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Kudrin doesn’t see himself in new cabinet

September 25, 2011, 10:04 UTC+3

Russian Finance Minister Alexei Kudrin doesn’t see himself in a new Russian cabinet

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WASHINGTON, September 25 (Itar-Tass) —— Russian Deputy Prime Minister and Finance Minister Alexei Kudrin said late on Saturday he would not work in the government of Dmitry Medvedev if the current president swaps jobs with Prime Minister Vladimir Putin after the 2012 presidential election.

“I don’t see myself in the new government. I believe that differences I have (with Medvedev) will not permit me to join it,” he told reporters in Washington.

Kudrin said the differences relate to substantially increased defense spending and social expenditure.

The differences are so essential that Kudrin will not join the government even if he receives an offer. “I will definitely reject it,” he said.

The finance minister said he opposed increasing the expenditure as it creates additional risks and keeps the national economy dependent on the oil price however it was included into the budgets for 2012-2014 despite his objections.

As for military appropriations, Kudrin listed for guidelines that would considerably rise – defense orders, monetary allowances to servicemen, pensions to retired military, and new technologies for the defense complex. “The four positions increase government spending next year by approximately 1.5 percent of the GDP. As the expenditure will continue to rise in the coming years the growth will equal three percent of the GDP in 2014 against 2011,” he said.

“It is a very substantial growth. I believe it creates additional risks both for the budget and macroeconomics. It will not allow us to decrease the budget deficit even in conditions of high oil prices and will keep us dependent on them,” Kudrin said.

He recalled that before the crisis the budget was balanced at the oil price of 90 dollars per barrel, this year – 109 dollars, and next year – close to 112. “The dependence remains which is very risky for our economy,” the minister warned.

As for the social expenditure, Kudrin said higher pensions will demand additional 0.5 percent of the GDP. As a result the deficit of the Pension Fund will exceed one trillion rubles next year and comprise close to 25 percent of the total spending of the pension system.

“We discussed the decisions. I disagreed with them. Nevertheless they were included into the three-year budget,” he said.

“The new team of Medvedev will have to deal with the problems any way,” Kudrin said.

As for reports that he may be offered a job in the World Bank, Kudrin said “it is too early to speak about it.”

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