BOFIT Weekly Review 2018/19

Putin's newest May Decree sets out typical government target and task list through 2024



As with Putin's third inauguration in 2012, he laid out on Monday (May 7) a new to-do list for the cabinet during his fourth six-year term. General goals include population growth and rising living standards, including cutting by half the number of Russians living in poverty and improving housing conditions, a rate of economic growth above the global average, technological advancement (e.g. innovation and digitalisation) and a high-productivity export sector. The list mentions nothing regarding foreign or domestic security, foreign policy or the recent years' theme of import substitution.

The government was tasked with creating or modifying national projects and programmes covering twelve sectors. The demography programme will seek to improve the birth rate and ease the entry of mothers to working life. The healthcare project seeks to reduce mortality of working-age individuals and infants, eliminate Russia's healthcare labour shortage, improve access to first aid and define tariffs for care. The education project will seek to improve the quality of general education through the adoption of new teaching methods and modernise vocational training to make it more oriented and flexible to practical demands. The housing and urban environment project is to increase annual home construction volume by 50 % through different financing modes (including a mortgage interest rate ceiling), subsidies for standard construction, reduced regulation on housing construction and efficient land usage for mass construction.

The employment programme has links to child and education policies. Tax incentives and less red tape are to improve labour productivity. The goal of raising productivity by 5 % a year will apply to at least 10,000 mid-sized and large companies operating in basic industries outside the resource extraction sector. The project for small and medium-sized firms and private entrepreneurs seeks strong growth in the numbers of people employed by them through simplified tax reporting, beneficial credit and public procurements. The export development programme seeks to boost Russian exports beyond basic commodities. Measures include reduced regulation, export support, improvements in logistics and border-crossings. The only trading partners mentioned are members of the Eurasian economic union, along with targets for the trade volume within the union and final common market objectives.

R&D spending will rise under the science project. Digital economy's own programme includes rapid spending increases and IT performance & security enhancement based primarily on domestic designs. Digitalisation is also emphasised in various other projects.

The road project seeks e.g. to reduce traffic deaths, and impose heavier punishments for traffic violations. There is a separate agenda for large national traffic corridors and electricity projects. The Decree also has environmental focuses. The project extends to waste handling and waste dumps, air pollution in large industrial centres, drinking water quality, and clean-ups of Russia's various lakes, rivers and shorelines. The culture programme stresses stronger national identity.