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Unfortunately, in Russia the said functions have been performed in inadequate volumes. As noted above, not only do fundamental research of higher education institutions have no incentives, but it is also shut down in practice. Therefore, higher education institutions communicate rather than create knowledge; business, which is not satisfied with the quality of both training of specialists and research, is reluctant to expand cooperation with such institutions, as, in particular, evidenced by the results of a monitoring of the economics of education, which was conducted through joint cooperation between the State University Higher School of Economics ( SU HSE ), the Federal Statistics Service of Russia, the Public Opinion Fund and the Levada Center at the request of the Ministry of Education and Science of Russia. The results are as follows: 29% of enterprises established their own education institutions, 11% training centers, 15% retraining courses, 2% own vocational schools with colleges and technical schools, and 2% -- own higher education institutions. It is these institutions that enterprises prefer to deal with in training personnel of any degree of skills. In 2005, two thirds (65% ) of these enterprises refused to cooperate with higher education institution ( against 51% in 2004 ).

Even worse is the situation with high education and basic vocational training. In 2005, 71% of enterprises refused cooperation with technical schools and colleges, while 67% of enterprises did their best to avoid it. Those enterprises which still maintain cooperation with the education system are about to do the same. Long-term forms of cooperation agreements on practical and special training for students are first to be cut back, one forth of enterprises had such agreements in 2004 against barely 13% in 2005.

Hence a series of provisions adopted at the G-8 Summit in the Resolution on Education for Innovative Societies in the 21st Century, while being absolutely sound in essence, have been found a challenge for the Russian education system: to adjust practical measures of different departments and agencies to the declared objectives. For the time being, practical implementation of the concept of modernization of the Russian education system is in pain contradiction with the special tasks it declares.

I.Rozhdestvenskaya Issues Considered at the Meetings of the Government of the Russian Federation held on July 6, 13, 20, The Government of the Russian Federation held a meeting on 6 July 2006, which considered, among other issues, a Draft Federal Law On Amendments to the Federal Law On Provision of Pubic Benefits to Nationals Having Children16. The Government of the Russian Federation held a meeting on 13 July 2006, which considered, among issues, the results of implementation of the programs on domestic and foreign loans extended to the Russian Federation in 2005, and drafts programs on government domestic and foreign loans to be extended to the Russian Federation in 2007; the results of implementation of the Program on the Russian Federation loans extended to foreign countries and their legal entities in 2005, and a draft program on the Russian Federation loans to be extended to foreign countries and their legal entities in 2007; a Draft Federal Law On Amendments to the Laws of the Russian Federation ( with regard to provision of access to higher occupational education for persons who have completed in good faith their contract enlisted service for a period of at least three years in the Arms Forces of the Russian Federation and other military units in the capacity of privates, seamen, sergeants, first sergeants, as well as with regard to provision of access to high and higher occupational education for military personnel doing a military service under a contract ( subject to military officers ), whose length of contractual service is at lest three years ), then a Draft Law On Provision of Higher Occupational Education for Military Personnel. The Government of the Russian Federation held a meeting on 20 July 2006, in which it This issue was not covered in the press release of the Meeting of the Government.

considered, among other issues, the measures to be taken to improve the welfare of children in the Russian Federation 2007-2010.

*** The Government of the Russian Federation held a meeting on 13 July 2006, in which it considered, among other issues, the results of implementation of the programs on government domestic and foreign loans of the Russian Federation in 2005 and on draft programs on government domestic and foreign loans of the Russian Federation in 2007. It was noted at the meeting that in 2005 the Ministry of Finance of Russia provided no offering of state treasury short-term zero coupon bonds ( GKO ). In addition, the Ministry of Finance of Russia performed a cash-free transaction on conversion of the Bank of Russias bonds ( TS ) into general par value government securities concurrently with partial reduction of the government domestic debt. It was also noted that in 2005 the Ministry of Finance of Russia launched a new auction policy providing for offering of large issues of fixed-term government bonds ( 3, 5, 10 and years ) on the preset dates.

Furthermore, the Meeting of the Government of the Russian Federation considered the Program of government domestic loans the Russian Federation in 2006 and the results of its implementation in the period between January and May 2006. It should be noted that this Program was prepared taking into consideration a Debt Strategy for 2006 2008 approved by the Government of the Russian Federation in April 2005, providing for reduction of the total government debt of the Russian Federation and replacement of external services of financing with domestic loans, as well as on the basis of the tasks as follows: to increase offerings of government bonds in the domestic market, and to obtain loans in 2006 - 2008 for periods of 3 to 30 years. The Program on government domestic loans of the Russian Federation for 2007 was also prepared taking account of the approved said Debt Strategy for 2007 2009. The Debt Strategy provides for reduction of the government debt of the Russian Federation in percentage terms of the GDP, replacement of external services of financing with domestic loans, retaining and development of the government securities market.

It should be noted that the Program on government foreign loans of the Russian Federation in was implemented in accordance with the relevant provisions of the applicable law of the Russian Federation, as well as taking into account of the message On Budget Policy in 2005 issued by the President of the Russian Federation. Regarding budget expenditure accounts, the amount provided for liabilities for loans ( credits ) from international financial organizations ( IFO ) is substantial, $390,36 million US dollars. In 2005, no federal budget liabilities arose as part of the projects under which the Russian Federation would furnish guarantees against non-commercial risks. According to a decision of 30 March made by a Joint Working Group established by the Government of the Russian Federation and the World Bank, the Russian Federation refused a guarantee facility in timber and coal industries due to the lack of demand by foreign coal and timber producers for guarantees against non-commercial risks and progress in implementation of the guarantee facility in timber and coal industries.

