Budget Message of the PMR President Vadim Krasnoselsky
Deputies of the Supreme Council, Heads of public authorities and administration!
In accordance with the Constitution, the President addresses the Supreme Council and the Government to highlight the most important issues of the life of the republic.
Today's budget message focuses primarily on issues of our political, economic and social development.
I want to pay special attention to the goals and objectives laid down in the Strategy for the Development of the Pridnestrovian Moldavian Republic until 2026 signed by me in December 2018. Today this is the main strategic planning document that defines the state interests and priorities of the republic for the long term. The strategy orients all of us to:
1) strengthening the independence of the Pridnestrovian Moldavian Republic with focus on gaining international recognition and implementation of the results of the 2006 referendum;
2) continuation of formation of the community "Pridnestrovian people" that includes representatives of various ethnic groups, ethnic groups and based on the preservation and development of languages, cultures, customs and traditions;
3) building socially oriented state with a market form of economy.
Three basic principles are at the heart of these ideological orientations: political stability, economic self-sufficiency and social justice.
Addressing you with the budget message in the context of the work on the draft law “On the republican budget 2020”, I want to set some emphasis today on priorities in this matter.
I am sure that the main goal of planning in the budget process is to draw up a plan and draft possible solutions for the most economical, productive and efficient use of budget funds in the next financial year.
Effective fiscal policy is an indispensable condition for the economy to adapt to modern realities. It intertwines macroeconomic and structural prerequisites for ensuring stable economic growth and improving the well-being of citizens. The combination of flexibility and sustainability of the budget system is a daunting task, especially in the conditions of economic development of Pridnestrovie.
Important rule in the conditions of limited financial resources is that it is necessary to choose the most correct directions of spending budgetary funds in order to achieve the necessary level of efficiency of budget policy implementation in the long term.
The implementation of such a budget strategy of the Pridnestrovian Molda vian Republic will allow evaluating directions of the budget policy with the achieved indicators of balance and stability of the budget system of the republic.
The efficiency of budget implementation, the sustainability of the entire financial and budget system are important components of the well-being of citizens, components of the economic self-sufficiency and political stability of Pridnestrovie.
I am convinced that the political stability of our state is built on the basis of balanced and well-defined foreign and domestic policy. I assign a special role to the economic and social spheres of life of the Pridnestrovian state in the context of the budget message.
Addressing you on the eve of the beginning of work on the draft budget for 2020, today I would like to place some accents and priorities that convey a positive experience in implementing the budget policy of 2017, 2018, and beginning of 2019, which take into account simultaneously the negative phenomena and not so effective solutions. In this regard, I instruct the Government to develop guidelines for designing the budget for the next fiscal year in accordance with the main aspects of this budget message.
Speaking about ensuring economic self-sufficiency as one of the main conditions for sustainability of the entire financial and budget system of Pridnestrovie, I want to emphasize the most important thing that was done - to return stability to the economy after the large-scale crisis of 2015 - 2016. At the end of 2017, thanks to a set of measures taken by state bodies, conditions were created for the restoration of all sectors of the economy. The management decisions of 2018 not only improved the current situation, but also laid the foundation for a more sustainable economic growth.
Thus, in 2018 relative to the level of 2017, in real terms, the gross domestic product grew by 3.6%, industrial output increased by 8.5%, investment increased by 42%, exports of goods increased by 30.3%, import - by 23.6%. Inflation processes slowed down almost twice - to 7%, while the active development of the consumer market continued: retail trade turnover in comparable prices increased by 10.4%.
Saved production, new jobs, timely payment of salaries and pensions, support for socially vulnerable segments of the population are behind the statistics figures.
The priority task facing the state authorities of the republic is to further build up its economic potential in order to carry out timely and full financing of the state’s social obligations.
At the same time, the priority in any decision should be a person, since it is a decent level of citizens' well-being and the creation of a comfortable living environment that are the goal of a socially oriented state, the Pridnestrovian Moldavian Republic.
In this regard, I identify 3 key tasks for the Government and the Supreme Council for 2020:
1) To ensure the balance of the republican budget for all revenues and expenditures, for all sources of covering the deficit.
2) Ensure the fulfillment of social obligations to citizens. I am talking about the timely payment of pensions, wages, social benefits and compensation, the financing of other socially protected areas.
