Publication: Monitor Volume: 4 Issue: 116

The head of the Russian Accounting Chamber, Khachim Karmokov, is a sharp critic of the way the government manages the federal budget, for reasons he explained in a recent interview. (Argumenty i Fakty, No. 24, June).

The Chamber, a financial watchdog that answers to the State Duma, has few powers of enforcement, though it is trying to step up cooperation with the Procurator-General’s office to crack down on misuse of public funds. Last year, they ran 475 inspections. Over the past three years, they claim to have uncovered the waste of more than more than 100 trillion old rubles (US$7 billion), of which only four trillion rubles were recovered.

Those figures do not seem very realistic, but more concrete data that Karmokov presented seem plausible. He noted great inconsistency in the disbursement of funds to the regions. Last year, Arkhangelsk Oblast received 50 billion rubles less, and the republic of Karelia 70 billion rubles more, than the federal budget had decreed. In the first quarter of this year, Orenburg Oblast received 4 percent of its annual financing, while Vologda received 45 percent. Federal tax revenues themselves swing alarmingly from month to month–jumping from 21 trillion rubles in November to 45 trillion in December, and falling back to 16 trillion rubles in January (all in old rubles).

Karmokov cast doubt on government’s claims that further cost-cutting can close the budget deficit. The annual deficit will be around 100 billion (new) rubles, a sum that dwarfs planned federal spending on state administration (12 billion rubles), health care (11 billion are allotted for health care), or education (19 billion). The problem is that interest payments on the state debt swallowed 34 percent of spending during the first quarter of the year.