Putin's May Decrees and the 12 "national projects" take shape, but lacunae remain

Putin's May Decrees and the 12
Putin set out a comprehensive plan to transform Russia with his May Decrees in 2018 that contains 12 "national projects" but lacunae and questions remain
By Fabrice Deprez in Kyiv January 24, 2019

Since he was elected for a fourth term in May 2018, Russian president Vladimir Putin has tried to show he was serious about rubbish. The issue has rocked Russian politics for nearly two years now, as exasperated locals in the Moscow region started in the summer of 2017 to protest against toxic vapours emanating from nearby landfills.

In January 2019, Putin announced the creation of a national rubbish monopoly tasked with coordinating investments to modernize waste collection systems across the country. This wasn’t his first stab at the issue however: a year ago, he had already demanded the government to put together a strategy to “eliminate all unauthorized dumps” and create “an integrated system for the treatment of solid municipal waste” as part of the “May Decrees.”

More than 25,000 protestors took to the streets in Arkhangelsk in December 2018 to demonstrate againt a smelly landfill

These decrees are a series of objectives for the next six years, and have been published since 2012, but this time they were divided into 12 “national projects” with the aim of modernizing and revitalizing the Russian economy and society. The details are still being worked out and many questions remain. Many of the “plans” are no more than bullet points and the source of funds for billions of dollars of investment remain vague in many sections.

One key point is that these national projects as they are described in the decree are not actual, specific projects. Rather, the decree sets up a list of priority sectors in which investment should be made (demography, healthcare, education, living conditions, ecology, roads, labour productivity, science, digital economy, culture, small business and international cooperation) but doesn’t specify what exactly should be done or how much money should be invested (a recap of the 12 national projects as they appear in the May decree is included at the end of this article).

The wording of the decree did show a shift in the government’s priorities, from social policies and the military in 2012 to infrastructure, healthcare and digital issues in 2018. Some national projects such as labour productivity or small businesses were not mentioned in the 2012 decrees, but the most striking difference is probably the fact that any mention of the military or the defence sector are entirely absent from the May 2018 Decree. (There’s a single exception, a reference to the military-industrial complex in the “ecology” section: “improving the quality of drinking water through the modernization of water supply systems using water treatment technologies, including technologies developed by organizations of the military-industrial complex.”)

Passport to prosperity

Starting in September, ministries started publishing “passports” for each of the 12 national projects detailing the financing as well as the actual tasks (along with their completion date) for each section. It’s on this passport that the first mention of a “federal waste operator” appeared, as the idea was absent from the initial May Decree. Financing was, during the summer, a hotly negotiated topic: in late September, RBC reported that the budget for the “ecology” national project had jumped from RUB1.5 to RUB6.4 trillion, though the published version of the passport brought it down to RUB4 trillion ($60.7bn).

The publication of the passports provided much-needed details to projects which, in the May Decrees, remained exceedingly vague: the “healthcare” national project is for example one of the longest in the decree and includes ambitious targets such as decreasing infant mortality to 4.5 per 1,000 births (it is currently sitting at 6.5 – the US is at 5.7) or decreasing the mortality rate of the working population to 350 per 100,000 people (from 477 in 2017). But the tasks set out to achieve these objectives were closer to a wish list than an actual plan, with bullet points such as “introduction of innovative medical technologies,” “formation of a system to protect patients’ rights” or “development of a network of medical research centres.”

The passport, by contrast, divides the national project into eight sub-projects, giving detailed tasks for each of them as well as completion dates. The sub-section “development of the primary health care system” is divided into 35 points with specific provisions such as “replacement of 1,200 worn out healthcare centres and ambulance stations” or “construction of no less than 78 helicopter landing platforms for medical organizations.” The total budget for the healthcare national project is, according to the passport, RUB2.2 trillion ($33.4bn) to be spent between 2019 and 2024.

On a more anecdotal note, the size of these passports also give a good idea of the state’s priorities: with 90 pages, the document for the “digital economy” national project stands way above most other projects (usually between 35 and 50 pages long).

