Russian Officials Fiddle Away Budget of Iceland

Last year, Russian regional authorities wasted 415 billion rubles of budget funds, Vladimir Putin said at a recent meeting of the government. The amount exceeds the annual budget of such a nation as Iceland. The head of the Russian government again urged to cut the official personnel on regional and municipal levels.

"In 2009, the total amount of ineffective and, as a matter of fact, pointless spending of regional and municipal budgets totaled - you know, when there's a little, it seems to be fine: a little here and a little there - but in the country on the whole it made up 415 billion rubles, including in education - 142 billion! Example: this money could be used for raising teachers' salaries by 27 percent or building nearly 400 new schools," Putin said.

About 50 percent of school personnel take administrative positions - this is something that did not exist even during the bureaucratic times of the Soviet era.

"What does that mean? It means that a considerable amount of funds is spent on maintenance rather than on the education process," Putin said.

Beginning with 2011, Russia started practicing new regulations for the system of funding state-financed organizations. Now such organizations receive subsidies for the execution of certain state orders. The previous system of funding will become history on January 1, 2011.

The traditional financial schemes will be preserved for such organizations as military units, penitentiary institutions and mental institutions. A part of budgetary organizations will fund their activities by means of additional paid services, others will become completely commercial.

The appearance of subsidized state orders implies limited funding, which in its turn leads to a limited number of services provided by state-financed organizations. The government believes that such system of funding will make the spending of budgetary funds more efficient.

The excessive quantity of regional and municipal officials implies additional spending to maintain the people working at official positions. The spending has been growing despite the reduction of the official personnel.

"The number of regional and municipal officials was decreased by 4 and 2.5 percent respectively. This is a correct development of the situation, but it is happening slowly. Moreover, the personnel reduction takes place simultaneously with the 6-percent increase of spending on maintaining official services. They cut personnel by 4 percent, but increase the spending by 6 percent. Thus, the ineffective spending on public management made up 83 billion rubles," Putin said.

"You know that housing and public utilities make one of the most painful issues. The deterioration of the communal infrastructure does not decrease - it makes up 60 percent. The share of unprofitable enterprises in the field makes up 39 percent - they are mostly located in the regions, where the reforms of the industry occur slowly. Opinion polls show that the quality of housing and communal services satisfy less than a quarter of all citizens, and you are aware of that," Putin stated.

Anatoly Miranovsky

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Author`s name Dmitry Sudakov