The major obstacle to local borrowing is the absence of reliable medium-term and long-term budget planning at the local level, because of the uncertainty surrounding the government policy concerning the allocation of taxes between the national and local budgets and the rate of budget withdraw'als (Makhmutova, 2006). Quotas for annual local borrowing and total local debt are fixed annually by the Budget Law. In 2009, the government determined new' subnational government borrowing limits (in a given fiscal year, annual payment and debt servicing costs were not to exceed 10% of the local budget revenues, and total debt 75% of local budget revenues).