[home page][map of the server][news of the server][forums][publications][Yabloko's Views]
www.yavlinsky.ru
September 27, 2002

"A Word on the Budget"
Economy: the steps that have to be taken

by Grigory Yavlinsky

Existing economic mechanisms only achieve the very narrow goal of maintaining the present [economic] level, but fail to provide for medium-term economic growth. In terms of solutions to the main problems facing the country, the economic system has been in a state of decline and has been slow to curb, despite current growth, the country's problems that have been snowballing .

The structural imbalance in the economy has been growing. Despite relatively satisfactory growth rates for the past three years, GDP still amount to only 75% of GDP in 1990. The apparently perceptible 20% investment growth in 2000-2001 has been hampered by equipment obsolence. (The average age of equipment is 18 years: in addition 35% of equipment has been operational for over 20 years).

The country has to date failed to develop an efficient banking system and financial market: consequently we have witnessed no investments in this market. The Central Bank, Finance Ministry, Pension Fund and even Russian citizens dispose of fairly significant financial reserves. However, existing economic mechanisms fail to transform these resources into investments.

Furthermore, the general situation in the country could not be termed investor-friendly. Xenophobia and nationalism have gradually evolved from latent phenomena into overt aggression. Government draft laws submitted to the Duma for adoption this autumn, that call for a review of all existing subsoil licences, also demonstrate "stability" in the country. Finally, one of the top managers of the largest oil company in Russia and the world simply disappears in broad daylight (Ed. this is a reference to the kidnapping of Sergei Kukura, financial director of Lukoil).

The existing economic system can maintain at a modern level only 25-30% of the population of the country and one large city - Moscow. The rest of the country and citizens - about 70-80 per cent - live the same lives as in the past.

Another mini-budget presented by the government for the next year fails to even start resolving the main problems: reform of the security system, education, health care, army, housing and the communal services sector, incomes, a fall in unemployment and a halt to the demographic decline. It is crystal clear that these problems are not simply stagnating: the situation in all these sectors has been deteriorating.

Nevertheless, we assert that it is possible to render tax and budget policy more efficient, even with present capacities, to profer hope to entrepreneurs, increase budget revenues and finally find additional resources to cater to the social needs of the people. We have submitted our proposals to the President and the Government.

In general the country does have a chance. But it depends on the political will of the President, rather than oil prices.

For ten years we have been reading "The Moscow Times". Your paper has a distinctive voice, you are both clever and objective. You are trying to treat the most painful and acute problems of the country with care and understanding. "The Moscow Times" would appear to be the most professional political newspaper in Moscow.

See also:
Budget for 2003

www.yavlinsky.ru
September 27, 2002

[ home page] [map of the server] [new items ] [forum] [publications] [Yabloko's Views]

english@yabloko.ru