INTERVIEW: Kudrin puts Russian budget theft at 2–3 bln rbl/year

MOSCOW, Jan 14 (PRIME) -- Maximum two to three billion rubles are stolen from the Russian federal budget annually, Audit Chamber Director Alexei Kudrin told PRIME in an interview released on Tuesday.

“Concerning criminal cases, 2–3 billion rubles per year is the maximum, usually it’s even less,” Kudrin said, adding that spending violations is estimated at hundreds of billion rubles per year. “For instance, we’ve detected 804 billion rubles of such violations in 2019. But about a third of them are accounting errors. They are corrected at the time of checks. A third is violation of procurement proceedings which are not criminally liable.”

The official said that the Audit Chamber will refocus from spending breaches to systemic financing problems, or raise the share of strategic audit.

The Audit Chamber estimates unspent budget funds at 1.115 trillion rubles in 2019. “Events and projects were to be financed with the money, the subsidies to the companies they did not get. The money piled more than last year by the end of the year: 4 trillion rubles had to be spent in the last three weeks of December. This is an extraordinary amount,” he said.

The national projects aimed at economic development can only have a local effect, he said. “Concerning the national projects system of management, it is mired in red tape, I think. Look, the measures and the money of national projects are a part of state programs that have different tasks and goals. It turns out that a ministry or a deputy of the prime minister responsible for the state programs has more goals than the national projects set. The focus gets diluted,” he said.

Corruption remains at trillions of rubles annually, Kudrin said. “I am referring to the general studies, they say that corruption has not fallen so far … We would like to have the authority to use the methods which would allow us to prove or deny corruption or at least prepare more detailed materials for the law enforcement authorities. We are elaborating the methods, we have ideas,” he said.

Kudrin said that the main problems limiting economic growth are a falling number of working people, low labor productiveness and people’s income.

“Our economy faces the challenges or trends which reduce the growth rate today. For instance, the number of working people is declining, this factor will take 0.2 percentage points and more off the growth of the gross domestic product (GDP) in the years to come,” Kudrin said.

“Our companies do not think that a constant upgrade of the product range is crucial. As it turns out, 90% of companies in the country offer no innovative products. I think that a constant upgrade and reestablishment of themselves in the most competitive areas is a life-or-death issue for a company,” he said.

He added that the companies need incentives, a better business climate and competition in the economy to get rid of the problem.

“Domestic demand will not ensure a 5% growth of the GDP, we must focus on the foreign markets and raise production with the help of exports,” he said.

Russia’s GDP growth will be smaller than the Economic Development Ministry’s forecast of 1.7% in 2020, reaching 1.5% or less.

“I think growth will again be a bit lower than estimated by the government in 2020, about 1.5% or even less. The government reduced the forecast for 2020 to 1.7%, albeit it was initially thought that it will be 2%. I mean, the rate remains low,” Kudrin said.

According to the official, the GDP rise in 2019 will barely exceed 1%.

Kudrin thinks that the 4% inflation target can be reduced in two–three years. “I think there is a trend of deceleration of inflation in the next year or two. As I said, we will have to switch to a different inflation target some time. Not now but, say, in two to three years. This requires a thorough analysis, we need to change step by step,” he said.

Kudrin said that the Audit Chamber will check the effectiveness of all tax incentives in the oil and gas sector of Russia in 2020. It has also included financial and economic activities of state oil and gas holding Rosneftegaz, and Gazprom’s development plan into the 2020 checks plan and has already started checks at state industrial corporation Rostec.

“The checks of Rostec began already in December. We will start a check of financial and economic activities of Rosneftegaz for the last three years in February and we want to complete it in mid-summer. We will start analysis of Gazprom’s development program in February and will complete it until the end of the year.”

Kudrin supports passing of the central bank’s stake in Sberbank to the government. “It was even initially stipulated in legislation that state ownership in Sberbank by the central bank was temporary, even the deadlines were set but later cancelled. That’s why I see taking Sberbank out of central bank’s ownership and transferring it to the government as a right thing,” he said.

Extension of the use of the golden share to retain government control over large companies after the sale of the state interest would reduce effect of privatization, meaning the instrument must be used only in exceptional circumstances, Kudrin said.

The official also said that the mandate of Russian parliament must be broadened. “Of course, the entire system of the authority requires improvement, including the role of parliament. I think that we need to raise the authority of parliament in principle.”

He added that a limit on the number of presidential terms to be served to two in a lifetime is rational.

(60.9474– U.S. $1)

End