Petrodollars will not be allocated for science development

The Russian government does not, thus far, intend to allocate Stabilisation Fund money for the development of science, Prime Minister Mikhail Fradkov said after a meeting of the Russian Academy of Sciences on Tuesday.

"Stabilisation Fund money is not expected to be used in science development. The Fund was created for other purposes," said Mr Fradkov.

However, the premier assured the government would continue increasing allocations for science development and supplying modern equipment.

"There are proposals on tax privileges for science centres," added the premier.

The Stabilisation Fund began to be created early this year on extra revenues from high oil prices.

As of February 1, 2004, the Fund reserves constituted 106,333,600,000 rubles ($1 equals 29 rubles). As of March 1, there were 122,413,600,000 rubles in the fund. On April 1, Fund reserves increased to 142,924,500,000 rubles, while as of May 1 they went further up to 171,299,600,000 rubles.

The Fund is designed to make up for the budget deficit in the event oil prices are lower than $20 per barrel. When 500 billion is accumulated in the Fund, the money will be used for other purposes, to repay Russia's national debt, for example.

According to the finance ministry's preliminary estimates, the Stabilisation Fund will accumulate 280 billion rubles by the end of 2004.