“Do not cling to any dogmas.” In Russia, a brief overview of moratoriums under the public procurement law
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Federation Council Speaker Valentina Matvienko suggested that the Russian government “impose a moratorium” on the operation of public procurement laws in order to “untie the hands” of officials and give them the opportunity to “effectively use the chosen funds for the development of the country and participate in transactions.” What could this look like?
“I would suggest, taking into account the current conditions, the reality in which we live, not to cling to any dogmas, but, perhaps, to impose a moratorium on the 44th law and make it possible to quickly master the funds,” Matviyenko said for consideration. Federation Council in Wednesday. Under the “new reality” the speaker, apparently, means the war against Ukraine and its consequences, including for the Russian economy, and under the “dogmas” – the norms of the law on public procurement.
Matvienko proposes that the government accept the powers of the regions of the regions “in an expedited manner of making decisions on the start of construction of infrastructure, social and other facilities” – “for the period until the completion of the military operation” (this is how the Russian authorities are proposed to be appointed).
The proposal, therefore, concerns the abolition of competitive procedures for one of the most costly areas – state structures, which take billions of rubles, including at the level of budget presentation. “I am negotiating with the chairman of the sanctions,” the speaker ordered.
Matviyenko’s idea was commented on by the government. The Ministry of Finance, according to RIA Novosti, did not support it. The law on public procurement “does not capture the development of funds” and “allows you to conclude contracts in the shortest possible time,” Matviyenko objected at the ministry.
Transparency International Russia CEO Ilya Shumanov (he and the organization recognized as “foreign agents” in Russia) told the BBC that Matvienko’s proposal, in his opinion, “looks like corrupt officials are lobbying their interests.”
What are “dogmas”?
In Russia, the expenditures of various state structures – from districts of small towns to the presidential administration – must go through the consideration of public procurement. Basically, these are public auctions in which a wide range of companies can participate.
The system was designed to fight corruption and competition in the economy. This reform has been carried out for many years and with great resistance from officials and big business.
Thanks to the reform of admissions to public procurement, I received medium and sometimes small businesses that are not connected with the authorities. In some companies, even subdivisions involved in public procurement have appeared – involvement in work in public procurement.
There is a loophole in this procedure: a government customer can conclude a contract without a tender – with a “single supplier”. But in most cases, the law requires permission from the President of Russia.
The system, of course, does not always work in practice. The BBC, for example, looked at people in contact with Vladimir Putin. And there is a “circulation” of money in the budget system: a share of their reserves, and the discovery of their hotels, controlled by the presidential administration.
Public procurements have become the basis for many journalistic investigations – this implies public control over their conduct. The monitoring of the system is also monitored by government agencies, for example, the Accounts Chamber of Russia and the Federal Antimonopoly Service.
On the occasion of a pandemic?
To suspend the operation of the federal law, according to Matvienko, may be self-regulation – although this is a direct decision of the government.
A similar scheme has already been arrested by the Russian authorities in connection with the onset of the pandemic. True, in order to receive a new appointment, the government of the council to the State Duma is right in the laws on public procurement. They were unexpected in March 2020.
The amendments abolished the strict regulation of purchases in conditions of “emergency situations” and gave the right to use for this time cases of purchases without competition not provided for by law and the rules for their closure.
“It is important that after the normalization of the situation, the authorities return the auctions,” they were discovered even then.
Still, it is impossible to cancel the law on your own.
How can this affect development and the economy?
Against the general background of a sharp increase in Russia, Matvienko’s proposals in the framework of managing cash flows from under public control, both on budget expenditures and on a possible reduction in civil servants.
From year to year, for example, journalists used to analyze the incomes and property of officials and deputies – this was one of the rare opportunities to learn something about the rather closed life of the Russian ruling class. They will not be published this year.
Whether to cancel in the event of a moratorium on the law on public procurement and the requirement to publish a report on the Agreement without competition of state contracts and state contracts, which are still widely known to the general public, is unknown.
Economists and analysts assess the state of the Russian economy in advance, based on statistical data. Since the beginning of the war with Ukraine, its attention has been concentrated in a greatly reduced form, for example, almost all customs statistics have been closed. As wrote FT, is currently preparing the opportunity to declassify some of the statistics. In the meantime, even the officials themselves do not fully understand what is happening with the country’s economy.
“The absence of formal open and competitive procedures for public procurement has affected the excessive corruption risk that appears in textbooks on economics,” – BBC Ilya Shumanov.
Refusal of publicity, in the opinion, will close the opportunity to get access to information on procurement not only to citizens, media and private organizations specializing in identifying corruption risks, but will also limit competition in the market.
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