UPDATE: Finance Minister says higher social spending without reform risky

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MOSCOW, Nov 28 (PRIME) -- Higher spending on education and healthcare would lead to an economic crisis if no structural reforms are undertaken, Finance Minister Anton Siluanov said at a forum on Tuesday.

“We think that we cannot just raise spending without changes in these areas: education, healthcare, social services. There are vast resources, opportunities for such structural changes without raising spending, while if we raise spending, particularly of the oil and gas revenue, we will have risks, we will have the next crisis,” Siluanov said.

He said that the Finance Ministry plans to reduce the number of state support recipients in order to increase efficiency.

“We have a big number of recipients: seven people out of 10 receive state support, although the number of the needy is significantly lower. Concentration of resources ... will create conditions for those who really need to consume more,” the minister said.

Alexei Kudrin, former finance minister and chairman of the Center for Strategic Research board, said that the spending cannot be raised without increasing its efficiency. He said that in the 11 years that he was a finance minister spending on education tripled.

“This means that life became better. But we also accumulated reserves,” he said.

However, now reserves are accumulated while spending is falling.

“In this case I doubt that … spending will suffice for a breakthrough in extending the lifespan, in education,” he said.

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