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Russia: Ministry of Finance Will Distribute Aid for Foreign Development

(Sept. 21, 2011) On August 26, 2011, the Government of the Russian Federation adopted a proposal of the Ministry of Finance to amend the Federal Law on Government of the Russian Federation by establishing the Federal International Development Agency. The new agency will develop assistance programs, distribute Russia's official development assistance, and supervise projects aimed at assisting other countries.

According to the proposal, the agency will be subordinate to the Russian Ministry of Finance and will coordinate its activities with the Ministry of Foreign Affairs. It appears that the new agency will be formed as a federal unitary enterprise. This legal status will allow for discretionary use of the development budget. The head of the agency will be appointed by the Prime Minister upon the recommendation of the Minister of Finance and the consent of the Foreign Affairs Minister. The agency head's deputies will be appointed by the Minister of Finance. (Russian Ministry of Finance Will Fight Foreign Poverty [in Russian], NEWSRU.COM (Aug. 26, 2011).)

A leading Russian economist, Sergei Prihodko, commented that this administrative move indicates a significant change in Russian foreign assistance policy away from focusing on former Soviet republics, to becoming a player among other major donor countries. In his view, however, the creation of such an agency is premature, and the amount of Russian aid is not enough to justify the agency's creation and such a substantial policy change. (Id.)

In 2010, Russia spent an amount equal to US$472.3 million for foreign aid. The country's highest amount of foreign aid, equal to US$785 million, was budgeted in 2009 with the purpose of assisting other countries to meet the challenges of the global financial crisis. (Claire Provost, The Rebirth of Russian Foreign Aid, THE GUARDIAN (May 25, 2011).)