Forecast International,
NEWTOWN: Speaking at a conference on state support of Russia's rapidly faltering defense-industrial complex, Prime Minister Vladimir Putin extolled the extent of government assistance being provided to the defense sector and attempted to outline the outcome such assistance programs will have. Chief among these proposals was Putin's reiteration that expenditures on procurement through 2011 will reach Rub4 trillion, a development which is intended to serve as a much needed stimulus to a sector in drastic need of capital and revitalization.
“Major plans for rearming the armed forces have been formulated for the long term. In 2009 over 1 trillion rubles is to be spent on the defense contract. The overall amount of budget spending for these purposes by 2011 is to reach 4 trillion rubles,” Putin said, adding that, “Participation in the state defense contract will keep our defense enterprises busy and preserve the achieved production volumes even at a time when demand for their civilian products segment may dwindle,”. He said that the key task “is to create conditions for the defense industrial complex to make effective use of the state defense contract funds and other instruments of state support.”
Putin also recalled that the federal budget for 2009-2011 envisaged state guarantees on loans issued to defense industrial enterprises in an amount of up to RUB100 billion. “Another RUB50 billion is to be disbursed to subsidize interest rates, fund bankruptcy prevention measures and investments into fixed assets,” he added.
The latest amendments to the Tax Code eased tax debt rescheduling procedures and the issue of investment tax credits.
“Over the past few months commercial banks received some tangible commercial funds at the expense of the national welfare fund and the resources of the Central Bank,” Putin said. “It is necessary to look into whether the provided liquidity reaches the enterprises and how acceptable to the defense industrial enterprises the terms of lending the banks offer are.”
Noting that some countries are devising special measures to support the defense industrial complex, Putin said “Let us give thought to this, too.”
The prime minister declared the government's intention to closely monitor the situation in the real sector of the economy on line. “We shall be evaluating the effectiveness of anti-crisis measures literally every day in order to promptly take extra decisions,” he added.
Putin explained why support for the defense industrial complex was so crucial. “We have about 1,400 enterprises employing about 1.5 million people. Their stable operation is crucial to the social condition of tens of cities and communities,” he said.