The Program on government foreign loans of the Russian Federation in 2006 was implemented taking into account the basic principles of the debt policy for the current year and years to come, providing for Russias total withdrawal from borrowing new tied loans from foreign governments, and enhanced implementation of the existing projects financed with previously debt capital.

In preparing the Draft Program on government foreign loans to be extended by the Russian Federation in 2007, the Ministry of Finance of Russia relied on the financial plan of the Russian Federation for 2009 and basic principles of the debt policy with regard to international development banks ( IDB ) approved by the Government of the Russian Federation on 20 April 2006.

The Government of the Russian Federation held a meeting on 13 July 2006, in which it considered the results of implementation of the Program on the Russian Federation loans extended to foreign countries and their legal entities in 2005, and a draft program on the Russian Federation loans to be extended to foreign countries and their legal entities in 2007.

For the purposes of implementation of the corresponding Program for 2006, the Federal Law On Federal Budget in 2006 approved the amount of Rb 21,3 billion, equivalent to $746,023 million US dollars. As of 1 June 2006, Rb 2.439,4 million of budget funds were allocated for the foregoing purposes.

The Program on the Russian Federation loans to be extended to foreign countries and their legal entities in 2007 was prepared taking into account that Russia has to complete the existing projects and ob serve the liabilities assumed by Russia under the existing intergovernmental agreements, as well as with a view to providing governmental financial support to export of industrial products in the industries that keep manufacturing competitive products.

Furthermore, the meeting of the Government of the Russian Federation on 13 July 2006 also considered a Draft Federal Law On Affording Access of the Military Personnel to Occupational Education.

The Draft Law is intended to ensure access to higher education for persons who have completed in good faith their contract enlisted service for a period of at least three years in the Arms Forces of the Russian Federation and other military units in the capacity of privates, seamen, sergeants, first sergeants and persons dismissed from military service on the grounds provided for by corresponding clauses of Article Federal Law On Military Duty and Military Service, as well as to adjust the Law of the Russian Federation On Education and Federal Law On Higher and Postgraduate Occupational Education in accordance with Paragraph 2, Clause 2, Article 19 of the Federal Law On Status of Military Personnel .

The Government of the Russian Federation held a meeting on 20 July 2006, in which it considered, among other issues, implementation of measures to be taken to improve the welfare of children in the Russian Federation 2007-2010, including :

The amount of tax deductions have been doubled ( from Rb 300 to 600 per month ) for families with minors on 1 January 2005. Furthermore, the amount income subject to tax deductions increased from Rb 20 thousand to 40 thousand to encourage families welfare growth ;

The lump-sum maternity grant was adjusted twice ( on 1 January 2005 and 2006 ), its current amount is Rb 8 thousand, and it has been adjusted above the inflation rate. Since 2006, the amount of monthly child allowance has been raised from Rb 500 to 700, which is granted for a period of mothers childbirth leave till the child reaches age of 1.5 ;

The Social Insurance Fund of Russia provides annual financing of summer-time children healthimprovement campaigns to improve children health status and development, and prevent child neglect;

The issues of social support to physically handicapped children were brought under the federal governments supervision, a monthly cash payment ( MCP ) in the amount of Rb 1000 ( which is subject to further adjustment ) and a social security package were introduced for this category of children;

Miscellaneous issues.

M. Goldin Review of Budget Legislation of the Russian Federation in July The following amendments were made to the applicable law of the Russian Federation in July 2006. Details were provided on application of the Procedure for implementation of the provisions of the instruction on budgetary accounting at state power authorities, management bodies of public extra budgetary funds, management bodies of territorial public extra budgetary funds, local self-government bodies, and state-financed organizations; details were provided on application of budget classification of the Russian Federation in record-keeping of cash disbursements for modernization of fixed assets; terms of submission of expenditure schedules to bodies of the Federal Treasury due to intradepartmental reorganization; details were provided on application of legal practice concerning various approaches to resolution of disputes related to application of regulations of the Budget Code of the Russian Federation.

I. LETTERS issued by the Treasury of the Russian Federation and the Ministry of Finance of the Russian Federation 1. The Ministry of Finance of the Russian Federation issued letter No. 02-14-10/1641 on 23.6.2006 ON THE PROCEDURE FOR IMPLEMENTATION OF THE PROVISIONS OF THE INSTRUCTION ON BUDGETARY ACCOUNTING, APPROVED BY ORDER No. 25 OF THE MINISTRY OF FINANCE OF THE RUSSIAN FEDERATION ISSUED ON 10.02.2006, AT STATE POWER AUTHORITIES, MANAGEMENT BODIES OF PUBLIC EXTRABUDGETARY FUNDS, MANAGEMENT BODIES OF TERRITORIAL PUBLIC EXTRABUDGETARY FUNDS, LOCAL SELFGOVERNMENT BODIES, STATE-FINANCED ORGANIZATIONS. It was specified in the letter that pursuant to the provisions of Order No. 25 issued by the Ministry of Finance of the Russian Federation on 10.02.2006, which shall be applied to the relations that has been arisen since 1 January 2006, irrespective of the date on which the said Instruction on budgetary accounting due to organizational and technical preparedness of agencies comes into force, outgoing balances of budget accounting accounts determined by instruction on budgetary accounting approved by Order N 70 issued by the Ministry of Finance of the Russian Federation on 26.8.2004 as of 1 January 2006 shall be carried forward to incoming balances of budget accounting accounts determined by Order No. 25 of the Ministry of Finance of the Russian Federation as of 1 January 2006 in the intermediate accounting period.

It was noted in the letter that balances shall be carried forward per each account on the basis of the value that was recorded as of 1 January 2006 with the budget accounting of an agency.

It was expounded in the letter that there is no need to make adjustments to primary accounting documents in performing operations regarding record-keeping of turnover as per budget accounting accounts.

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