Last week the ministry of economic development let know that the government is not going to struggle with inflation. Instead, it is disposed to concentrate on another task – struggling with its consequences through distribution of compensations to poor groups of population. What is more important for the new cabinet is increase of investments into economy. And let others, the Central bank in particular, carry on struggle with inflation. 

At first sight, it’s purely economic logic that causes such proposals. Really, there are suggestions of increasing the role by the Central Bank in the struggle against inflation, giving it the new instruments that are to be legalized. Similar ideas have been voiced recently by Vladimir Viughin, deputy director of CB. Besides, there is a positive experience by a number of countries where central banks play more significant role in the struggle carried on against inflation. So why not try it here too? The question, however, is whether the Russian CB is ready to get armed with new instruments and to use all that in practice.      

The circumstance is noticeable that the state structures regard with favor such ideas. Besides the economic logic they are guided with political one. Really, it is obvious that the just-formed government and the new prime minister, who is on the peak of his popularity, they would like to keep it on. Significantly, they state about their intentions to keep the earlier made promises about the growth of spending on social needs. And people have got used to the growing incomes and social benefits, even considering this growth is not too big. Besides, the propagandist machine is trying to convince people that everything is going alright in the economy. This is why people mass are not ready to any turn towards moderation for the sake of struggle with inflation – all that is just beyond people’s expectations.      

And the increase of investments would work for popularity going up not only with people mass, but also with different business groups who anticipate huge budget money and are getting active in struggle for receiving it and are beginning to propose grandiose projects of transformations in the national economy.   

There is no doubt that under conditions of today’s Russian economy, where success is based on export of energy carriers and exploration of huge flows of petroleum and gas dollars, the growth of inflation rate is inevitable. This current wish to pass the struggle with it to the Central Bank means the government not only does not want but also is not able to cope with this task. Political logic is obvious here. Let the government and the prime minister perform only those functions that work for keeping up the popularity, while the opposite things be passed to other power structures and institutions.   

This logic is solid. However, there are still doubts that it will work in practice. The matter is our public opinion is used to blame top persons, and not high ranking officials, for the economic hardships occurring. Of course, one may dismiss the chair of the Central Bank at any moment for the inability to handle the inflation. But would that help soothing the public passions and would it shift the responsibility away from the top persons?