Dancing digits

Despite these additional details, doubts persist over the feasibility of the projects as well as their relevance: head of the Audit Chamber Alexey Kudrin criticized the national projects in January, saying he “had not seen” the final version and the current projects were mostly “numbers and indicators dancing.” Kudrin also claimed the national projects would not be enough to achieve growth rates that would put Russia among the top 5 of the world’s biggest economies. For this, “institutional and structural steps” are needed, according to him. The former Finance minister has long lobbied for major structural reforms, including in sensitive areas such as an overhaul of the justice system and renewed anticorruption drive, to improve the business climate and kickstart economic growth.

A month earlier, Kudrin raised more specific concerns about the “ecology” national project, noting that “more than 80%” of the project’s financing” was based on extra-budgetary funds, while there was still no clear understanding of how the funds would be raised.

Financing will likely remain the key issue for the projects’ completion. Existing state programs are already being updated to fit with the national projects, the government announced in early January: the state program "Employment Assistance,” which was started in 2014, will, for example, be amended to include the cost of additional formation for workers close to the retirement age who face threats of dismissal, one of the provision of the “employment” national project. The Economy ministry’s “Economic Development and Innovation Economy” program will also be changed in order to deal with four national projects: “Small Businesses”, “Digital Economy”, “Demography” and “Labour Productivity”. Overall, Kommersant reports, the financing of these programs should jump from RUB871.4bn to RUB1.6 trillion ($24.3bn) to put them in line with requirements of the national projects.

Despite this, the state will be asking Russia’s big companies to make an effort too: in December, Putin called on businesses to participate in the implementation of the national projects, especially in the labour productivity sphere.

 

DEMOGRAPHY

FIGURES

SELECT QUOTES

Raise the healthy life expectancy to 67 years old

“Support the life of senior citizens and raise their standards of living”

Reach 55% of people who regularly practice sports

“Create a system to motivate citizens to live a healthy lifestyle, including healthy diet and rejection of harmful habits”

Achieve an increase in the total fertility rate to 1.7

 

Achieve a 100% accessibility (by 2021) of preschool education for children under three years of age

 

 

 

 

HEALTHCARE

FIGURES

SELECT QUOTES

Decrease in mortality rates of the working age population (up to 350 cases per 100 thousand population)

“Introduction of innovative medical technologies, including early diagnosis systems and remote monitoring of  patients’ health”

Decrease in mortality from circulatory system diseases (up to 450 cases per 100 thousand population)

“Complete the formation of a network of national medical research centers”

Decrease in mortality from neoplasms, including malignant ones (up to 185 cases per 100 thousand population)

“Improve the mechanism to export medical services”

Decrease in infant mortality (up to 4.5 cases per 1 thousand born children)

 

Increase the volume of exports of medical services by no less than four times compared to 2017

 

 

 

 

 

EDUCATION

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SELECT QUOTES

Ensure the Russian Federation ranks among the 10 leading countries for the quality of its education

“Update contents and improve teaching methods for the subject “Technology””

 

“Modernization of professional education, including through the introduction of adaptive, practice-oriented and flexible educational programs”

 

“Double the number of foreign citizens studying in educational institutions of higher education and scientific organizations and implement measures to employ the best of them in the Russian Federation”

 

 

 

LIVING CONDITIONS AND CITY RESOURCES

FIGURES

SELECT QUOTES

Increase in the volume of housing construction to at least 120 million square meters per year

“Reducing the administrative burden on developers and improving the regulatory framework”

30% increase of the urban environment quality index

“Creation of mechanisms for the development of a comfortable urban environment and the integrated development of cities”

 

“Creation of mechanisms for the relocation of citizens from housing unsuitable for residence”

 

 

 

ECOLOGY

FIGURES

SELECT QUOTES

Elimination of all unauthorized dumps found on January 1, 2018 within cities

“Creation of an integrated system for the treatment of solid municipal waste, including the elimination of landfills and the recultivation of the territories in which they are located, the creation of conditions for the recycling of all production and consumption wastes prohibited for disposal”

20% reduction of the total amount of pollutant emissions into the air in the most polluted cities

 

“Creation and effective functioning in all subjects of the Russian Federation of a public control system aimed at identifying and eliminating unauthorized dumps”

Increase in the area of specially protected natural territories by 5 million hectares

