DEVELOPMENT: Doubts Rise Over New Money for Russians

By Kester Kenn Klomegah Reprint | | Print |

Kester Kenn Klomegah

MOSCOW, Sep 30 2005 (IPS) - On the face of it the Russian government’s promise to spend new oil riches on social needs sounds good. But many are asking how long this money will last, and how effective it can be.

The Russian cabinet has earmarked 4 billion dollars in next year’s federal budget to support and improve education, healthcare, housing and agriculture as part of a short-term development programme. No doubt it also has an eye on winning public support ahead of parliamentary and presidential elections in 2007-8.

Ministers and presidential aides will oversee schemes to be launched by the new Council for Priority National Projects, President Vladimir Putin told reporters. Putin said he would take personal control of such projects because “financial and administrative resources need to be focused on these priority tasks,” and because “otherwise, everything will go down the drain.” Presidential control will also prevent lobbying, he said.

“This programme has been intended for implementation for many years and is expected to turn what we traditionally call the social sphere into the main economic lever,” presidential aide Igor Shuvalov said on Russian TV Channel One. “This sphere will create economic incentives for the country’s development.”

Shuvalov said he hopes that “in a year people will take mortgage loans more often, more housing will be put into service, and the housing utility system will start to change.” Doctors will “work differently” and “educational establishments will also work differently and all this will continue to change with every passing year.”

Putin’s move has won cautious support among supporters of social policy initiatives. Some say many of the government’s ideas look great on paper, but should be properly implemented.

While the ambitious plans could see the president benefiting from the huge windfall for Russia from surging world oil prices, new money could be lost through deep-seated corruption and inefficiency, they say.

“Without doubt the President’s social policy initiatives and the government’s social reform plans have not effectively integrated in the previous years, and this is the first major attempt to seriously mobilise resources for social development projects,” state duma social politics committee deputy chairman Vladimir Aleksevich Vasileyev told IPS.

There were reasons for this, he said. “Now that the elections are due soon, drastic measures are being set out in the social sphere apparently to showcase the government’s conscious attempts at solving multiple social problems of the electorate, and improve socio-economic growth in the country.”

But he said the measures Putin set out seem far narrower than the package of measures needed for full-scale transformation of the social sphere.

“The social reforms are now shifting into a more politicised phase, and the president’s initiative strategically comes as demands grow from politicians and the public for the government to pursue more social policies,” former education minister and now president of the Russian People’s Friendship University, Prof. Vladimir Fillipov told IPS.

He said realisation of the social programme largely depends on formulation of appropriate instructions to regional governors and state institutions, and strict monitoring of performance.

“I think it might even be possible for the state duma to make some amendments to current legislation on education, healthcare, housing and agriculture, setting out a legal framework within the development programme for it to be implemented and monitored,” Fillipov said.

Many share such concerns. Moscow Mayor Yury Luzhkov said in a statement he was “deeply concerned about decisions being made at the state level, and by initiatives to reorganise the system of healthcare, education and science being proposed by some ministers.”

He said the government has failed to support the real socio-economic sector. “For the past 15 years, the government has been pursuing a policy that might be described this way: struggle for survival on your own, and we’ll go on raising obstacles for you,” Luzhkov said.

If the government does not get it right, Russia “will turn into a mere third world country, and then we’ll simply be wiped out,” he said.

A United Nations Development Programme (UNDP) report earlier this month categorised Russia as only among the “medium human development” countries.

“Russia is making steady progress in the fight against widespread poverty, but the country’s poor need better access to public services like healthcare and education,” the UNDP Moscow office representative told IPS.