There is hardly any justification for reserving large money for regional employment programs in the budget

19 february 2016 | RIA Novosti

Reserving significant amounts of money in the federal budget to support regional employment programs hardly has any justification, especially seeing how the unemployment level in Russia has hardly changed recently, believes the Analytical Center's expert Vladimir Trubin.

Vladimir Trubin
Vladimir Trubin
Department for Social Policy

“The Analytical Center predicts an average annual unemployment level of no more than 5.9-6% in 2016 so reserving significant funds in the federal budget to continue to implement regional employment programs is hardly justified,” Mr. Trubin told RIA Novosti.

On Thursday, Russian Labor Minister Maxim Topilin said that the government was reserving RUB 5.5 billion in the budget to additionally support citizens with unemployment benefits should unemployment increase in 2016. The Analytical Center expert noted that according to the Federal Statistics service the unemployment rate in Russia in late December was 5.8%. On Thursday, the Federal Statistics Service reported that in January the unemployment rate remained at the same level.

“This has to do with excess employment in the Russian economy which we have had for many years. It is a result of low productivity, which is 1.5 times lower than in the developed economies,” the analyst explained. According to him, it is redundant employment in Russia that is the reason why the Russia labor market does not get affected very much by changes in the macroeconomic situation. At the same time, a study conducted by the Analytical Center found that treasury spending on additional measures to reduce tensions in the labor markets in the Russian regions that were included in these programs had no real effect on the positive changes in the parameters of the regional labor markets in 2015.

“In reality, instead of increasing federal spending, we need to try and use the available funds more effectively by improving planning, organization and budget of regional employment programs,” Mr. Trubin concluded.