The crisis threatened Russia’s megaprojects. What will happen to them? & Nbsp

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The coronavirus pandemic and the collapse of oil prices plunged the whole world into crisis. In Russia, they also threatened plans for the implementation of national projects. A dying business, falling incomes and rising unemployment are forcing to rethink the strategy and channel funds to support the economy and citizens not in the future, but here and now. The authorities thought about delaying the implementation of national projects for six years – from 2024 to 2030. They do not abandon plans to improve life in the country, but they will have to wait. The increase in terms is in the material “Tapes.ru”.

To the bottom

The Russian economy was in a difficult situation, only this year the GDP may fall by 6.6 percent. The authorities are trying to remain optimistic and hope that the country will be able to cope with the difficulties that have arisen and overcome the crisis with minimal losses.

According to the former deputy chairman of the government Arkady Dvorkovich, who now heads the Skolkovo fund, the most difficult times in the country are just coming. “Optimists think that we are already somewhere at the bottom, and in Europe have already begun to emerge from the crisis. I think we have not reached the bottom, especially in Russia we are only entering the most difficult period of the crisis, ”he said. Dvorkovich repeats the obvious: most of all the blow will be felt by small and medium-sized businesses.
According to the calculations of the associations “Support of Russia” and “Business Russia”, as well as the Chamber of Commerce and Industry (CCI), by the end of summer in Russia will close about one million small and medium-sized businesses, or 15-25 percent of the entire market. About 2.5 million former employees of such enterprises will enter the labor exchange. In total, the quarantine and restrictions imposed because of it cost the business 3.7 trillion rubles, and every day the figure is growing.

The most affected sectors, including catering, hotel business and tourism, are supported by the state. Banks give companies interest-free loans for employees on salaries, and also provide SMEs with the opportunity to arrange credit holidays. In addition, more than 200 thousand scheduled business inspections in 2020 are canceled in the country. By early July, more than 2.3 trillion rubles of debt were restructured.

However, many market players are not enthusiastic about state support. They complain about the large number of reports that need to be submitted to different departments. Moreover, sometimes the same document, but in a different form, is transmitted almost every day. The requirements are going to be mitigated, but the matter has not yet reached concrete actions.

Collateral losses

The collapse of the business entails an increase in unemployment. At the end of June, millions of Russians were left without work because of the coronavirus. The Ministry of Economic Development says that during the pandemic, 15 million people were suspended, 680 thousand of them fell under reductions. Two million citizens officially registered as unemployed. Soon, the number of unemployed may rise to eight million.

According to a recent study by the Rosgosstrakh Life insurance company, the share of Russians with an average monthly income below 15 thousand rubles increased from 38.1 to 44.6 percent. Analysts compared the data at the beginning of the year, when the epidemic in the country had not yet begun, with June figures – the time of the mass lifting of quarantine restrictions. One in five respondents announced a significant drop in income during the pandemic, and one in ten reported a complete loss of earnings.

The Kremlin does not believe these statements, referring to methodological miscalculations. According to official figures, the poverty rate in Russia at the end of 2019 amounted to 12.3 percent – about 18 million citizens received incomes below the subsistence level. Calculations for 2020 are too early to deal with.

New term

The global downturn is jeopardizing the ambitious plans of the Russian authorities. The deadlines for the implementation of national projects can be postponed for six years – until 2030. The initiative with national projects was proposed by Vladimir Putin in 2018, when he once again assumed the presidency.

The national plan included 13 programs: Healthcare, Ecology, Science, Demography, Housing and Urban Environment, Digital Economy, Labor Productivity and Employment Support, Small and Medium Enterprises, “International Cooperation and Export”, “Safe and High-Quality Roads”, “Culture”, “Education”, as well as the “Comprehensive Plan for the Modernization and Expansion of the Main Infrastructure”. It is assumed that until 2024 – by the end of the presidential term – tens of trillions of rubles will be spent on their implementation.

According to a presidential decree, for five years (from 2019 to 2024), the government is tasked with drastically improving the quality of life in the country, as well as bringing Russia to the top five in economic growth. The authorities are also instructed to improve demographics, increase life expectancy, ensure income growth and halve poverty. In general, in terms of development, Russia should enter the top ten leading countries and catch up with Germany. Now that Russia is in a situation that is compared to the 1998 default, such plans seem utopian.

Alexander Miridonov / Kommersant

According to the Ministry of Economic Development, the drop in the Russian economy in 2020 will amount to 4.8 percent, instead of the planned growth of two percent. Also, the country expects a 3.8 percent reduction in real incomes instead of an increase of one and a half.

Against the background of a general recession, the government is considering the possibility of adjusting the deadline for the implementation of programs and their extension. “At the government level, the adjustment of national projects is currently being discussed taking into account the situation in the economy in recent months,” the Ministry of Economic Development says. We are currently discussing the extension to the 2030th project “Small and Medium Enterprises (SMEs) and the support of individual entrepreneurial initiatives”. In addition, in 2021–2022, the financing of national projects is going to be reduced, in particular, it will cost 7 billion rubles less than planned to support small businesses.

One of the national projects, which felt the consequences of the coronavirus more than others, was Digital Economy. The deadlines for major projects have already been violated, including the development of 5G communication networks, the creation of a single state cloud platform, a typical civil servant workstation, a venture fund to support educational projects, and other events on which the achievement of the plan is based. Most likely, the national project is waiting for a reduction in funding. From the project “Information Security” they intend to exclude activities that provided for state support in the amount of 1.6 billion rubles.

Ray of hope

But the six-year plan does not refuse key goals. We are talking about “ensuring economic growth rates above the world and not lower than 3 percent per year by 2024”, maintaining macroeconomic stability, including inflation at the level of no higher than 4 percent, as well as the growth of investment in fixed assets of at least 5 percent by 2024 year. They also want to add two new target indicators to national projects: “ensuring sustainable growth of real incomes of citizens, as well as an increase in the level of pension provision above the level of inflation”.

Authorities have previously recognized that due to COVID-19, some state programs will not be implemented, and free funds will need to be correctly allocated. The Accounts Chamber, in turn, suggested adjusting the performance of national projects, hinting at an extension of the deadlines.
At the same time, they see no reason for the pandemic to fail to implement national projects in general. “On the contrary, they have become more in demand, especially in order to preserve the life and health of our citizens, improve the quality of life,” says Secretary of the Security Council Nikolai Patrushev.

Some programs, on the contrary, are called growth drivers. This applies to the development of the road network and large construction projects. “We will continue to implement large-scale infrastructure projects, such as expanding the capacity of the BAM and the Trans-Siberian Railway, building roads in the south of Russia, including approaches to the Crimean bridge and the Black Sea coast,” Putin said. Large-scale construction projects will revitalize the production of building materials, the automotive market, food delivery and other segments. They also see a plus for the labor market: those who lost their jobs during a pandemic can find work at construction sites.

The number of cases gradually decreases, the restrictions imposed are lifted. But the main task now remains the fight against COVID-19 and its consequences for the economy. The way out of the crisis goes according to the national plan by almost four trillion rubles. It is expected that the domestic economy will be able to return to growth next year. To achieve this result, you need to correctly redistribute funds.

In general, the crisis jeopardizes the implementation of national projects on time, but does not eliminate their need. Billions of rubles have been set for long-playing plans, but this money is needed now: to restore the economy and support citizens. So, most likely, the deadlines for the implementation of national projects will be extended. The danger of the second wave of COVID-19 remains real: there is still no vaccine for the virus. Now urgent problems are more important than ambitious plans that can be postponed until better times.

. (Source: rambler)