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Russia filthy rich but can't manage money: Official

Russia can't manage its money

Russia might be in a recession but it has plenty of money but it just manages money badly, a high-ranking Russian government official has said according to news agencies.

Andrei Makarov, the head of the Duma Committee on Budget and Taxes, told a convention of Russian President Vladimir Putin's United Russia party Monday that Russia was bad at handling money.

"The main thing we need to understand is that we are filthy rich, but we do not always manage that money effectively," he said, the Moscow Times reported quoting the RBC news agency.

Makarov was speaking at a party forum in which high-ranking officials spoke on a range of subjects including improving the economy, corruption and improving Russia's taxation measures, including the adoption of "anti-offshore legislation," United Russia's website stated.

Rush hour traffic jams Ukrainian Avenue in Moscow.
Sefa Karacan | Anadolu Agency | Getty Images

Makarov also said that the authorities have to fight for efficient money management on every level, adding that the idea of printing new banknotes would not solve Russia's existing problems, the Moscow Times reported.

Russia's economy is certainly in need of a helping hand, with low oil prices and international sanctions (for its annexation of Crimea and role in a pro-Russian uprising in east Ukraine) weighing on the government.

Russian Finance Minister Anton Siluanov said on Thursday the country's budget deficit was seen at 3 percent of GDP in 2016 – a level that Putin has said the deficit should not exceed - with an oil price of $40 a barrel, Reuters reported. Benchmark Brent crude is currently trading at $40 a barrel and U.S. sweet crude at $39.15 a barrel showing that Siluanov's forecast could be reached this year.

Bill Browder, Hermitage Capital Management
When Russia's money runs out, the 'real trouble starts'

Capital outflows as a result of the economic slump and persistent tax evasion have also proved a big problem for the government and economy. TASS news agency reported last year that over $2 trillion has flowed out of Russian jurisdiction through "offshore schemes" in recent years, according to experts.

Anti-offshore legislation – that will require Russian individuals and corporations that own 50 percent or more of an offshore asset to declare profits to Russia's tax authorities and to pay taxes in Russia – is aimed at preventing such outflows.

For more on the Moscow Times story, click here.

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