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However, after the abolition of an elective executive authority and the monopolization of the political markets in a majority of regions, the effect of such additional investments in political stability is becoming increasingly weaker. An additional impetus to the process of decreasing transparency will be given by the newly introduced interpretation of the notion of extremism (as offered by Law of 27 July 2006 No. 148 FZ ), which now is to incorporate public libel in respect to a person occupy ing a government post of the Russian Federation or a government post of a subject of the Russian Federation, during the execution by the lat ter of his official duties or in connection with their execution, together with an accusation of the aforesaid person of the commitment of the deeds specified in this Article, on condition that the fact of libel is es tablished in the judicial procedure. In other words, any sharp criticism is not to be treated as libel, considering that in a situation of a growing administrative dependence of judges the establishment of a fact in the judicial procedure becomes just a formality. Thus, the Law has greatly increased the risks of criminal prosecution of journalists and editors for any oppositional activity, which alone can create the positive external effects of the media markets (although at the same time grating on the nerves of government officials and politicians).

The longer channels for cash flows toward their final point of use, in a situation of decreasing transparency (especially at the regional level), leaves little hope that the provision of public benefits in the sphere of social protection will remain at least at its previous level.

These estimations are also shared by other experts see Kommersant of 14 Decem ber 2006.

2. The Ways Envisaged for Providing Solutions to Social Problems 2.1. State Charity: National Projects National Project Health The main goals of this national project are in the sphere of public health care: to improve the general health of Russias population, to lower the rates of morbidity, disability, and mortality; to strengthen the public system of primary medical care, to create appropriate conditions for efficient medical care at the pre hospitalization stage; to develop the preventive orientation of the public health care system; to satisfy the populations needs in hi tech types of medical care.The projects im plementation in the year 2006 is to be funded from the federal budget and state off budget funds. The sum of 88.4 bln roubles has been ear marked in 2006 for the implementation of the measures envisaged in the project.

The main items of expenditure the development of the emergency medical service and a substantial increase of the salaries of micro district physicians have been repeatedly criticized by the authorities opponents as a populist measure, doomed to be ineffective. This also has been admitted, in an indirect way, by the non government mass media (see the laments of an observer of the Delovaia Gazeta Vzgliad [Business Newspaper Outlook] concerning the jealousy of colleagues in respect to the direct recipients of funding within the framework of national projects).

Regretfully, the project is going to postpone, at least until mid 2008, the discussion of the further directions of reform in this countrys public health care system, whose position is now the worst among all the pos sible variants the system is no more fully public, and is still very far from being private. Insurance based mechanisms cannot operate effi ciently, at least because the market for medical services has been di vided administratively between insurance companies attached to the government, which has resulted in a nearly complete absence of any competition for customers between the insurers.

National Project Affordable and Comfortable Housing to the Citizens of Russia The priority national project Affordable and comfortable housing to the citizens of Russia is envisaged for the period of 6 years. It incor porates the preparatory phase (the year 2005), the first phase (the years 20062007), and the second phase (the years 20082010). For the first phase (the years 20062007), four priorities have been set by the President of Russia: to increase the scope of mortgage crediting for housing construction; to increase the affordability of housing; to in crease the scope of housing construction and modernization of objects in the utilities infrastructure; and to fulfill the governments obligations in respect to providing housing to certain established categories of citi zens.

The total budget of the priority national project in its first phase (the years 20062007) amounts to 212.9 bln roubles: direct expenditures 122.9 bln roubles, and government guarantees 90 bln roubles. The funding from the federal budget 86.1 bln roubles of direct expenditures and 60 bln roubles of government guarantees. The funding from regional and local budgets will amount to 36.8 bln roubles of direct expenditures and 30 bln roubles of government guarantees.

As usual, any large scale government investments are indicative of a high degree of regulation in the banking and investment markets and the absence of any access for competition, including international competition. The opening of access to leading US and European banks would, while creating problems for domestic bankers, at the same time eliminate the necessity for society and the State to spend billions of roubles on increasing the affordability of credits. It should also be re membered that the State may enjoy such opportunities only in the years of high oil prices, whereas the prices of housing are still too high to make is affordable for the majority of families, especially young families.

National Project The Development of the Agroindustrial Com plex [AIC] of Russia The priority national project The development of the AIC incorpo rates three areas of activity: an accelerated development of livestock breeding; promotion of the development of small size forms of enter prising; the provision of young specialists (or their families) with hous ing in rural areas.

The measures declared in the project will be financed from the fed eral budget (34.9 bln roubles in the years 20062007), the budgets of RF subjects and off budget sources.

