Photo: Oleg Yakovlev / RBC
The acceleration of the Russian economy will not prevent disappeared the dependence on oil, the weakness of public administration, financial exclusion, said Alexei Kudrin. It listed the steps required for more rapid GDP growth
Russia’s economy remains extremely dependent on oil prices, this problem will not go away. This was stated by the Chairman of the Board of the Center for strategic research (CSR) Alexei Kudrin in the course of the April conference of the Higher school of Economics (HSE), the correspondent of RBC. “So while the oil price is low, we will have low growth. We switched from the old models of our economy. New has not appeared yet”, — Kudrin said.
Another obstacle is “very weak” condition of public administration, which does not allow to arise the incentives for development. In addition, there are demographic problems, namely the reduction in the number of able-bodied population of Russia. The country is still in financial isolation because of the sanctions, Kudrin said, is a “substantial restriction” which is felt more and more.
Dependence on oil is not so high, said Kudrin, Finance Minister Anton Siluanov said, it is clear from the balance of payments. According to the Central Bank, exports of oil and oil products in 2016 reached $120 billion and 42.5% of the total merchandise exports of Russia and 133% of net exports.
CSR is developing a program of development of the Russian economy until 2035. Kudrin is not yet fully revealed the measures laid down in the document it needs to be presented in may. At the same time program to accelerate the growth of economy is preparing the economic development Ministry.
In the first two or three years, the reforms should improve the credibility of the programme of action of the government, this will become a key factor in their success at this stage, Kudrin said. Then, from 2020 to 2026, we need to focus on building investment (growth of investment should be the main item in the programme of economic development, said earlier the head of Department Maxim Oreshkin). However, it will not help to achieve the desired growth rate of 3-4% per year. “So we need to increase competitiveness, which for this period should accrue, and, in order to become more sustainable, a significant increase in performance,” — said Kudrin.
Competition programs or coexistence?
In past years, economic strategy has been a maximum of 40%, estimated Kudrin. We developed two policy documents from the CSR and from the Ministry of economic development, and it is not clear how they will interact among themselves, who will be given priority and discussed on our conference the head of RSPP Alexander Shokhin. “Maybe they perform different functions: one programme for government, the other is the basis of the election program of the presidential candidate. Name calling will not all guess who”, — said Shokhin. RSPP has suggested to the President to accelerate the adoption of a programme to increase predictability for business, he added.
From consumption to productivity
Forecast CSR, as can be seen from the table, which was presented by Kudrin positively than the Russian and foreign institutions. If the Ministry of economic development in the target scenario expects acceleration to 3.1% in 2020, expectations of CSR in the same year and 3.6% respectively. It is possible to achieve growth of 4% to 2025, explained Kudrin. It will happen due to the increase of the basic capital (1.1 to 1.2 percentage points to economic growth), additional use of labour resources (by 0.2–0.3 PP) and the so-called total factor productivity (0,7–1 percentage point), which primarily will be based on the change in business model.
Household consumption, which in previous years was the main driver of GDP growth, will go with the first plan. In the coming years it will be replaced by investment, and then performance, Kudrin said.
The real exchange rate of the ruble will grow by 19% by 2035 relative to the reference level of 2010. By 2020, the devaluation effect for the Russian economy leveled predicted Kudrin, from-for it Russia will be harder to earn on import substitution.
Forecast CSR involves the growth of exports because domestic demand to ensure the sale of Russian goods can not. However, as can be seen from the data of the CSR, the share of oil, gas and oil exports, will still be at a high level, although declining from 52% in 2017 to 37% in 2035-m. But will increase the export of machinery and equipment.
In Russia very low level of trust in the government, echoed Kudrin, but the success of the reforms depends including from trust. The need for reform of public administration, explained the head of CSR, it should include personnel reform, process optimization, digitalization, “modern control system modifications”. The number of powers of state bodies has doubled since 2003 and continues to grow, expressed concern about Kudrin. The inefficiency of forcing the state “to grab new powers”, which do not contribute to productivity growth.
Another measure, which, in the opinion of the CSR must apply the state — the release of private initiative: reducing the state’s share, new competition policy, support for small and medium businesses. Now tough competition is only for the administrative resource was noted in the presentation. The government after the sale of a package “Rosneft” in the coming years do not plan major revenues from privatization, said Kudrin, but these plans need to change.
For economic growth required the decentralization and effective foreign policy, Kudrin concluded. The last thesis means policies for socio-economic development, without excluding, however, the “strategic autonomy in security matters”, as well as participation in the formation of new rules of global trade and “ensure the systematic protection of Russian interests from violations by the partners for its obligations.”