OREANDA-NEWS. May 20, 2010. Alteration of priorities of regional budgets in 2010 comparing to 2009 is the evidence of considerable risks of crisis transferring to chronic phase. This conclusion was made public by Igor Nikolaev, Director of FBK Strategic Analysis Department, while delivering a report Priorities of Regional Budgets-2010 at regular meeting of FBK Economic Club, reported the press-centre of FBK.

According to the expert, cumulative expenses of regional budgets in 2010 are reduced by 10,6% comparing to the previous year. Meanwhile, though it has not been declared, priorities of budget policy of the regions are also seriously changing. By more than one-third (by 39,8%) financing in the line “General State Questions” is increasing, which is conditioned by necessity to service the state debt. However expenses on “National Economy” are plummeting– by 33,3%.

“Alteration of priorities of regional budgets in 2010 comparing to 2009 is the evidence of considerable risks of crisis transferring to chronic phase: rocketing of debt burden along with simultaneous considerable reduction of expenses with potentially the most anti-crisis effect (on national economy)”, Igor Nikolaev noted. According to him, the same is evidenced by forced reduction of a part of social expenses (on social policy, healthcare, physical culture and sport). At the same time, it is stated about increased social liabilities at the federal level.

Considerable (by 18,8%) reduction of expenses on housing and community amenities causes particular anxiety of FBK experts . While the matter is not only poor present condition of public utilities: “To invigorate economy, first of all, it’s necessary to increase expenses of regional budgets on national economy and housing and community amenities”, concluded Igor Nikolaev.

“There is no general regional policy in Russia, each region lives according to its own rules of the game, it chooses priorities itself and in its own way responds to crisis”, noted Dmitry Oreshkin, Lead Research Officer of The Institute of Geography of Russian Academy of Sciences. According to him, FBK report provides reach basis for further analysis. So, there can be envisaged two groups of regions: middle ones, which are in the wake of federal policy and the ones where authorities, understanding complexity of situation, are trying to overcome negative course of developments through choosing principally different priorities.

In opinion of Dmitry Oreshkin “regions should get more independency, which is already happening de facto”. “They should independently earn, through increasing tax burden inclusively and decide how much should be deducted to the Center”, the expert noted.