Dmitry Medvedev outlined the priorities of the development of the national economy in the coming years.
Despite the government measures, living standards of Russians fell. In the future, our economy will not only earthquakes, but also structural adjustment. This was written by Prime Minister Dmitry Medvedev in the article “Socio-economic development of Russia: the appearance of new dynamics,” published in the journal “Questions of Economics”.
The article appeared in a scientific journal, and claims to be a comprehensive analysis of the state of the economy over the past few years and its prospects in the future.
The article begins by stating the major changes occurring in the world. According to the Prime Minister, the new times has led to a new reality. In particular, the emergence of a global financial market where huge amounts of money can move from one point to another planet instantly, combined with low control over the functioning of this market. Says a lot about the global crisis of 2008, which hit Russia.
It recognizes that “a major factor in low rates are the structural problems of the Russian economy, the escalation of which was the result of the superposition of two circumstances. On the one hand, he is the global crisis that led to new system calls. With another — the exhaustion of the model of economic growth of 2000-ies — in fact, the recovery model, based on the involvement in the production of spare capacity and labour, and growing external demand for Russian commodities.” Medvedev notes that “a significant decline in growth began well before the fall in oil prices and the sanctions against Russia”.
This is an interesting chart, which shows the difference between the growth of household consumption in recent years and the growth of the national economy. At the same time on the chart you can see that now the size of GDP is actually at the level of 1990. However, this article is not to make any conclusions. Apparently, it’s a shame to admit that a quarter of a century was actually a waste of time. Because the whole world is at this time not standing in place, and actively developed.
If you take the forecasts of the Ministry of Finance in the coming years, the stagnation will continue and we will lose even more.
How to change the situation? Russian Prime Minister proposes ambitious plans. First, you need to invest more in infrastructure development. “We need investment — private and public, internal and external. Investment at this time should be the driver of economic growth — more important than the growth of consumption and export demand. The output of Russia on the path of sustainable growth requires increase of share of investments from the current 20% of GDP to at least 24%,” — says Medvedev.
Thus, according to the head of the Cabinet of Ministers need for fiscal policy to focus on investments in people: to develop education, health, increase life expectancy of citizens.
At the same time should be made more efficient and less costly state apparatus. Of course, it is necessary to abandon the costly but promising benefits of projects to increase the stability of regional and local budgets.
As noted by Dmitry Medvedev, this is impossible without structural reform, moving the economy from dependence on raw materials and development of small business.
“The complexity of the tasks that need to be addressed, the scale of the challenges that need to be answered, especially in low-resource settings, require from the government a very precise action. We have no way to experiment or just be wrong. All decisions should be as efficient as possible,” concludes Prime…
But whether conceived to put into practice? Of talk about modernization in recent years there have been many. Something has been done, but in General the current crisis has hit our citizens. This is recognized by Medvedev himself.
Moreover, there is a dissonance between the strategic objectives identified by the President and the head of government, and specific proposals of the ministries. For example, recently the Ministry of Finance proposed not to index three years of pensions to working pensioners. Now, after just two weeks, the government proposes to 2019 to raise tariffs for housing and communal services at the rate of inflation. But all this can only lead to a deterioration of people’s lives. Not to mention the fact that raising rates is itself strongly accelerates inflation. And certainly the draft budget for next year, which will soon be considered the new State Duma, too, will be based on the principle of spending cuts and savings in the social sphere…
In my opinion, consistency is not visible even in government statements. And consistency of policy to say even more difficult, — says head of Department of economic theory, Moscow state University Andrei Kolganov.
You can’t say that our economy is “in tatters”, it just stagnates. People’s living standards fell, the employment is not in a very brilliant position, domestic demand had declined. Overall, nothing good to see. Our economy has not collapsed, but it works at a very low level.
We need a more effective state apparatus. Not in the sense that there are not enough experts, they simply need greater responsibility of officials for the achievement of goals.
You need to change the structure of budget revenues. It is necessary to increase the taxation of ultra-high personal income and to provide tax relief to those entrepreneurs that are engaged in the modernization of production. We need to change and monetary policy, to increase the level of monetization of the economy. This requires the creation of special development institutions, which would channel financial flows to the goals of modernization.
All these measures are interrelated. No responsible government can neither tax efficient nor the creation of development institutions.
“SP”: — the Prime Minister drew attention to the fact that in many countries, the stagnation, the world is changing, and Russia is no exception.
— Of course, the world has changed. The creation of a global financial market regulation weakens the national economy. The direction of international financial flows can greatly undermine state efforts. But this does not mean that the government has no instruments, and the old mechanisms stopped working.
Conditions have changed, but this does not mean that we should abandon the system policy. They say that the world has changed, and we can only control inflation, but we more than anything is not enough.
If we look at China, there is an active state policy is conducted. The Chinese manage to build the national economy, regardless of the world market. Although, of course, the world market influences China very much. So the possibilities in Russia too.
— All results who receive the management structure must depend not only on external factors but also on the professionalism of the staff — Advisor of the rectorate of the State University of management, Deputy Chairman of the Association “Analytics” Professor Oleksandr Turchynov.
— Economic problems are directly connected with the staff. The President stressed that it is impossible to carry out reforms at the expense of deterioration of life of citizens. There are issues with the composition. Not only the higher echelons of power, but also the middle and lower “floors”. Much lies in the fact staffing that exists today.
I don’t want to say that the staff is bad. Simply, there are people fixated on certain methods. They believe that the old ways can give a positive result, and therefore does not turn either to one side or the other. But life is so multidimensional, that the views of managers are outdated. Problem frame at the level of preparation and decision-making.
You can not blame everything on external circumstances. Is it not possible to assume that there will be circumstances when we will conduct our own independent policy? You can’t always count on a favorable situation around.
We see the failure of analysts. So, again, everything depends on the professionalism of staff. By the way, and the Soviet Union largely lost because Analytics was not installed in the system of public administration, and needed an objective picture of the situation. We are now in a similar situation. We have the euphoria that’s surrounded by colleagues, friends and partners, then suddenly the companions turn back to us.
Cause of turmoil in the economy in the country. Biased analysts who sit around the government largely contribute to the adoption of incorrect decisions. That one will do not, then more. Then one of them will write that nobody wants, then write a different strategy, where some risks and threats and no real steps to develop. The real plan came in 2012, when the President signed the “may decrees” and outlined, in what period what results must be achieved.
“SP”: — Maybe the problem is not only in frames but also in the system of their selection?
— Of course, it’s in the personnel policy. For the positions taken on patronage, on the principle of “friend or foe”. Do not really work mechanisms stipulated by the legislation on public service. Therefore, the positions occupied by the people who are have no experience and nothing to offer. But their move, help them build a career.
“SP”: — Is to form another system in the current environment?
— There is the example of China. There for centuries were another branch of government, which were selected and examined by officials. There was a Ministry of personnel, which is now called the Ministry of labour.
In many countries there is a system of management of the public service. One of the important components — the selection of personnel.
We have, unfortunately, each Minister steers as he wants. Therefore, departments and agencies are not always people who are ready to fulfill the tasks before them.
At the current stage, you’d think at least on the public discussion of the figures, coming to the position from which depends the development of economy, science, industry. Today the legislature is often not involved in the selection of candidates for the post of a Minister. It from a professional point of view, not political bias of a person. Unfortunately, the selection of personnel takes place in the shadows. And then we get one Minister, second, another. Well, if the person is professional and something can be done. But if he just came to “try”? Such, alas, are very much on different levels.
