BOFIT Viikkokatsaus / BOFIT Weekly Review 2019/08

As part of his inaugural decrees in May 2018, president Putin set forth twelve national priority areas and a handful of infrastructure modernisation programmes to be implemented during 2019–2024. The twelve national priority areas comprise 69 federal-level projects. The costs of implementing the projects is currently put at 26 trillion rubles or about 4.3 trillion rubles (65 billion dollars) annually, an amount that corresponds to approximately 4.5 % of 2018 GDP. While 70 % of funding is supposed to come from budget, it is still unclear how much of an increase in budget spending, if any, will be required to cover the costs.

The biggest ruble spending will go to implementation of infrastructure, road and demography programs. Each federal-level project in the programme has its own detailed set of goals. Often there are hundreds of benchmarks for hitting these goals. Some project targets are quite simplistic (e.g. the average housing loan interest rate will be 7.9 % in 2024), while some are expansive and general (e.g. the share of persons younger than 40 among academic researchers will grow). The mass of specific performance criteria for the wide-ranging projects creates a benchmark jungle that is difficult to oversee and possibly counterproductive to project implementation.

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