Russian Federation: Toward Medium-Term Viability

by World Bank Group (Contributor)

Russia's program of economic reform has achieved significant price controls have been broadly removed, privatization has shifted two-thirds of enterprises to private ownership, and the economy is gradually becoming integrated with world markets. However, the transformation process has been compromised by inadequate attention to two critical elements of the reform sustained macroeconomic stabilization and institutional strengthening to support the market system. The focus of this report is on fiscal how to reduce the public deficit while restructuring expenditures to be more efficient and to protect the disadvantaged. Reduction of the fiscal deficit will be essential to achieving stabilization and restoring growth. To keep the stabilization program viable the Government will have to maintain tight fiscal discipline and further reduce the deficit to an estimated 1 percent of GDP by 1999, a further requirement is the redefinition of the role of government. In sum, the authors cover five major issues which form the core of this tax reform, intergovernmental financial relations, enterprise support, housing subsidies, and social safety nets.

125 pages, Paperback

Published January 1, 1996

About the author

The World Bank Group (WBG) is a family of five international organizations that make leveraged loans to developing countries. It is the largest and most famous development bank in the world and is an observer at the United Nations Development Group. The bank is based in Washington, D.C. and provided around $61 billion in loans and assistance to "developing" and transition countries in the 2014 fiscal year. The bank's stated mission is to achieve the twin goals of ending extreme poverty and building shared prosperity. Its five organizations are the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID).

The World Bank's (the IBRD and IDA's) activities are focused on developing countries, in fields such as human development (e.g. education, health), agriculture and rural development (e.g. irrigation and rural services), environmental protection (e.g. pollution reduction, establishing and enforcing regulations), infrastructure (e.g. roads, urban regeneration, and electricity), large industrial construction projects, and governance (e.g. anti-corruption, legal institutions development). The IBRD and IDA provide loans at preferential rates to member countries, as well as grants to the poorest countries. Loans or grants for specific projects are often linked to wider policy changes in the sector or the country's economy as a whole. For example, a loan to improve coastal environmental management may be linked to development of new environmental institutions at national and local levels and the implementation of new regulations to limit pollution, or not, such as in the World Bank financed constructions of paper mills along the Rio Uruguay in 2006.