Support The Moscow Times!

Putin Says Spending From Russia's Sovereign Fund Won't Be Raised

Russian President Vladimir Putin attends the all-Russian youth forum Seliger, held in Tver region, Russia.

Russia cannot spend more of the $83 billion parked in its National Welfare Fund, or NWF, President Vladimir Putin said Monday, after the government recently raised the cap on how much of the fund can be used for domestic investments.

Spending pressure on the government has increased as a result of the Ukraine crisis, which has led several Russian companies to request state finance to compensate for the closure of Western capital markets.

The NWF, a fiscal reserve financed from oil taxes, has become a prime target for lobbyists, notably since Russia has earmarked 60 percent of the fund for internal investments, particularly infrastructure projects.

Putin indicated no objection to such lobbying.

"If someone thinks that the funds earmarked from the NWF need to be directed toward other goals, in particular … goals for creating [geographical] territories for priority development, then by all means," he said, in comments quoted by Interfax.

"But I can say at once that we cannot now increase expenditures from the NWF."

Putin was speaking at a regional development meeting in the Far East, where a dispute arose between Russian Railways and the Far East Development Ministry over which projects should have priority.

Russia recently raised the cap on domestic investments from 40 percent of the fund, leading to concerns the Kremlin is taking risks with fiscal reserves intended to provide future support for an overstretched pension system.

Last month Russia's largest oil company Rosneft asked the government for a $40 billion cash injection, to be financed from the NWF, to help it weather Western sanctions imposed in response to the Ukraine crisis.

The economic development minister later said that Russia may provide some state support for Rosneft but significantly less than the amount asked for.

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

paiment methods
Not ready to support today?
Remind me later.

Read more