This national project has undoubtedly the longest and least fortunate history in financial and economic terms. It is noteworthy that this time the forms of funding allocation do, indeed, remotely resemble market methods, which leaves some room to the hope that some of the re sources will indeed be saved from being unreasonably wasted. The problem here has been posed by yet another precedent of the State having interfered with the natural process of interdepartmental compe tition for investments. The general background, characterized by talks of the economys diversification, its reorientation toward hi tech devel opment, and the selection of the sector which is the least adapted to the market for large scale state support, is far from being optimistic.

The attempt to provide solutions to the problem of supplying public benefits to regions with underdeveloped infrastructure is characterized by the low transparency of such investments. The rural electorate has always been, even during the years of very acute political competition, the reserve for manageable voting. Therefore the demand of the rural population for institutes capable of an efficient exploitation of such in vestments5 is minimal, just as their civil habits are barely existent.

National Project Quality Public Education The main directions of the project Quality public education: to cre ate incentives for those educational establishments (higher educational establishments and secondary schools) where innovative curricula are being actively implemented; to implement information technologies in the sphere of education; to support active and talented young people;

to organization basic vocational training for the military personnel ( con scripted and on contract); to create a network of national universities and business schools; to introduce additional remuneration to teachers charged with class supervision; to encourage best teachers; to supply school buses to rural areas; to provide schools located in dotation dependent regions with teaching equipment.

For the definition of the demand for institutions, see Mau, Yanovskiy, Zhavoronkov et al., 2003.

The amount of financing, including the expenditures on informa tional support, for the year 2006 is 25.28 bln roubles, the estimated plan for the year 2007 being 31.18 bln roubles.

This potentially is the least harmful project, unfortunately, it is ori ented toward criteria that are very vague, and so are fraught with op portunities for corruption (incentives for establishments where innova tive curricula are being implemented). In this connection, it would be quite worthwhile to compare the effect of exactly similar projects of the Open Society Institute (where the inclusion of educational establish ments in the Internet systems is envisaged), which has been ousted from Russia, and that of the government projects to be implemented after 2008.

The projects program places no emphasis on the development of subject oriented education and in depth studies of mathematics and foreign languages as a basis for all subsequent education, the success ful practical examples of which, in terms of mass scale implementation (instead of the implementation as original programs authored by indi viduals), can also be found in the Soviet period.

And all this is happening against the backdrop of an actual collapse of the reform involving the introduction of the Single State Examination, which has failed to ensure just, equal and corruption free competition of students from urban and rural areas and from all regions (with the understanding of the fact that the capital cities will be far ahead, and the only goal of reform has been to provide the young people from back water, at the very start, with adequate opportunities to make use of remote access technologies, with access to competitions, to best text books and multimedia courses, and finally, to best tutors). Such an in vestment, even when made only once, would have provided this proc ess with a chance for self reproduction even when the oil dollars run out (see below the substantiation for the corresponding recommenda tions concerning the development of the public education system).

Examples of the Implementation of National Projects in the North West Federal Okrug The process of the implementation of priority national projects is de veloping unevenly.

Karelia has been placed on the black list of regions where the pri ority national project Affordable and comfortable housing to the citi zens of Russia is being implemented with the worst results. As stated in the materials posted on the official website of the Authorized Represen tatives office of the North West Federal Okrug, this list also includes Pskov Oblast and the Republic of Komi.

The Governor of Leningrad Oblast Valerii Serdiukov declared that the equipment and motorcars being supplied were of poor quality. From the comments of Ilia Klebanov, made in this connection, it follows that such problems emerged because no attention had been paid to the region level opinions during the implementation of some of the components of the project Health. As a result, the lists of requested equipment differ from the lists of supplies, and the arriving supplies cannot be stored because no adequate premises have been prepared. Deputy Author ized Representative Galina Izotova noted that irregularities in the sup plies of vaccines resulted in failures to comply with the established vaccination schedules.

At the same time, some positive results of the implementation of na tional projects have also been observed. These are as follows: the level of salaries of medical personnel has been raised, which reduced the outflow of cadres, including young specialists; the level of qualification of the physicians working in the district networks has been improved;

the material and technical base of public health care institutions has been greatly strengthened; the introduction of the delivery certificate resulted in lower perinatal and maternal mortality rates. Due to the sup port provided to the primary care system, the staffing with micro district general specialists in Vologda Oblast in the year 2006 alone increased from 50 to 85%. The hospitals in Vologda received the amount of equip ment equivalent to 115 mln roubles.

According to Kaliningrad Oblasts Minister of Agriculture and Fishery Andrei Romanov, under the priority national project The development of the AIC the region received from the federal budget 4126.7 thou sand roubles to finance the development of livestock breeding, and 2308.8 thousand roubles to support small size forms of enterprising.

Examples of the Implementation of National Projects in the Southern Federal Okrug During the implementation of national projects in the Southern Fed eral Okrug, some positive developments have been noted, as well as certain drawbacks.

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