions and other creative fixes to avoid revenue-measures for the company that raise costs across the economy. They're also likelyanking on reducing operational costs from the rollout of digitization initiatives with theirelarusian and Kazakh counterparts to simplify order compliance and container tracking. It's in fitting with the frequent investment targets that aim to use state money for about 10% of the desired total, with the expectation that the private sector will provide the other 90%. Only significant sub-sovereign borrowing expansions can make that feasible unless they're confident that the firms that now increasingly self-fund investments sitting on monopoly or oligopoly profits can throw enough money around. The more they use credit expansions that are politically negotiated between sectors – look no further than the money pit that is the defense sector – the less visible the economic risks become while increasing the relative cost for the state to intervene when a systemic shock arrives. Fragility is probably too loaded a word and not quite accurate. Systems that are quite fragile in theory can stille incredibly durable. RZD's financial plan seems quite manageable even with the shortfall. There's no reason to believe, though, that there's areakthrough in infrastructure investment coming.
123 RUSSIA Country Report October 2021 www.intellinews.com