Saturday, August 22, 2015

Kremlin Taking from the Poor and Giving to the Rich, Duma Deputies Say’

Paul Goble

            Staunton, August 22 – Despite the economic crisis, Duma deputies say, the Kremlin is continuing its “Robin Hood in reverse” strategy, taking from the poor and giving to the rich, an approach which was never popular even when the Russian economy was growing but now is highly offensive when it is not.

            On Wednesday, “Nezavisimaya gazeta” reported that the Audit Chamber had found that the finance ministry had handed out more than ten billion dollars in the last year to firms without adequate checks, a figure more than the ministry said it had to cut the indexation of pensions because of budgetary problems (

            As it often does on what it views as a hot political issue, the news agency interviewed six Russian parliamentarians from various political parties on their reactions to this report about government finances and on what they believe needs to be done to correct the situation (

            Anton Ishchenko, an LDPR deputy on the Duma budget and taxation committee, says that “what is happening today with budget investments is explained by the absence of the necessary control and perhaps by the lack of desire for such control to be put in place.” As a result, money is being handed out “corruptly” and no one knows where it is going.

            He adds that his fraction has proposed expanding Duma oversight over the dispersal of funds but “unfortunately, all our proposals” in that regard “have not found any positive response” from the government. Clearly, there are officials prepared to take the last kopeck from pensioners and hand out big money to their friends instead.

            At a time of crisis, Ishchenko continues, “this is simply a challenge to the entire society,” one that can lead to “destabilization” as has happened in Armenia recently. “No one is ensured from such a reaction by the simple people” in Russia. Instead, the government is making the possibility of such an explosion ever greater.

            Nikolay Ryzhkov, a senator from Belgorod and member of the Federation Council’s federalism committee, says that it is a mistake to blame the finance ministry for this: it is simply the executor of what the government as a whole has decided upon. That of course makes the problem bigger rather than smaller because the government is then responsible for this.

            Oksana Dmitriyeva, an SR deputy n the Duma budget and taxes committee, says that as a result of this report, “the mechanism of budgetary investments undoubtedly must be changed” in order that such things not happen again. And she suggests that this will require reopening questions of privatization and investment in such privatized enterprises as well.

            She points out that the system has been broken for a long time. In 2008, for example, “more than half of budget-backed investments were directed” not for real investments but to cover debts or purchase shares, despite what the authorities said. That is not how the country’s economy should be run.

            Vladimir Petrov, a United Russia deputy who serves as first deputy chairman of Federation Council’s budget and financial markets committee, says that budgetary investments are justified but that they should be more carefully controlled than they have been up to now.

            Valery Zubov, an SR Duma deputy on that chamber’s transportation committee, says that what the report shows is that there has taken shape in Russia “a surrogate investment system,” with moneys taken from the population and given to enterprises without any consideration of effectiveness only short-term profit.

            The system is inherently corrupt, he suggests, because “nowhere is the procedure for disbursing money written down.”  The Audit Chamber needs to have its authority expanded so that it can root out such activities. That is all the more the case because “the actions of such a surrogate investment system are a serious destabilizing factor,” especially if they lead to cutbacks in funding for pensions and social needs.

            And Vasily Ikonnikov, a KPRF deputy on the Duma committee for regional policy, says that this problem reflects a broader problem, one that can only be solved by a change in the government as a whole. That is the only way to avoid destabilization: change the government now and step up the fight with corruption.

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