3) Ensure funding and implementation of existing government programs.
I consider that a balanced budget is not only the fulfillment of the state’s social obligations to citizens, the timely financing of pensions, salaries and benefits. Equally important are capital investments in infrastructure - the construction and repair of educational, healthcare, cultural and sports facilities. I am convinced that this is direct investment in development, which means in the future of Transnistria.
In consider all the state programs working in the republic are aimed at the development and stable functioning of the state. Their main goal is to improve the lives of citizens.
In this context, I will focus on the implementation of the programs of the Capital Investment Fund, the main goal of which is to update the social infrastructure of cities and districts of Pridnestrovie.
Construction, repair and reconstruction of 171 objects for a total amount of 170.2 million rubles were completed in 2018, including 47 schools, 43 kindergartens, 12 health facilities, 2 cultural facilities, 5 sports facilities, 11 social protection facilities, 34 - municipal infrastructure, 17 objects of other spheres of vital activity of the state.
80 construction organizations were attracted to implement the Fund, about 1,500 employees were involved and over 300 new jobs were created. The amount of taxes received by the republic’s budget as part of the program’s implementation was 26.6 million rubles.
Implementation of the programs of the Capital Investment Fund continues in 2019. This will allow building and repairing 143 social facilities, including: 34 healthcare facilities, 19 schools, colleges and gymnasiums, 6 kindergartens, 8 cultural facilities, 8 sports, 8 social infrastructure facilities, 8 social rehabilitation facilities, 6 transport facilities, 11 - housing and communal services, 35 objects of other categories of life, and in 2019 in the cities and districts it is planned to open 45 sports fields.
The capital investment fund solves state strategic tasks: creating a comfortable living environment for our citizens, developing infrastructure and the economy at the same time. In this regard, it is necessary to continue its implementation as much as is required to improve the conditions and living standards of Pridnestrovians. As for its size, within the budget for the next year it should be at the level of the average volume of 2018-2019 - about 180 million rubles. Depending on the economic situation, budget revenues it is possible to consider the issues of adjustments to this amount.
Another important program is the Road Fund. The situation in the road sector also requires constant attention. Unfortunately, the annual patching of the pits was the main occupation of our road builders for a long time. This is not an effective expenditure of human and monetary capital.
When we came up close to this problem in 2018, the industry was reorganized, and today the issue of introducing new technologies is on the agenda. This includes concreting of roads, which is a good opportunity to capitalize our economy through the use of building materials from domestic manufacturers. It is important:
- to carry out the centralized purchase of road equipment for cities and districts of Pridnestrovie;
- to send money to repair streets and territories in rural areas. To accomplish this task, I ask you to find an opportunity to attract domestic investments of the State Unitary Enterprise;
- to pay special attention to inside roads and street sidewalks;
- to provide financial support to municipal enterprises manufacturing paving slabs.
At present, the approved state program for the development of the agro-industrial complex for 2019–2026 includes a plan of measures aimed at creating a stable, competitive, dynamically developing export-oriented agro-industrial complex that provides the entire population in terms of food production. We need to move on its systematic execution. Taking into account the established trends of increasing entrepreneurs' interest in dairy cattle breeding and farming, the Government’s task is to continue in 2019–20 to provide state support to rural producers, move along the development of land-improvement complex, and increase land irrigation.
2020 is declared the Year of Health by presidential decree. I want to emphasize that the Year of Health is not only measures to protect the health of citizens, but also the development of physical culture and sports, observance of the rules of healthy eating and maintaining a favorable state of the environment, creating conditions for citizens to lead a healthy lifestyle and popularize it, healthy environment life activity. In this regard, it is important to focus on the implementation of targeted state programs to combat cancer and cardiovascular diseases; HIV / AIDS; tuberculosis prevention and treatment; immunization of the population.
I ask you to continue the implementation of tasks on:
- construction and repair of clinics, hospitals, rural ambulance stations and medical and obstetric centers;
- purchase of medical equipment and medical equipment, including ambulances;
- Postgraduate education for specialists with higher medical and pharmaceutical education (refresher courses).
