RF Government sets forth priority measures to ensure sustainable economic development and social stability in 2015
The Government of the Russian Federation has drafted and approved the plan to ensure sustainable economic development and social stability during the most unfavourable foreign economic and political situation.
According to the document published at the website of RF Government, the measures stipulated for 2015-2016 are designed to accelerate economic restructuring, stabilise strategic companies in the key industries, balance the employment market, reduce inflation, moderate the consequences of the increase of prices of socially significant goods and services for low-income families, and ensure growth and macroeconomic stability in the medium term.
The key actions under the plan for the coming months include:
- supporting import substitution and the export of a wide range of non-resources, including high-tech products;
- assisting the development of small and medium-sized businesses by reducing their financial and administrative expenditures;
- creating conditions for attracting working capital and investment at affordable costs to the most important sectors, including during the implementation of state defence contracts;
- compensating additional inflation outlays of the most vulnerable groups of the population, such as pensioners and multi-child families;
- reducing tensions in the employment market and supporting full employment;
- optimising budget expenses by pinpointing and reducing ineffective spending, concentrating resources in the priority development areas and honouring public commitments; and
- stabilising the banking system and creating a financial restructuring mechanism for strategic companies.
The chapter “Stimulating Economic Growth” includes stabilisation measures, import substitution, support for non-resource exports, reduction of business outlays and support for small and medium-sized businesses.
The chapter “Supporting Economic Sectors” provides for reviewing the priorities of government programmes, federal targeted programmes and the federal targeted investment programme in order to finance priority areas and additional anti-recession measures. It includes support measures for the agriculture industry, housing construction and the housing and utilities sector, industry and the energy sector, as well as transport.
The chapter “Ensuring Social Stability” will target efforts to change the employment structure, social assistance, healthcare and the provision of medicines and medical products.
The plan also includes monitoring the situation in the economy and the social sphere.
The Government will submit a draft law to the State Duma to reduce the majority of expense items of the 2015 budget by 10 percent, primarily by eliminating ineffective spending. At the same time, all social commitments must be honoured, which calls for additional budgetary allocations. Moreover, spending on defence, agriculture and the fulfilment of Russia’s international obligations will not be reduced. Budgetary investment will be focused on completing current projects, while the implementation of some new projects will be delayed. Spending on the operation of government bodies will be lowered, including by reducing the financing of enhanced comfort services.
The new macroeconomic forecast, which has been prepared in light of the unfavourable foreign situation, will serve as the basis for proposals on the continued streamlining of the federal budget in the medium term, including through the annual reduction of expenditures by at least 5 percent in real terms in the next three years. By 2017, it is necessary to balance the budgetary system, taking into account the most probable prices of the basic Russian exports.
The Government believes that the gradual stabilisation of the global commodity markets and measures to be taken in cooperation with the Bank of Russia will eventually normalise the situation in the foreign currency market and create conditions for considerably reducing nominal interest rates and increasing loan affordability. This will help the basic industries gradually overcome the recession, including thanks to the increased price competitiveness of Russian products due to rouble weakening. The accompanying decrease of the inflation rate in the consumer market will reduce the crisis effects on the quality of life in Russia.
While implementing emergency anti-recession measures, the Government will also prioritise structural reforms to diversify the national economy and create conditions for sustainable economic growth in the medium term, which will be reflected in the revised edition of the Policy Priorities of the Government of the Russian Federation. Efforts to ensure macroeconomic stability and lower inflation should be complemented with:
- the implementation of government programmes to increase the quality of healthcare and education systems in accordance with the 21st century requirements;
- the creation of conditions for the priority growth of the share of private investment in GDP, accelerated and appropriate implementation of the National Business Initiative roadmaps, and comprehensive improvement of control and supervision, including by taking a risk-based approach, so that Russia will achieve a high ranking in terms of doing business;
- the effective use of all available industrial policy instruments, including large direct investment, primarily for purposes of import substitution and export support (project financing, guarantees, industry support fund, industrial parks, government procurement and public-private partnerships);
- the development and implementation of the National Technology Initiative based on the latest achievements of the Russian and international funDamental sciences and the use of new innovation infrastructure (the Skolkovo Innovation Centre, science and technology parks, leading universities and innovative development institutions);
- the stabilisation of the tax system combined with tax incentives for encouraging structural change;
- the continued modernisation and balancing of the pension system and the system of social benefits (by making it more target-oriented); and
- a radical improvement of the quality of the system of state governance and the effectiveness of large state-controlled companies.
The Government will implement these anti-recession measures in close cooperation with the Federal Assembly, regional authorities and local governments, as well as with the professional and expert communities within the Open Government programme and other forms of cooperation.
This list of priority anti-recession measures is not exhaustive and will be amended when and if necessary.