Russian government cuts spending on digital economy

Russia's national digitisation programme will supposedly receive only one-third of the previously announced sum, according to recent data. Moreover, a substantial part of this money will be allocated to governmental needs such as controlling tech innovations.

The Russian government has slashed funding for the domestic digital economy in favour of the army, the police and government officials, says Bitsonline citing the latest budget statistics published by Vedomosti news outlet. It seems that the national digital economy development programme adopted last year will acquire three times less money than it was previously planned.

Earlier, it was announced that Russia's top officials planned to allocate as much as 3,5 trillion rubles (over $50 billion) to the domestic digitisation project. However, this year's government budget envisages correctives to the plan: the new allotment for the national digitisation programme will be 1,2 trillion rubles (about $17,8 billion) until 2024. This is orders of magnitude less money than government officials, police officers and soldiers will collectively consume during the same period, says the source, adding that 233 billion rubles ($3,5 billion) will be spent on ''surveillance controlling activity'' and for ''IT-education for bureaucrats'', while information security projects are meant to receive only 18 billion rubles ($267 million).

Meanwhile, the Russian government is flexing harder on Internet use by imposing restrictions on anonymising equipment, VPN services and other technologies. According to Deputy Prime Minister Maksim Akimov, the ongoing regulatory work around Russia's ''digital economy'' will be devoted less to the economy and more to reducing the Russian people's ability to protect the independence and privacy of their online activity. Russian legislators are currently working on a law that would allow domestic private companies to collect, store, use or sell clients' private data without warning.

Russia's Digital Economy Evolvement Plan was adopted in 2017. Photo:

''Digital economy is about data and people. It's not only about IT. And it's not about financial technology. Many think that the digital economy equals blockchains, cryptocurrencies and such. It's not like that, it's about different things. It's about how a mechanism of collecting, sorting and transmitting the data changes our usual thoughts about how business models work, about the everyday life of ordinary people, how this brings new things into the people's lives,'' Akimov said in an interview in May 2018.

Russia's Digital Economy Evolvement Plan started back in 2017, and, according to former Russian Prime Minister Igor Shuvalov, President Vladimir Putin was very excited about the programme. The president has repeatedly emphasised the importance of the digital development of the country's economy, for example, in his post-inauguration speech in May 2018.

By Anna Litvina