THE CRISIS MANAGEMENT PLAN AND BUDGET MANEUVER 2015

Abstract

The policy documents providing a formal framework for the crisis management plan of the Russian Federation Government and the budgetary maneuver are examined along with the key parameters of the updated federal budget for 2015. Changes in the scenario macroeconomic conditions of budget planning due to the deterioration of the foreign economic and political situation. are analyzed.The primary attention of the financial and economic block of the Government as well as the main resources are directed towards the support of the financial sector and mineral companies with the dominant governmentparticipation. The real sector of the Russian economy is supposed to be content with a declaration of measures to reduce administrative barriers and costs.The author suggests that the choice of expenditure items for sequestration should be determined not only by the short-term efficiency criteria but the long-term development objectives of the country’s economy. However, some government programs may (or even should) envisage the revision and internal re-allocation of resources by subprograms and time schedules. Moreover, to maintain the employment, permanent support must be given to programs aimed at development of labor-intensive industries.Given the lack of effective demand from the private sector, a necessity arises to select a different development scenario that proved its effectiveness in a number of countries that performed an economic miracle - successful development of priority sectors and infrastructure projects based on a significant increase in government spendings. However this is made possible only through a substantial improvement of the government spending efficiency and the tight control over the targeted use of funds.