I want to emphasize that the implementation of the goals and objectives of the Year of Health, along with the execution of state programs in the field of health and sports, will allow us not only to modernize the infrastructure in these strategic sectors for the republic, but also to improve the life of Pridnestrovians.
I ask you to continue funding the above-mentioned programs, as well as the allocation of funds for implementation of the state program: Equal Opportunities, Textbook, Support and Development of Entrepreneurship, Provision of residential premises for orphans, children left without parental care, persons from among the children orphans and children without parental care ”,“ Development strategies of Pridnestrovian State University”.
As part of the budget message, I will focus on the tariff policy. Not only the basic principles of state support of the population, but also the interests of strategic enterprises of the state were taken into account for the first time in a long time, in the formation of tariffs for 2019. I’m talking about communal enterprises. Different policy pursued for a long time seems to be a kind of unwillingness to look into the eyes of the most serious problem, while the situation in the utilities sector is on the verge of a catastrophe. These are risks not only to leave citizens without appropriate services, but to endanger the health and life of people, the state of the economy and state stability in general.
Therefore, the Government and the Supreme Council must move in the direction of increasing the volume of budget settlements with utility enterprises, thereby stimulating the implementation of appropriate investment programs to modernize existing networks and maintain them in working condition.
The key task of ensuring economic self-sufficiency should still be the creation of a favorable investment climate, attracting investment flows into the economy. In 2018, for this purpose, new investment legislation was adopted, providing unprecedented preferences and guarantees for investors.
Of course, talking about a fundamental breakthrough in the investment field is premature. To ensure sustainable economic growth rates, the investment indicator should be at a level no lower than 25% of GDP. We have so far it has not exceeded 13%. Therefore, the task of maintaining high rates of investment activity in the medium term remains one of the main ones.
It is necessary to continue the implementation of the program of concessional lending to enterprises of the real sector of the economy, which demonstrates a successful start. Today, due to state support, enterprises of priority sectors of the economy have the opportunity and actively use credit resources at the rate of 3-4% per annum for up to 5 years. It is especially important to continue preferential crediting of enterprises and entrepreneurs in the sphere of agriculture by the State Reserve Fund, continue supporting the business community in the framework of the Enterprise Development Fund, pay attention to the functioning of business schools, financing a project that has become a brand - “Buy Pridnestrovian!”, Development of the tourism industry, preferential crediting of small and medium businesses in priority areas of the economy. In addition, it is necessary to look for additional forms of support for entrepreneurial initiatives in the republic.
It is important to work in the direction of providing the banking system with long-term cheap lending to the real sector of the economy. Therefore, I instruct the Pridnestrovian Republican Bank to carry out the development and implementation in 2020 of an appropriate set of concrete measures to achieve the stated goal in the framework of the planned monetary policy as one of its component directions for ensuring high rates of economic growth.
The next direction is providing affordable housing. This is an important problem that we are obliged to solve, and in a relatively short time. A good start has already been made. The program “Completion of construction of unfinished residential facilities on the basis of share participation in the Pridnestrovian Moldavian Republic for 2019-2021”, aimed at ensuring affordability of housing was developed and is being implemented. At the end of this year - the beginning of 2020, 397 apartments in Tiraspol and 39 apartments in Bendery in the so-called long-term construction will be commissioned. In 2020 - 2021, 192 apartments will be commissioned, of which: 18 - in Grigoriopol, 48 - in Slobodzeya, 26 - in Rybnitsa, 40 - in Bendery, 60 - in Dnestrovsk. By the way, by 2021, 628 apartments in the new housing stock will be put into operation.
Next, the purchase of apartments for orphans. Significant progress in this direction, which started this year and necessarily must be continued in the next as well as in future periods.
The Government in the near future needs to complete work on draft legislative initiatives to support young professionals and young families, the concept of which was the allocation of government subsidies for the purchase of housing. The Supreme Council should take due care to consider and implement.
The voiced directions, carried out mainly at the expense of public funds, cover, first of all, public sector workers and are designed to consolidate the most demanded state personnel in medicine, education, culture, housing and public utilities, law enforcement system. However, a greater number of citizens of the republic engaged in other non-state spheres of life activities need their own housing.
