The Political and Economic Results of September 2014

Abstract

In September 2014, the RF Government approved a draft budget for 2015. In so doing it rejected the idea of increasing taxes and found an intermediate solution for the preservation of the funded component of labor pension without, however, making a final decision as to its future. On the other hand, the approved draft budget is based on a rather optimistic forecast of oil prices – a scenario that can put its actual implementation at risk if oil prices should continue on their downward trend. The current situation implies that inflation and devaluation risks remain high. In September 2014, Russia had her single voting day which went smoothly and brought neither excitement nor surprises. The voter turnout was low, with only one third of registered voters coming to the polling stations (vs. two thirds at the last federal elections). In spite of this lackluster voter activity, United Russia increased its dominance in local elections. September 2014 saw the billionaire businessman Vladimir Evtushenkov placed under house arrest. This development has created a very alarming precedent for big investors, especially bearing in mind the fact that his reputedly money-laundering transactions were carried out by him quite recently – and with the Russian authorities’ knowledge. As regards the situation in Ukraine, there was a relative lull in hostilities, which gives rise to hopes that the conflict may indeed be de-escalated on the basis of the status-quo.