Diana Galieva on how the risks of sovereignization are divided among White House officials

One of the main processes amid the economic transformation of the last two years is the sharing of risks: we are seeing how business shares the risks that have increased under sanctions with partners, how risks are balanced between the state and business when implementing large projects. The process of sharing risks on the side of the state remains elusive to an external observer, but inconspicuousness does not at all mean that officials are inattentive to the possibility of avoiding excess responsibility – it is difficult to overestimate it in the promises of building a sovereign Russian economy.

The technological modernization scenario requires large amounts of government investment in a wide range of areas. Private investors, as a rule, are not ready to invest in them alone: ​​the development of production facilities that have been built abroad for a long time is promising only in conditions of isolation and with guaranteed demand from the state. Therefore, the state takes on the risks of the new economy, building a comprehensive system of support measures around priority projects. In general, the “priorities” are determined by the government, taking into account the recommendations of industry departments, business, the scientific and expert community – but responsibility for the specific successes of import substitution and the formation of a new technological economy in the Russian Federation falls on industry ministries.

For several years, the Ministry of Finance has been working on a reform that changes the rules for the distribution of budget subsidies – the goal was to unify the process, transfer it to an electronic format, which would allow flexible adjustment of state support mechanisms and concentration of budget incentives in priority and promising sectors. Uniform rules and digital control reduce the risks of ineffective government investments in the private sector. However, at the same time, the reform also changed the model of risk distribution within the government.

In October 2023, the White House, in development of legislative changes, approved resolution No. 1780 — it introduces uniform rules for selecting subsidy recipients, but meaningful decisions about who can receive government money and for what purposes they can spend it were left to the level of industry regulators.

The bet on greater flexibility can be justified: “on the ground” it is better visible which companies to support and why. However, responsibility for poor management decisions is also limited to the perimeter of departments – a government act, negotiated with difficulty by colleagues in the cabinet, and then approved by its head, undoubtedly has advantages in the task of distributing risks among a large number of participants.

In this sense, the example of the Ministry of Industry and Trade is indicative: by accident or not, on December 30, 2023, the government approved resolution No. 2416, prepared by the industrial regulator back in April and formally not needed by anyone in November. The document makes adjustments to resolution No. 2136 dated December 16, 2020 on the rules for the distribution of subsidies by the Ministry of Industry and Trade for scientific research and development in the field of electronics, that is, to whom, under what conditions and for what purposes the department will allocate subsidies.

As the Ministry of Industry and Trade explains to Kommersant, in 2023, as part of the mechanisms for further adjusting the regulatory framework, a procedure was carried out to expand the scope of Resolution No. 2136. Compared to the previous version of the document, the new resolution significantly adjusts the list of equipment, spare parts and materials for the production of which the department is ready to provide subsidies. The Ministry of Industry and Trade explains that the list has only been clarified and partially expanded. Inaccuracies in a number of formulations were also eliminated. “These systemic changes should have been in effect in future periods of implementation of the resolution,” says the Ministry of Industry and Trade.

The conflict is that there will be no future periods. Already in 2024, the need for a government regulation disappeared due to the reform of the distribution of subsidies. “The start of competitive selection will be approved by a decision of the Ministry of Industry and Trade,” the ministry confirmed to Kommersant. They add that its new provisions will form the basis of an updated subsidy mechanism, and the effect of the “unnecessary” resolution No. 2136 was limited to 2023. The results of the work carried out could remain within the ministry and be used by officials of the Ministry of Industry and Trade when drafting departmental acts and without government approval.

However, such accidents can be treated with understanding: the field of electronics is quite sensitive, the results are needed, and how to show them in a few years is still unclear. Budget investments in microelectronics (taking into account subsidies and government procurement) are growing multiple: if in 2020 their volume did not exceed 10 billion rubles, then in 2023 it reached 147 billion rubles, and in 2024 it is estimated at 210 billion rubles. However, the desire to quickly develop a wide range of equipment for the production of microelectronics faces difficulties: enterprises are wary of undertaking such development work – there are neither employees with the necessary competencies nor scientists with sufficient knowledge for this (see. “Kommersant” dated October 12, 2023). It turns out that there are no implementers, technology is needed and subsidies will have to be distributed despite the risks.

The state’s obvious interest in accelerating import substitution in a promising industry has not been without violations – memories of the experience of the former deputy head of the Ministry of Digital Development, Maxim Parshin, are still fresh in my memory. detainee in July 2023 on suspicion of receiving a bribe for assistance in the allocation of grants by the Russian Foundation for Information Technology Development. These grants were also allocated for accelerated import substitution of “general system and industrial software.” Because of the incident, the Ministry of Digital Development had to suspend the distribution of grants and think about abandoning direct grant support for IT developments (see. “Kommersant” dated November 16, 2023). Such a risk is assessed by departments, obviously, as much more undesirable than issuing an “unnecessary” resolution, which would at least virtually make it possible to share with the entire government the responsibility for choosing future recipients of public funds.