“Ecological rehabilitation of water bodies, including a project aimed at reducing by three times the proportion of polluted wastewater discharged into the Volga River, the sustainable functioning of the Lower Volga water complex and the preservation of the ecosystem of the Volga-Akhtuba floodplain”

Creation of at least 24 new specially protected natural areas

“Creation of infrastructure for ecological tourism in national parks”

 

 

 

ROADS

FIGURES

SELECT QUOTES

Decrease in mortality due to road accidents by 3.5 times compared with 2017 - to a level not exceeding four people per 100 thousand population

“Introduction of new technical requirements and standards for the arrangement of roads, including on the basis of digital technologies to eliminate places where road traffic accidents are concentrated”

Increase in the share of regional roads that meet regulatory requirements in their total length of at least 50 percent

“Introduction of automated technologies of traffic management and control of traffic rules”

Decrease in the number of hazardous areas on the road network by half compared with 2017

“Implementation of a publicly accessible information system to monitor the use of road funds at all levels”

 

 

 

LABOR PRODUCTIVITY AND EMPLOYMENT SUPPORT

FIGURES

SELECT QUOTES

5% growth (at least) of labor productivity in medium and large enterprises

“Reduction of regulatory and administrative constraints that impede productivity growth”

Annual involvement of at least 10 subjects of the Russian Federation in the implementation of this national program

“Introduction of advanced managerial, organizational and technological techniques to increase labor productivity and modernize fixed assets, including through the provision of tax preferences”

Involvement in this national program of at least 10 thousand medium and large enterprises not part of the primary sector

 

 

 

 

SCIENCE

FIGURES

SELECT QUOTES

Ensure the presence of the Russian Federation among the world’s five leading countries engaged in research and development

“Ensure the attractiveness of working in the Russian Federation for Russian and foreign leading scientists and young promising researchers”

Update at least 50% of the equipment used in scientific research

 

Creation of at least 15 world-class research and educational centres

 

 

 

 

DIGITAL ECONOMY

FIGURES

SELECT QUOTES

3x spending increase on the development of the digital economy (by share of the GDP)

“Creation of a sustainable and secure information and telecommunications infrastructure for high-speed transmission”

 

“Use of primarily domestic software by government agencies, local governments and organizations”

 

 

 

CULTURE

FIGURES

SELECT QUOTES

Creation of virtual concert halls in at least 500 Russian cities

“Strengthening the Russian civic identity based on the spiritual, moral and cultural values of the peoples of the Russian Federation”

 

“Create the conditions for showing national films in cinema halls located in settlements with a population of up to 500 thousand people”

 

“Promoting talented youth in the field of musical art, including through the creation of a national youth symphony orchestra”

 

 

 

SMALL BUSINESSES

FIGURES

SELECT QUOTES

Reach 25 million people employed in small and medium enterprises, including individual entrepreneurs

“providing favourable conditions for the activities of self-employed citizens through the creation of a new tax regime with automatic transfer of information about sales to the tax authorities and exemption from the obligation to report”

Reach at least 10% of exports in the non-primary sectors from small and medium-sized businesses

“Creation of a digital platform focused on supporting the production and sales activities of small and medium-sized businesses, including individual entrepreneurs”

 

“Simplification of access to concessional financing, including the annual increase in the volume of concessional loans issued to small and medium-sized businesses”

 

 

 

INTERNATIONAL COOPERATION AND EXPORTS

FIGURES

SELECT QUOTES

Reach 20% of goods and services exported from the manufacturing industry, agriculture and service sector

“Reduction of administrative procedures and barriers for international trade, including the abolition of excess requirements for export licensing and currency control, and organizing (by 2021) a single-windows system

Exports (in value terms) of non-primary non-energy goods in the amount of $ 250 billion a year, including engineering products - $ 50 billion a year and products of the agro-industrial complex - $ 45 billion a year, as well as volume exports of services in the amount of $ 100 billion per year;

“Elimination of logistical restrictions on the export of goods using rail, road and sea transport, as well as the construction (modernization) of checkpoints across the state border of the Russian Federation”

1,5x increase of the volume of trade between the member states of the Union

“Completion of a common market Union for goods, services, capital and labor within the framework of the Eurasian Economic, including the final elimination of barriers, restrictions and the abolition of exemptions in economic cooperation”

 

 

 

 

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