Minister says less money will go to regions
The international finance crisis is about to hit Russian regions. Finance Minister Aleksey Kudrin yesterday said that Moscow next year will have to cut subsidies to the regions and that the regional administrations should reduce costs and credit obligations.
In a seminar with regional United Russia party officials yesterday, the finance minister requested the regions to cut spending and credit obligations in 2009, newspaper Vedomosti reports. He said that federal allocations today account for 15 percent of the regions’ incomes. That number might be cut next year. Minister Kudrin highlighted that the system of subsidies to the region will in 2009 be made “more complicated”. He also confirmed that Moscow will not anymore help the regions cover increasing salaries of officials. Thus, while federal officials will next year get a 30 percent raise, the salaries of regional officials will depend on the goodwill and capacities of regional administrations. As the international finance crisis aggravates, Russian regions might lose incomes and ask for additional federal funding. That might next year be easier said than done.
