13.11.08

On November 7, Prime Minister Vladimir Putin approved an action plan listing 55 measures for helping the Russian economy overcome the consequences of the global financial crisis. Its maximal objective is to get the real sector and the financial sector back on their feet within five months.

The state won't run out of money for assisting companies and banks, but neither should they expect its generosity to be limitless. One of the first points in the Putin Plan entails strict oversight for the spending of all money distributed to banks and companies.

Who should get state aid, and how much? Recommendations on that score will be developed this month. But it has already been decided to prioritize loans for the auto industry, agricultural machine-building, airlines, and housing construction. In order to ensure that banks actually use the state's money to assist companies, rather than converting it to foreign currency, a special representative from the Bank of Russia will be assigned to each credit organization.

Buy Russian-made: that's supposed to be the guiding principle for all federal, regional, and municipal government bodies, along with state corporations and natural monopolies. Russian producers will also get pricing preferences when state orders are placed: 5-25%, effective to the end of 2010.

All kinds of incentives will be offered to exporter companies. The government has allowed for the possibility of adjusting customs duties.

The Putin Plan promises special support for the defense sector. For example, it proposes that defense sector companies should issue additional shares and bonds, "to be purchased by authorized organizations." In other words, the authorities are prepared to do all in their power to prevent foreign creditors gaining control of strategic industrial enterprises. But that's not all. The defense sector is promised an increase in investment loans, and subsidies to cover interest payments. If required, money will also be provided for current operations - so that not a single defense sector enterprise will go bankrupt.

Russia's housing market has been hit hard by the crisis. This sector of the economy gets special attention in the Putin Plan. In order to fulfill its social obligations, the state will buy apartments in completed apartment buildings in 2008-09. Incomplete apartment buildings will also be purchased, but only on the condition that they are completed within six months of a state contract being signed.

The Putin Plan allows for the possibility of increasing the capitalization of RosSelkhozBank and RosAgroLeasing next year, at the state's expense. In other words, farmers will gain additional opportunities to lease the hardware they need or buy it on credit.

The Healthcare and Social Development Ministry has been instructed to organize a campaign to monitor rising unemployment. "We are prepared to create new jobs," said presidential aide Arkady Dvorkovich, referring to rapid implementation of infrastructure projects.

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Source: "Izvestia"