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25 Dec, 2019 10:27

Putin saved the Russian economy by building national reserve funds – former finance minister

Putin saved the Russian economy by building national reserve funds – former finance minister

The decision by President Vladimir Putin to set up reserve funds ten years ago has saved the Russian economy, says the country’s former finance minister Alexei Kudrin, who now heads the Accounts Chamber.

According to Kudrin, in 2008 when Putin served as Prime Minister, he “supported the creation of the Stabilization Fund, the Reserve Fund, and later the National Wealth Fund, which played a crucial role during 2008-2009 financial crisis.”

The establishment of the funds was of “fundamental importance for saving the economy and social spending."

Kudrin explained: “The salaries did not go down, while pensions even doubled during that crisis period. This is very important.”

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The Russian government has accumulated significant reserves in the Stabilization Fund at the beginning of the financial crisis. In 2008, it was decided to divide the fund into the Reserve and National Wealth funds. It was at the expense of the Reserve Fund that the authorities managed to support the economy and fulfill all the budget obligations. By 2018, the Reserve Fund was completely exhausted.

Currently, the National Wealth Fund is serving as a ‘safety cushion,’ while all the additional oil and gas revenues are accumulated there. According to the Ministry of Finance, the volume of the fund reached 7.9 trillion rubles ($124 billion) as of December 1.

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