Alexander Deryugin, Researcher of the Budget Policy Department of the Gaidar Institute shared his opinion with “Davydov.Index” on the budget expenditures prioritizing methods developed by the RF Ministry of Economic Development.

The RF Ministry of Economic Development has developed the methods of prioritizing budget expenditures. It is expected to apply them to the existing government programs and new projects. According to Maksim Reshetnikov, Head of the Agency, the new methods will help determine where money can be invested more effectively.

“On one side, it is commendable that the Agency engages in formalization of the procedure for identifying priority projects. It is correct. Certainly, it is good when collegial decisions are made, but when some frameworks are set fr om the above – in case of the President's executive orders or social and economic development concepts or development programs – the choice of the project should be based on them. No doubt, it is the right time for the development of such a mechanism. On the other side, it is not the time for formalized things to be applied. And I say that as an advocate of formalized methods of distribution,” Alexander Deryugin notes.

“When it concerns the budget and budget policy priorities in a situation wh ere the Russian economy is not duly mobilized yet, decisions should be taken as promptly as possible. If you remember a slogan of the Great Patriotic War: “Everything for the front and everything for the victory!”, it may sound quite dramatic, but this particular approach should be adopted now and put on the top of the agenda because there are no other priorities. I agree it is important to develop education and healthcare; no one denies that. But we have currently other priorities to deal with. The question is: either we or not we. In case of ‘not we’, no priority projects will be needed because other projects will be run by ‘not we’ and not in accordance with our scenario. So, it is success that a priority identification mechanism has been established,” Alexander Deryugin specifies.

Alexander Deryugin notes that it is important to build such a management system where decisions can be taken promptly. They may be subjective and not that formalized as the RF Ministry of Economic Development expects. But if decision-making is slow (and it is still as such), it will be worse, Alexander Deryugin says.

“At times like these, the management system should be rigid, centralized, prompt and very flexible. The Agency’s elaboration can be applied in more peaceful times. There is no time now for formalized procedures because they require more time and cannot be implemented promptly,” Alexander Deryugin notes.

“Any formalized procedure suggests evaluation of economic after-effects. To assess them, an economic model is needed. Who can offer us an economic model operating in the current environment? All models built now or earlier are based on historical data and indices and they do not work because indicators are changing every day. Economic after-effects assessment models will not be working for these reasons, either. In this environment, the speed of decision-making matters. Delays may cost too much. For example, we did not work actively to develop drones and anti-drone systems, it was a serious miscalculation. We have to reorientate to solve these issues now and carry on this way. It is fine that the RF Ministry of Economic Development can test simultaneously the development of formalized approaches, but introduction of such mechanisms will not be effective,” Alexander Deryugin says.

The period of numerous interrelated crises has begun, says Alexander Deryugin. The main objective is to enhance resilience to global shocks and challenges without delay. All decisions should be taken promptly depending on the current situation. “We live at a time when long-term concepts written in the past decade should be put on a shelf. At the moment, we must solve quickly and efficiently current and mid-term issues in order to get smoothly out of this situation,” Alexander Deryugin summed it up.