Message to the Federal Assembly and the New Prime Minister

RUSSIA ENERGY / FINANCE - In Brief 15 Jan 2020 by Marcel Salikhov
Today turned out to be rich in news from Russia.In the afternoon, President Vladimir Putin addressed the Federal Assembly and proposed a series of reforms. The main initiatives are related to changing the structure of political authority in Russia. For the most part, it is about introducing restrictions on the powers of the president. Many political analysts consider this proposal as a sign that V. Putin has begun the process of transfer of power and will not run for a new presidential term in 2024. However, he would like to maintain his status. In this sense, the new proposals are similar to the Kazakhstan reform model, where N. Nazarbayev resigned from his presidency but retained influence.In terms of economic reforms, initiatives are related to the provision of several additional social benefits, primarily related to the stimulating birth of children and support for education. In particular, the terms of child benefits will be extended, maternity capital will increase and will be paid even for the first child. The aim is to increase the birth rate in Russia. The instrument of maternity capital was relatively successful in increasing birth rate so that it will be expanded. The state plans to increase the wages of school teachers and provide free meals in primary school. All proposed measures are social. There are no announcements about increasing defense or security expenditure. These plans mean a slight weakening of fiscal policy and an increase in population incomes due to increased transfers from the budget. The estimated cost of the proposals is about 300-500 billion RUB from the federal budget. The sources of financing will be the accumulated surplus of the budg...

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