Archive for January 19th, 2015

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Budgetary unintended consequences

January 19, 2015

Following yesterday’s entry relating to the “decentralised” Odessa City budget meeting in a few days time, there is perhaps a need to paint with a slightly broader brush regarding the issue on a national basis before moving on to other (more interesting) subjects.

Directly interconnected with the national budget are 669 local budgets of one form or another.

Of those 669 local budgets, a total of 197 have been submitted to, and subsequently approved by the Ministry of Finance.  They include 10 regional budgets from amongst the 24 regional authorities, 33 of 268 municipal budgets and 66 of 170 public authorities that sit somewhere in amongst the gaps between regional and municipal budgeting.

Almost to 30% of these budgets therefore deemed fit for purpose and deliverable by the Ministry of Finance.  How many, like Odessa City, are yet to be set in stone, and how many were returned to those submitting them as entirely flawed and/or Utopian is currently not clear.

These approvals, despite the fact that everybody with a modicum of intelligence must be expecting a serious rewrite of the national budget submitted under farcical circumstances at the very end of 2014.  Indeed, there is a need to recognise that such a farce maintains the very perception – or reality – that both branches of executive political power, be it president and prime minister/cabinet, are still more than OK with keeping alive the historical tradition of the RADA as a subject of their politics and policies, rather than the object where such politics and policies are debated and informed decisions reached.

Needless to say continued subjugation of the RADA, rather than a venue of genuine debate, will simply bring about severe fault lines from those cracks that are already apparent within the coalition.  Indeed, some may ponder that if it were not for (the increasing) Kremlin aggression in eastern Ukraine and if the coalition were left to its own devices, whether or not the coalition will still be as one by Easter.  It is perhaps fortunate for both Ukrainian President and Prime Minister that The Kremlin is clearly out of ideas and will therefore keep the war in the east hot/warm/tepid in lieu other (realistic from the current Kremlin occupant’s perspective) options, throughout 2015.

To expect any serious and notable change in Kremlin political, economic or military policy in 2015 is to expect too much.  Indeed there seems little chance of any notable changes of policy within the Kremlin as long as the current occupant remains there.  As stated, The Kremlin is out of (acceptable implementable) ideas under the current incumbent.  Perhaps not so under any successor.  Time will tell as it always does.  Regardless, there will be no (chosen) successor, and thus no notable policy shifts, from the Kremlin in 2015.

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However, returning to the regional and municipal budgets now agreed with the Ministry of Finance – and those yet to be – but that are interdependent upon a State budget that will be subject to a serious (IMF) rewrite prior to 15th February when the RADA revisits the 2015 budget, questions may arise as to the reactions to central government amongst the regions, if there is to be a reneging upon what has now been agreed with them.  The Finance Ministry/Cabinet blaming the IMF is not going to help in the absence of having had the political courage to have written a budget that would not have required (the IMF) to rewrite it in the first place – and thus avoided any (as yet) unknown amendments to now agreed regional and municiple budgets.

This avoidable possible cause and effect, may yet lead to some very difficult outcomes within the law of unforeseen consequences.

More haste, less speed.  Less law, more implementation.  Two slogans for the current leadership to ponder perhaps.

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