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Resource Reliance vs. Macroeconomics

Vladimir Putin, coughing his way through a cold, made his annual address to the State Duma yesterday, underscoring the need to clear Russia’s budget deficit.  It seems one of his measures for doing so is a massive hike in social security:

Russia will however proceed with a planned hike in employer social security contributions to 34% from 26% from next year, a measure staunchly opposed by business lobbies, Putin said, with the money being used to reform the healthcare system. “More than 30 percent of the country’s medical institutions are in a critical state or require a financial overhaul. Therefore, within the next two years, we will assign about 300 billion roubles to bringing the country’s health system to order.

Putin apparently also mentioned responsible macroeconomic policies a number of times, but without economic diversification away from natural resources, it seems the Kremlin can do little beyond waiting for their natural resources to run out (in about 20 years, according to the newly-released and hugely damning UN report, which points out the dangers of Russia’s resource reliance).