On Russia’s Anti-crisis Measures (Ambassador Yakovenko, for Russia Today)
Given the negative trend in the Russian economy in late 2014 - early 2015, caused by a complex of internal and external factors, including the sharp decline in world energy prices and the western sanctions, the Russian Government has approved the "Priority Action Plan for the sustainable development of the economy and social stability in 2015". The plan,worth about $35 billion,is to support the Russian economy during a period of unprecedentedexternal political and economic pressure.It includes 60 measures aimed at securingsustainable economic development and social stability during this period and follows three basic principles - to encourage economic growth, support priority industries and fulfill allsocial commitments.The measures stipulated for 2015-2016 are designed to accelerate restructuring of the economy, stabilize strategic companies in the key sectors, balance the labor market, reduce inflation, moderate the consequences of consumer price increases for low-income families as well assecure sustainable growth and macroeconomic stability in the medium term.
The plan includes the followingkey actions: supporting import substitution and exports in the non-commodities industries, including high-tech sector; assisting the development of SMEs by reducing cost of capital and their administrative expenditures; creating conditions for attracting investmentsinthe key sectors; compensating additional inflation outlays of the most exposed social groups, such as pensioners and large families; reducing tensions in thelabor market and supporting full employment; optimizing budget expenses, concentrating resources in the priority areas of development and fulfillingall social commitments made by the Government; securing soundness of the banking system and creating financial support mechanism for strategic companies.
The documentprovides for budget expenditurecutsof 10 percent in 2015, primarily by slashing inefficient spending. At the same time, all social commitments will be fulfilled, which requires additional budgetary allocations. Moreover, spending on defense, agriculture and Russia’s international obligations will not be reduced. Government investment will be focused primarily on completing current projects, while the realizationof some new projects will be delayed. Financing of theGovernment bodies will be reduced.
We believe that the gradual stabilization of the global commodity markets as well as measures taken by the Bank of Russia will secure the foreign currency market stabilityand at the same time create conditions for reduction of the interest rates and increasing loan affordability. This, in combination withthe increased price competitiveness of the Russian products due to the rouble weakening,will help the basic industries to gradually overcome the recession. The accompanying decrease of the inflation rate in the consumer market will reduce the crisis effects onstandards of living in Russia.
While implementing emergency anti-recession measures, we will also prioritize structural reforms to diversify the national economy and create conditions for sustainable economic growth in the medium term.
To secure better results, all mentioned measures will be implementedby the Government in close cooperation with the Federal Assembly of the Russian Federation, regional and local authorities, as well as with the professional and expert community. The mentioned Action Plan will be modified if it is necessary.