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    Finance Ministry Lashes Out at Far East Mega Spending Plan

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    Russia’s Finance Ministry lashed out on Thursday at a new state program to develop the country’s depressed eastern Siberia and Far East over what it said was “bloated state financing.”

    MOSCOW, March 21 (RIA Novosti) – Russia’s Finance Ministry lashed out on Thursday at a new state program to develop the country’s depressed eastern Siberia and Far East over what it said was “bloated state financing.”

    The program for the accelerated development of the Baikal area and the Russian Far East through 2020 stipulates measures to turn them “into a competitive region with a diversified economy and improve the social and demographic situation in the macro-region’s territory,” the government’s press office said in a statement ahead of the program’s discussion at a Cabinet meeting on Thursday.

    Prime Minister Dmitry Medvedev told the government meeting the state program financing would exceed 10 trillion rubles ($320 billion).

    “We are now agreeing on an overall figure, which is, of course, very large – unprecedentedly large – over 10 trillion rubles,” Medvedev said.

    This amount includes state financing, borrowed funds and private investment, he said, without specifying the proportions of the financing sources.

    Finance Minister Anton Siluanov said the state program for the Far East development needed to be corrected.

    “This primarily concerns the allocation of [state] financial resources. It is stipulated that the federal budget should provide 3.8 trillion rubles, which exceeds by about 14 times the calculated potential that has been defined working on the basis of a draft long-term budget,” Siluanov said.

    The finance minister also criticized the program for the low level of non-government sources of financing for the development of the region’s transport infrastructure.

    “It’s as if transport infrastructure is not a priority and there are no projects in this area in which business could participate,” Siluanov said.

    The program’s proposals on tax preferences require considerably more funds than those agreed with the government and the president, the finance minister said. The program envisages additional preferences for VAT, profit and property tax payments.

    President Vladimir Putin announced plans in late 2012 to offer a preferential tax regime for fledgling companies in the Russian Far East and the Trans-Baikal area to spur the region’s economic, social and demographic development and promote value-added industries.

     

    Tags:
    Far East, Russia’s Finance Ministry, Anton Siluanov, Dmitry Medvedev, Baikal, Siberia, Vladimir Putin
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