Along with shared construction and state support at the expense of taxpayers, one should think about switching to project financing, when developers and banks, rather than citizens, take risks. In this regard, I instruct the Pridnestrovian Republican Bank to develop and implement a clear and affordable mortgage lending program with citizens' lifting interest rates and terms.
One of the key areas of state policy has been a change in the positive side of the current employment situation by replacing available vacancies, as well as increasing a number of new and additionally introduced jobs over the past few years. This task faces the state today and the main thing here is new jobs in the real sector of the economy. 9407 jobs were created from 2017 to 1 quarter of 2019.
Meeting the needs of the economy in working specialties, including the implementation of a set of measures to fill the shortage of skilled workers and specialists, is already being implemented by the state through the introduction of a practice-oriented (dual) education system based on secondary vocational education organizations and enterprises of the republic. Strategic planning in this direction should be continued.
Based on the dynamics of employment in recent years, the forecast of the balance of labor resources and projected staffing needs, the Government should begin the implementation of the mechanism for state ordering of specialists already in 2019, including through the conclusion of tripartite agreements between the educational organization, the applicant and the relevant state authority.
We have found solutions on issues that have not been resolved for a long time - on the repayment of debts of some enterprises to employees on the payment of wages in the past two-year period. In particular, the historical wage arrears of employees of such enterprises as “Dniester Dawns”, “Slobodzeya Housing Authority”, and “Tyrnistrom” are fully repaid. This is also an important step that brought people confidence in the state, returned qualified specialists to the economy. Henceforth, in the event of the occurrence of such situations, which are essentially a violation of the constitutional rights and interests of citizens, the responsible state bodies should react promptly.
A few more important points on law enforcement, state security and defense, execution of sentences. It is clear that in building a legal state and developing civil society in it, their main function is the protection of public order and safety of citizens. In this regard, I ask you to study the issue of the development of the “Safe City” system, which should go beyond the limits of settlements to roads of national and local significance. It is also important to continue the work on financing costs for:
- purchase of uniforms for employees of law enforcement agencies;
- modernization of the objects of internal affairs, state security, defense and the system of execution of sentences (talking about the state of the barracks, garages, improving the living conditions of service, serving sentences);
- purchase of vehicles and other necessary technical equipment, consumables;
- nutrition and medical care.
The priority task should remain the social protection of citizens most in need of such protection in the first place. Let me remind you that in 2017–2018 we managed to build the optimal financing of socially protected budget items, which allowed:
- free transportation in trolley buses for pensioners, surcharges for participation in hostilities to the defenders of Pridnestrovie;
- make payment of guaranteed restored savings of citizens;
- increase support for families raising disabled children;
- carry out the timely payment of vacation pay to teachers;
- introduce a monthly allowance to pensioners with low pensions;
- provide benefits to lonely disabled people;
- finance the purchase of vouchers for sanatorium rest and treatment of several categories of citizens;
- stabilize the growth of payment for the consumption of utilities of natural monopolies;
- purchase prostheses and send for treatment of citizens outside of Pridnestrovie;
- Exempt all types of payments and fees for people with disabilities and combatants in the Great Patriotic War.
All this is only a part of the big work on the development of the republic as a socially oriented state. This business needs to be continued further.
It is also necessary to work out the possibilities and if any provide for the 2020 budget to increase the revenue sources of public sector employees, retirees, and other vulnerable social categories.
Continue to move towards increasing the amount of funds allocated to improve the quality of nutrition in medical and educational institutions invested in the health sector. It is about supplying the necessary medicines and modern high-tech medical equipment.
I also ask you to continue systematic work with citizens and public associations to identify the most important problems for people that require urgent solutions.
2020 in Pridnestrovie is the year of two anniversaries. We will celebrate the 75th anniversary of the Great Victory and the 30th anniversary of our republic. Dates are very important for each Pridnestrovian, so funding for these events should be reflected in the relevant budget lines.
Dear Colleagues! Dear Pridnestrovians! An effective government policy can be built on: flexibility and sustainability of the budget system, balance of the republican budget, and fulfillment of social obligations to citizens. We can create a developed state for the people only in this way. Therefore, I aim the Government and the Supreme Council to work together harmoniously and clearly on the 2020 budget. I emphasize that the competent implementation of the budget for next year does not begin on January 1, it begins today.