Russia's government has dramatically reduced the amount of financial information it releases about its oil and gas industries, key elements of the national economy.
A decree signed on April 21 by Prime Minister Vladimir Putin suspended the requirement that the ministry of finance publish information on its website about the assets, revenues and expenditures of Russia's two oil funds–the Reserve Fund and the National Welfare Fund. The suspension remains in effect until February 1, 2012.
The same decree suspended the ministry's obligation to release information about oil and gas revenues, including data on how they are spent and information about transfers to or from the two funds, until January 1, 2013.
These are significant steps backwards from the government's previous, relatively comprehensive public reporting of financial data on the oil, gas and mining industries. The 2010 Revenue Watch Index, which marked the first attempt to measure and compare the information governments disclose about those industries, ranked Russia in the highest of three tiers for transparency.
The change in policy may be due to the effects of the global economic crisis on the country’s economy. Russia's GDP plunged by about eight percent (in real terms) in 2009, leading to a sizable budget shortfall and forcing the government to use savings from its oil funds to finance the budget deficit. When conditions seemed about to worsen, the ministry of finance warned that the Reserve Fund might be emptied to bridge the budget shortfall by the end of 2010.
Presidential politics may be another factor. With elections scheduled for 2012, the Kremlin maintained the pace of government spending, creating the need to spend more oil and gas revenues. Authorities may have decided as a result to disclose less about those funds, on the assumption that reducing disclosures about oil wealth could reduce public interest in how the government spends that wealth.
However, this approach also fuels speculation that the government has something to hide and is seeking to avoid responsibility for its actions. The decision not to fully disclose information about oil and gas revenues can increase public distrust.
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