Government Should Economize

Russian President Vladimir Putin said on Monday that his government should pursue a prudent fiscal policy. Putin?s words came amid calls from some members of the cabinet to spend yet more of the record oil revenues that Russia has been enjoying in recent month, Mosnews.com reported.

The Russian government is already walking a tightrope between the need to save money against any future drop in crude prices and the desire to be seen as redistributing wealth around the country where an average wage is still only $300 a month.

Intense pressure from the parliament has already forced the cabinet to pencil in more than $10 billion in extra expenses for its draft 2006 budget, approved last month by the minister and now brought to the State Duma for consideration. Even with extra spending the budget still expects a surplus of 3.2 percent of GDP.

?I ask you to refrain from poorly thought out decisions,? Putin, quoted by the Reuters agency, told a meeting of politicians and officials before parliament starts debating the budget. ?We can spend as much as we earn, but if we start to spend more, then a change in the external environment would force us either to climb into debt or to cut spending.?