Jens Asbjørn Bøgen
The donation could reportedly cover up to 15% of the federal budget deficit.
When a country faces massive economic strain, its leaders often look for creative ways to balance the books.
National budgets can quickly spin out of control during times of intense international conflict — like a grinding war of attrition now in its fifth year.
To combat this, some of the world’s wealthiest individuals have stepped up to deliver an unexpected mountain of cash.
Massive cash injection
According to the business magazine Expert, Russia’s richest oligarchs have just handed over a staggering 220 billion rubles ($3 billion) to the state treasury.
The staggering sum is nearly 130 times larger than the non-governmental donations the Kremlin originally expected for the entire year. Official budget-tracking data shows the state had initially projected only a tiny fraction of that amount.
The corporate handouts will likely continue to grow as the year progresses. An anonymous federal official told Expert that these private contributions are on track to reach 300 billion rubles by the end of the fiscal year.
Behind closed doors
This unusual financial lifeline traces back to a private gathering held in March. During that meeting with President Vladimir Putin, a wealthy businessman pitched the idea of voluntary corporate contributions to help bankroll the government.
The Moscow Times reports that Kremlin spokesman Dmitry Peskov later clarified that Putin himself never actually demanded the cash from the business leaders, contrary to early media rumors. The spokesman confirmed that the president supported the personal initiative.
Insiders claim that billionaire senator Suleiman Kerimov was the businessman behind the proposal. A separate report by media outlet The Bell noted that Kerimov personally pledged 100 billion rubles to lead the effort.
To keep things quiet, the tycoons are not sending funds directly from their main businesses. Sources told Expert that the billionaires are routing the money through obscure shell companies and private corporate foundations instead.
Plugging the gap
While the multibillion-dollar handouts represent just a small portion of overall state spending, financial experts say the money will help plug a massive gap.
Analysts told the magazine that the cash could cover up to 15 percent of the country’s soaring budget shortfall. From January to April, the deficit exploded to nearly $80 billion due to massive military expenses.
The Russian Finance Ministry and the Russian Central Bank have recently warned the Russian leadership, that Russia’s entire economy is at risk unless something is done to curb defense spending.
Sources: Expert Magazine, The Bell, Bloomberg, The Moscow Times
