Photo: Maxim Kimerling / “Kommersant”
The Ministry of Finance of Russia develops the rules for selection of projects to be funded with funds from the national welfare Fund (NWF). About this newspaper “Izvestia” with reference to the representative of the Ministry of Finance.
According to him, the selection will be invalid tailor-made solutions. It is also necessary that projects provide “transparency” and contributed to the reduction of Russia’s dependence on oil. The Ministry reported that first preference will be given to projects of high liquidity (those of which can be quickly out) because the money from the Fund may be required to perform budgetary obligations. However, over time, preference in the selection of projects will shift towards more lucrative.
The head of the chamber Alexei Kudrin believes that the investment of the Fund’s assets in Russian projects may increase the volatility of the ruble and the impact on inflation. He noted that now for investment are selected to be very reliable foreign assets verified ratings and evaluations. The Russian equivalent of such assets can be blue chips (stocks of large, liquid and reliable companies with stable rates of return), however, “is not always interested in government.” To avoid negative impact on the ruble, the head of the accounting chamber proposed to increase the cut-off price laid down in the budget rule, from 40 to 45 dollars per barrel.
“You can raise the level by about five dollars to invest in public infrastructure Federal and regional level,” he said. Should also consider investment in human capital, particularly in education and health.
The national welfare Fund, Russia’s sovereign wealth Fund, which receives a windfall from the sale of oil at a price higher by 42.4 per barrel. Funds will be used to invest in the internal return of the project after the liquid part of the Fund will reach seven percent of GDP. This is expected to happen in 2020.
Video, photo All from Russia.