Go to ...

The Newspapers

News from Russia

RSS Feed

Wednesday, October 26, 2016

Frozen budget

There are words that are in the Kremlin and the government are afraid to say. No, I’m not the reforms are not about democracy, which should only be sovereign, and not even about the revolution, without which we give God somehow live. I am about the economy. To say “cuts, contraction” about the budget is unthinkable and unbearable. So coming up with the words-replacement: from the last “freeze”.

The first time a good word is found even in 2014, when they disappeared our funded pensions: let’s call a spade a spade: the money is not just “gone to the Crimea”, but can never go back — no rubles, no points — nothing. Since then, the state got a taste and, according to the latest leaks from the Cabinet, prolong the freeze is already up to 2019. To get rid of verbal tinsel: a thug in a dark alley has a head and wins the purse. “It’s freeze your savings, citizen,” he says through plohovato worn on the head of a nylon stocking and dissolves in the twilight.

Bandit we don’t believe in, and the government hope: well, because you can’t have it… Maybe.

However, the word “freeze” was so successful that they are now called not only the weaning of pensions, and budget cuts. And when you consider that it will be accepted by the Duma not for one but for three years, to tighten their belts will have to stay.

What this is frost from the point of view of public expenditure? It means that in 2017, 2018 and 2019 for every expenditure item of the budget, from education to the army, will be allocated the same amount. In fact it is the reduction and cuts, as inflation has not been canceled.

Remember his salary in 2013 and look at her now: the money seems to be the same, but somehow not enough. Same story with the budget: if costs do not increase from year to year in proportion to inflation, on paper they will remain the same, but in fact will be much less.

What and who will suffer in the first place? I would not want to be a dark blemish, but the answer lies on the surface. If now the lion’s share of our budget is spent on the army and police, medicine, education and culture are financed by a residual principle, it will happen and in the case of freezing. Military money, according to rumors, will cut 15 percent, but the social costs are likely to be much more serious shrinkage, although there is already cut almost nothing.

At the same time you will have to part with money or regions: the Far East, Siberia and, strangely enough, Crimea. To all the other problems of the Peninsula added another sharp reduction in subsidies from the Federal center. In the end, most likely, will happen as in the old joke: “Dad, that means you’re going to drink less? — No, son, it means that you will eat less”. Yes, I’m talking about it, corruption.

Of course, it is necessary to mention that by itself the budget cuts would not be of much trouble, if in parallel the government was going to reform. That is to be pursued is a kind of exchange of money for freedom. Less money — freedom (any, from words to business. This would mean that citizens themselves will be able to earn their bread and not wait for the government to come and give. But we this will not happen, because “freedom” is a word from the category of those that in no event it is impossible to say.

Therefore, “I myself am not and others do not give: money will be cut off, and the opportunity to gain not give.

And after that there will come a time and the following troubles: it reluctantly, with difficulty, anonymously, angrily denying themselves for the camera, say in the economic block of the government. We are talking about the exhaustion of reserves.

Here, however, is not so simple. Formally, in Russia there are two large pods, preserved since the fat oil years: the Reserve Fund and national welfare Fund (NWF). In 2017, as they say in the Finance Ministry, the Reserve Fund will come to an end and the time comes to dip into the Fund, which at one time was conceived as a Fund for future generations, in the manner of Norwegian. In other words, it’s as if you have saved money children, and then would have taken them and eaten.

Of course, two of the Fund is a certain conditionality. The state may at any time throw it money from Central Bank reserves, but not dokidyvaesh because he doesn’t want to be confused pockets. Uncork their latest stash too uncomfortable, it will not call, and the alarm that no fragile bottom there and nearby. However, to run hand in NWF will soon have, and quite possibly sacerdot out in 2018, for the presidential elections, so in a last ditch effort to maintain social spending. And then, of course, the deluge.

To talk about the causes of these troubles — are already commonplace. First, of course, sanctions. How much would the power nor swaggered, and the inability to obtain money in the West at low interest for a noose hanging on the economy and not allow us to develop. And how much would the TV told us how we these sanctions cocked hat, this, alas, will not happen. To remove them you need the steps for this to finally begin to restore relations with Ukraine, at the same time stopping massive spending on war.

The second reason for the crisis in the economy is to spite mom frostbitten ears: “anti-sanctions”, the ban on the import of food. Note: it extended right up to the end of 2017, seriously ahead of time of Western sanctions against Russia. Formally, this is called the support of domestic producers, in fact, ruthless suppression of its own people.

Strange idea to put the entire country on subsistence farming to provide for themselves even tomatoes, although the computers in the XXI century is not working. We live in a time of international cooperation, and attempts to isolate obviously lead to delays.

Finally, numerous in recent years adopted laws at the root of destroying businesses and private property, also does not contribute to the economy and to attract investment. You invest — the state blows. You invest — the government introduces new tax in favour of another oligarch. You invest…. And, no, you will not invest.

Remember, the Bible described a prophetic dream about seven skinny cows that ate seven fat? Seven fat years and seven years of drought and crop failure. So now we graze the very skinny cow. Only they were not themselves: we brought them with their hands and fed them fat.

If the previous crisis was the world and to protect him Russia was objectively difficult, the current is completely and totally man-made. Oil is oil, but the ruble devaluation in two times can not only be explained by falling fuel prices. This is the result of the Russian authorities, which may not offer any new way.

Only “freezing”, that is highway robbery, cuts, cuts — and hope that arrive suddenly a magician in the blue helicopter… Gazprom is Not coming. Should oil prices rise slightly — in the United States once again earn the installation for the extraction of shale oil, after which the barrel will go down again. And the barrel is the only anti-crisis plan, because option “B” is announced: “no Money.”

Be here now “Putin’s plan — Russia’s victory”.

Hang in there, good mood and health.

Related posts:
The Central Bank has buried the traditional ideas of growth
Russian like vodka more in the CIS than in the homeland
Russians can forget about Charter flights to Turkey
The national Bank of Ukraine banned the Russian payment system


More Stories From Economy