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mobilized for large infrastructure investments in the next 2 years
What's strange is that the companies are receiving these subsidies when there's so much money available to provide income support. That less is spent on projects right now isn't just the hyper-orthodoxy of the economics team – labor shortages mean any large infusion of money into an infrastructure project create direct political conflicts over access to labor, what gets built, and nominal wage increases between sectors feeding into input costs. But a higher-pressure economy can force investments into productivity so long as firms expect demand to be there. That's why the lack of stimulus in Russia matters so much for its prospects post-pandemic. Without a boost in productivity, the export windfall providing so much cash for the budget will instead go towards managing deflation/stagnation while the exporters get richer still.
6.1.4 Budget dynamics - National Projects
Russia’s long-term economic policy is based on a set of National Goals for 2030 announced by Russian President Vladimir Putin in July 2020. The five umbrella themes of the 2030 national goals are:
a) preservation of the population, the health and welfare of the people; b) conditions for self-fulfilment and the unlocking of talent;
c) comfortable and safe environment;
d) decent and effective jobs, and successful enterprise; and
e) digital transformation.
Currently, there are 12 national projects to support the national goals. Implementation of these national projects will annually cost RUB4–5 trillion (3‒4% of GDP) during 2021‒2024.
About two-thirds of the money is to be financed by the federal budget, Bank of Finland Institute for Economies in Transition (BOFIT) reports.
“The most budget funds would go to road construction and other infrastructure projects, as well as the national demographic and healthcare projects (with most of that money going to fund the maternity capital allowance paid to parents of newborns, as well as for treatment and prevention of cancer and cardiovascular disease),” BOFIT said in a note.
The newest additions to the family of 2030 plans are the 42 strategic initiatives approved by the Russian government at the beginning of October that complement and support realisation of the national projects.
“The initiatives, which are quite heterogeneous, concern the social sector, construction, ecology, digitalisation and technological advancement. They place greater emphasis on issues related to climate change, but also call for such measures as developing new hydrocarbon deposits, substituting foreign production technology for liquefied natural gas (LNG) and other hydrocarbon extraction with domestic production technology, as well as increase the cargo tonnage shipped via the Northeast Passage. The projects also include such
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