Pavel K. Baev has an interesting piece on Asia Times Online about Russia’s budget priorities:

The new budget therefore demanded clearer priorities than just small flat cuts in every department, and the structure of expenditures proves two propositions about Putin’s policy: that he is afraid of the growing discontent within the country and that he has no ideas on revitalizing the economy.

Much spin is put on the social orientation of the budget, but where Gontmakher argued for investing in the quality of human capital while channeling funds into education and healthcare, Putin has opted for various direct payments, including a 50% increase in pensions, aiming at disarming “irresponsible” protesters. It might appear that only cold-hearted economists could argue against helping impoverished pensioners, but in fact the costs of populist measures are very high as investments in infrastructure that create employment and build a foundation for post-crisis modernization are mercilessly cut.