"After long and complex consultations and disputes, some aspects of which have not been resolved, we have agreed on an unprecedentedly large sum of state program financing. This sum is simply huge,” Medvedev told a government meeting which discussed investment projects for the development of Russia’s Far East and Baikal area.
"I suggest that we use revenues from investment by the National Welfare Fund as sources of financing. Also, the Pension Fund's financial resources may be used for loans to implement investment projects,” Medvedev said.
Russia’s Reserve and National Welfare Funds are oil wealth funds which hold cash from windfall oil revenues to provide a cushion for Russia’s budget at a time of deterioration in the global and domestic economies.
The new state program for the accelerated development of the Baikal area and the Russian Far East through 2020 sets out over 10 trillion rubles ($320 billion) in spending, including 3.8 trillion rubles from the federal budget, to turn them "into a competitive region with a diversified economy and improvements in the social and demographic situation in the macro-region’s territory,” the government’s press office said previously.
The program, which envisages financing from the federal budget, loan funds and private investment, was first discussed at a government meeting on March 21, but met with strong criticism from Finance Minister Anton Siluanov who criticized the excessive spending involved.
Medvedev said the development of Russia’s vast Far East area, which is home to just 6 million of Russia's 142 million people, was a priority target for the federal government.
"Priorities should always be set, this is understandable. And one of the top state priorities is the Far East. I would like the Finance Ministry to work on this basis,” he said.
Medvedev pledged to allocate an additional 260 billion rubles from the federal budget in 2013-2017 to expand the capacity of the Trans-Siberian rail road (Transsib) and the Baikal-Amur mainline (BAM) connecting Siberia with the Asia-Pacific region.
The upgrade will boost the capacity of BAM and Transsib by 40 million tons of cargo annually, including 25 million tons of cargo deliveries to the Russian Far East ports handling shipments towards Asia and Pacific countries, according to Russian rail monopoly RZD.