Image by Kremlin.ru
In his recent State of the Nation address, Russian President Vladimir Putin, in the runup to the 2018 Russian presidential election tomorrow, promised to improve the quality of life in various metrics of Russian existence. Today, his assistant outlined how the additional social spending needed to fulfill these goals would be accomplished.
Russian President Aide Andrei Belousov told reporters Friday Russia would spend less on the Russian military and ‘capital construction projects’, and more on social spending throughout the country, to meet the president’s promises.
“We have already mentioned that we would cut defense spending in line with GDP. This will be simply because we have passed the peak of saturating our defense forces with new types of armaments and military equipment. There is definitely room to boost the efficiency of budget expenditures in general and accordingly cut spending on capital construction. This is a huge sphere, worth about 600 bln rubles ($10.4 bln) annually, and savings can also be achieved there, amounting to tens of billions of rubles at minimum,” Belousov said, reported Russian state news agency TASS.
Belousov declared that the cost of the entire social program would be about 1.5% of GDP with most of the funds coming from increased economic growth.
With oil prices stabilizing in the $60 range, and American shale production once again coming on strong, this type of growth is a lofty goal indeed. Russia would need to improve the business climate and reduce corruption and oligarch control for this to happen say many analysts, something that is not likely under President Putin.