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WTO accession, economic development, new prgms-key results of govt work

December 29, 2011, 4:34 UTC+3

The government formed in the early 2000s may be seeing in the New Year for the last time

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MOSCOW, December 29 (Itar-Tass) —— The Russian government finally gave up manual anti-crisis management methods in 2011 and focused on daily work to develop the economy, ensure macroeconomic stability and implement social programmes.

On the whole, the outgoing year passed without major upheavals or challenges for the government but it was not easy. Prime Minister Vladimir Putin laconically summed up the results of the government work as follows: “It took us a lot of effort to get out of the pit where we were thrown by the crisis, but the aftermath of the global economic crisis in the Russian economy was overcome at the end of this year.”

One of the government’s major achievements this year was the completion of the accession talks with the World Trade Organisation even though no one believed only half a year ago that this would be possible. Doubts were expressed not only by experts but even by Minister of Economic Development Elvira Nabiullina and First Deputy Prime Minister Igor Shuvalov.

However the government can hardly relax now that the accession protocol has been signed and has to learn to work in a new environment and think how to protect domestic manufacturers and market. “This is a very big and professional job and it must be done right away, immediately,” Putin said.

A compromise on the size of insurance premiums was one of the stumbling blocks. The increase in payments to off-budget funds from the start of 2011 seriously affected Russian business, particularly small and medium-sized enterprises and high-tech companies.

As a result of the discussion that continued till summer, President Dmitry Medvedev approved a reduction of the maximum rate for mandatory insurance premiums from 34 percent to 30 percent from next year, and to 20 percent for small and medium-sized enterprises.

However the reduction entailed a serious decline in budget revenues. The government could not solve this issue “once and for all”. The law on the reduction of insurance premiums signed by the president on eve of New Year’s Day is a temporary measure for 2012-2013, and the system will have to be readjusted again.

Another headache of the past year was the state defence order. The discussion between the Defence Ministry, the Ministry of Industry and Trade, and industry lasted well into the middle of autumn even though was supposed to end in spring, according to the president’s order. In the coming year the government will have to work out new mechanisms for determining the price of military products. “At stake” are 20 trillion roubles until 2020.

The government formed in the early 2000s may be seeing in the New Year for the last time. The team that has been working for several years virtually unchanged may be overhauled in 2012, which should usher in a new political cycle.

If Putin is elected president in March and incumbent President Medvedev become prime minister, as they said they would at a United Russia congress, the government will certainly face a major overhaul. It has already begun to be reshuffled: Deputy Prime minister and Finance Minister Alexei Kudrin resigned over disagreements with the president in September; Deputy Prime Minister Alexander Zhukov took up a job at the State Duma; and Deputy Prime Minister Sergei Ivanov has become the new Kremlin chief of staff.

On December 27, government chief of staff Vyacheslav Volodin, who had worked in this position for slightly more than a year, was appointed first deputy Kremlin chief of staff. He was replaced by Anton Vaino, who was the prime minister’s protocol chief until then.

Vladislav Surkov, previously a member of the Kremlin administration, has become Putin’s deputy responsible for economic modernisation.

The prime minister and the president have stressed that the focus should be on ensuring coordinated work until a new government is formed after the presidential election, especially since experts expect a new wave of the crisis or recession.

“I hope that in the coming months, and this is going to be a challenging time with a complex political calendar ahead [presidential election], the government will be working as smoothly, carefully and, if you like, scrupulously as it has been doing over the past several years,” the president said.

The prime minister also urged his colleagues to work with ultimate efficiency regardless of political cycles.


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