ASSESSMENTS

Russia's Priorities Seen in New Draft Budget

Sep 24, 2012 | 11:01 GMT

Russian Budget Meeting
Russian President Vladimir Putin (C) in Sochi on Sept. 18

ALEXEY DRUZHININ/AFP/GettyImages

Summary

After four days in the Kremlin, Russian Prime Minister Dmitri Medvedev and the Cabinet have completed a draft for the federal budget for 2013-2015. The draft will be submitted to Russian President Vladimir Putin and the Duma by Oct. 1. Finance Minister Anton Siluanov called the budget "very difficult" and Medvedev described it as "painful."

These assessments of the budget come from the tough decisions concerning the level of increased spending the Russian government has undertaken every year for the past decade. There are concerns that continuing such dramatic spending increases — based on income from high oil prices — would leave the Russian government vulnerable to future changes in energy revenues. But many in the Kremlin still want to launch a series of spending increases to manage social unrest in the near term and to address long-term national security issues.

The current draft of the budget appears to be conservative in spending (for the Russian government), maintaining current levels of spending overall. The budget does include large cuts that will affect the Russian population and could lead to some backlash, but the increased spending on state security seems to indicate that the Kremlin feels it can crack down if needed. 

The 2013-2015 federal budget includes some cuts that could spur public discontent....

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