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Novye Izvestia, September 22, 2003

Almost according to Plan

By Alexander Zhelyenin

During the plenary meeting of the Duma on Friday observers were shown once again that the budget on the eve of the elections is more than just a budget. For factions and deputy groups, public support of rejection of the draft budget is a signal to their voters first of all. In short, this is politics.

Prime Minister Mikhail Kasyanov and his deputy, Finance Minister Alexei Kudrin, fervently praised the draft 2004 budget to the Duma. The prime minister even called the draft budget "the budget of social progress".

Yabloko deputy Mikhail Zadornov disagreed. In his opinion, such references to the draft 2004 budget means "disrespecting the audience". TheYabloko faction believes that the draft 2004 budget is "anti-social". Zadornov concluded that Yabloko was not prepared to vote for this draft budget.

However, the position of Grigory Yavlinsky's party was the only surprise of the discussion. Not long before Yabloko had promised to support it, even though the party had written an alternative draft. At the last moment, the party apparently concluded on the eve of the federal elections that a principled stand was more important than the government's favour.

There were no more surprises that day. The centrists (Unity, Fatherland-United Russia, People's Deputy, and most of Russian Regions) voted for this draft, although Vladislav Reznik, who spoke on behalf of Unity on the eve of the vote, even criticized the draft budget a little for insufficient funding for the military.

Communist leader Gennady Zyuganov called the draft budget a document that retained all the vices of the current state system. In his opinion, "this is a budget of stagnation and delay." The Communists kept their promise and unanimously voted against this draft. The Agrarian Group and the Union of Right-Wing Forces (SPS) also voted against the draft budget. The speech of SPS leader Boris Nemtsov was most negative. He said that the picture presented in reports made by the prime minister and his deputy had nothing to do with reality. According to Nemtsov, 40 million people in modern Russia are living on incomes that are smaller than $2 a day, which is the poverty line according to World Bank standards. The finance minister disagreed with this estimate: in his opinion, the number of poor in Russia is half that level, only 20 million people.

None of the budget parameters were amended. The draft stipulates 2.742 trillion roubles in revenues and 2.659 trillion roubles in expenditure. The budget surplus will be 83.4 billion roubles. However, there will be a surplus if average prices for Urals crude oil will be no lower than $22 per barrel. If this figure in 2004 is $20 per barrel, the budget will record neither a surplus nor a deficit. However, according to the government's experts, this scenario is highly unlikely. Consequently the government has a chance to achieve these figures. It may manage to secure 5% GDP growth next year.

The 8-10% inflation forecast for 2004 raised the most debate. However, no one proposed a concrete alternative to this figure.

The draft budget passed in the first reading with 246 votes in favour, agains the required 226 votes. This result probably didn’t satisfy the government, as Kudrin had called on the Duma to beat last year's record, when 308 deputies supported the draft 2003 budget. However, it is quite possible that the second reading scheduled for October 15 will go more smoothly.


See also:

Budget 2004

Novye Izvestia, September 22, 2003

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