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. Last Updated: 07/27/2016

INSIDE RUSSIA: Don't Worry, The Budget Is Only a Fantasy




I recall last year -- when I thought that numbers written in spreadsheets could actually have some bearing on Russian economics - I was busy harassing different smart people with questions about the federal budget that was about to be passed.


"Quit worrying, Yulia," said industrialist Kakha Bendukidze, who is also one of the finest thinkers on post-socialist economics. "The figures that will be in the budget have far less significance for the economy than do, for example, the size of railroad tariffs in the next year."


This was said so weightily that ever since, the word budget doesn't mean any more to me than a bottle of vodka does to a former alcoholic.


In fact, this comedy repeats itself in Russia each year. The government produces a ton of documents to put out three heavy volumes named "The Budget," Duma deputies spend a few tons of paper on amendments, a protracted battle boils up, people fight for lines under expenditures and figures under income, Duma factions get solid money - even by government standards - in order to vote for heaps of money. And all for what?


Everybody knows the document will have no relationship to reality. Those taxes that will be collected and put in the treasury aren't comprised of the 30 billion or 40 billion rubles that the deputies will "find" in their constituencies, but of such extra-financial factors as the strength or weakness of central authority. A line item in the budget doesn't mean the line will get funded. And the absence of a line in the budget doesn't mean that money won't be spent.


Money transfers to one region will be delayed for months and likely won't ever be received, while other regions will get their money according to the budget. So why this yearly spectacle?


It is obvious why. Because without a budget confirmed by parliament, our country wouldn't get any money from international credit organizations.


We'll forget for a minute that money from the International Monetary Fund is opium for a sick economy and that it seems Russia won't see anymore of this money anytime soon anyway. What is unfathomable is something else - why, for five years, did international financial bureaucrats insist so stubbornly on attaching such significance to a condition so comedic as the Russian budget?


Every year, from September to November, these bureaucrats force the corrupt Russian government to humiliate itself in front of the equally corrupt Russian parliament and make it give money to the Duma communists, all showing the weakness of the central government.


It would be wonderful if such humiliation resulted in a liberal and balanced document. But no. The document always comes in foul and filthy, with line items like "soil improvement" or "government credit guarantees," all of which have a 98 to 100 percent chance of being totally embezzled.


The document has nothing more than historical value and is reminiscent of a broken trough. Even deputies fight over the budget lamely and largely only to shore up a little cash for the elections.


But you can say without a doubt that no one has done more to increase the power of the left-leaning parties than the IMF - which should give us some idea as to the level of strategic thinking practiced by these international financial bureaucrats.


Yulia Latynina writes for Segodnya.