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Mosnews.com
www.mosnews.com
August 23, 2004
Russian Government to Approve Putin-Friendly Budget

The state budget for 2005 has to be directed at the realization of the tasks outlined earlier by the Russian President Vladimir Putin, namely the doubling of GDP and the fight against poverty. This statement was made by Prime Minister Mikhail Fradkov at the opening of a government meeting dedicated to the draft budget.

Fradkov also stressed that “in 2005 the role of the stabilization fund has to change. From a purely accumulating instrument it has to become an instrument of budgetary and economic policies.” Such a statement contradicts the numerous pieces of advice from Western economists, who have asked the government not to use the money from the stabilization fund, for fear of inflation spinning out of control.

The draft budget that is being considered by the Cabinet provides for a 38-percent growth of overall state expenditures and for a 28-percent growth of defense expenditures. This information was given to members of the government by Finance Minister Alexei Kudrin. According to Kudrin, overall state expenditures include all kinds of expenses that guarantee the functioning of the state, of the president and also include international and humanitarian aid.

According to Kudrin, “in 2005 [the government] plans to spend more than [the budget] will earn”. In order to preserve a budgetary surplus, the authorities will use more than 100 billion rubles ($3.33 billion) from the stabilization fund and this year’s budgetary surplus funds.