Monday, may 23, held the first meeting of the working group of the presidential Council under the direction of Alexei Kudrin. The ex-Finance Minister presents a plan for structural reforms that will achieve average annual growth of 4% of GDP. This is reported by “Vedomosti”.
Here are the key points of the plan:
pension reform, increasing the age of retirement to 63 years for both men and women (gradually, annually adding six months);
— reform the judicial and law enforcement systems, which will allow “authorities” to become more objective;
— the decrease in the state share in the economy (now about 60% filling of GDP, provides the public sector);
— reduce administrative costs in international trade;
fiscal consolidation and the redistribution of budgetary expenditures in favour of human capital development (health, education and science) and infrastructure;
— reform of public administration.
According to Kudrin, the Russian economy enough. In Saturday interview to TV channel “Russia 1” he said that in the accounts of Russian companies accumulated free resources, commensurate with their annual investment. “They’re even cheaper than Bank loans, because it is companies’ own funds. But they are not invested,” — said the Chairman of the Center for strategic research (CSR).
Other resources for growth Kudrin sees. As stated in the annotation to the “plan of salvation”, under the current structure of the economy GDP growth in 2017-2019 years is only possible due to the growth of the opportunistic component, and in particular the prices for raw materials. To accelerate growth to 4% in 2019, according to estimates by the economic policy Institute Yegor Gaidar, requires to attract in the economy of 4.5 million people and 40 trillion. rubles of investments in fixed capital.
The main challenge of budgetary policy, according to the Chairman of CSR, — adaptation to new conditions of trade through the reduction of the budget deficit to 1% in the next three years if you change the cost structure
Kudrin describes three options for fiscal consolidation by 2019.
The worst for budget — saving nominal expenses (of 15.9 trillion. rubles a year) with the GDP growth according to the forecast of Ministry of economic development (+0,8% in 2017, +1.8% in 2018, +2.2% in 2019), and annual inflation is 1 percentage point higher than forecast.
If we reduce the budget deficit to 1%, nominal spending will be reduced to 14.2 trillion. RUB Under the assumption that GDP growth will reach 4% in 2019, while budget expenditures will remain at a nominal level in 2016, the deficit will decrease to 0.8% of GDP.
The reduction of the budget deficit is the most important element of trust between government and business, according to a summary. In addition, a key factor for long-term development Kudrin calls low and predictable inflation is 3-4% per year.
For its part, the Ministry considers the program’s aim of achieving 4% growth in active investment policy. According to calculations of the Ministry, the optimal ratio between current consumption and investment: 22-25% of GDP investment in the coming years needs to grow at 7-8% per year, and the level of consumption is to stand still.
How effective is the proposed plan of action, whether it will support the Kremlin?
— Kudrin offers a number of activities in the spirit of “shock therapy”, — said the former Chairman of the armed forces of Russia in 1991-1993, head of Department of world economy of the Russian Academy. G. V. Plekhanov Ruslan Khasbulatov.
— Between there, life has repeatedly proven that such shocks can not play the role of catalyst for economic growth. It is no coincidence that this practice is refused and the United States, and Europe, preferring to act in the logic of the quantitative easing program.
In fact, the Americans, the whole world imposing neo-liberal rules of the Washington consensus (a type of macroeconomic policy that in the end of XX century has been recommended by the IMF and the world Bank for use in countries facing financial and economic crisis), do not really follow his logic and principles. In my opinion, Russia needs a completely different economic policy than that offered by the Chairman of the CSR.
“SP”: — What causes the issues in Kudrinskaya?
— Kudrin, like all neoliberals, is focusing on pension reform, as though this is a fabulous lever of economic growth. In fact, a significant impact on the development of the country, especially in the first years after launch, this reform will not have. Or to take the fight against inflation, which Kudrin considers key. This idea is already a quarter of a century, during which the fight against inflation was disgracefully lost on all fronts, and only choked the sources of growth.
In my opinion, those tools against inflation offered by Kudrin, have led to the current disastrous state of our economy. If you follow the current “plan Kudrin, the Russian economy will continue in a mode of permanent stagnation.
I’m not talking about the fact that Russia to achieve positive results we need not four percent GDP growth (this goal of Kudrin’s plan), and at least six percent.
“SP”: — What will happen to our economy?
— Our economic future seems to me in a sad light. The Russian economy is, I believe, is today under the control of ignorant people who are supporters of neo-liberal ideology.
If our economy and trying to climb out of the crisis is not due to the activity of economic reformers, and in spite of it. Every crisis has its limits, and most importantly — the millions of Russian citizens continue to work, despite the fact that their standard of living is markedly reduced. In the end, the process of adaptation of the economy to the current environment is Autonomous and not due to the efforts of the Russian government and “bailout” plans of economists-kudrintsy…
— Kudrin proposes a plan of action, it is appropriate to the requirements of the economy, ” says former Minister of economy, scientific Director of the National research University — Higher school of Economics Yevgeny Yasin.
I’m not sure that its implementation will cause a quick rise of the economy in the next two to three years. But for the growth we need fundamental institutional changes, and the Kudrin plan they are partially provided. That is why I support this plan — the measures listed in it are correct, and sooner or later they will have to do. I think, however, that the country’s leadership will go on sale Kudrinsky package just after the presidential election in 2018.
And you have to understand: going for structural reforms, you need to be prepared for the fact that the first steps to recovery will be insufficient. This means that in the future will require more serious measures.
In either case, quick results from reform will not happen. By my estimates, the healing process is exit to normal, more or less efficient functioning of the market economy, will require about 10 years.
“SP”: — Why Kudrin said about two or three years?
— Because he speaks of a purely economic measures, which will ensure the minimum growth. But for serious progress you have to solve problems, which largely lie outside the economy. In particular, to build a relationship of trust between government and business, between the security forces and businessmen.
It should be understood: for sustainable growth of the economy requires the rule of law. All market participants should firmly know that there is court above the government and the President, and there is an independent judiciary.
Today nothing like that in Russia, unfortunately, no. And to solve these problems for a year or two do not work…
— Hopes of the Russian expert community that the President would change economic policy, were not justified, ” says MSU Professor, doctor of economic Sciences Alexander Buzgalin.
— Looks like there will be no change, and moreover, will happen the strengthening the right-wing liberal economic policy. As evidenced by the recent appointment of Kudrin and steps that define his peer group. In this group, incidentally, was included almost all supporters of the right-wing liberal course.
As for the content of “Kudrin’s plan” and its main ideas — there is nothing new. In fact, it is traditional recipes of neo-liberal directions that are voiced from the beginning of 1990-ies. It traditionally goes about raising the retirement age and cut social programs that indirectly visible incomplete indexation of social benefits, plus the tight monetary policy as a means of combating inflation, which actually is a means of dealing with the real sector of production.
Kudrin’s plan does not provide for any steps in the direction of active industrial policy, redistribution of incomes of the parasitic super-rich oligarchic, first and foremost, groups of the population in favor of economic development and social issues.
In short, we are dealing with a standard package of neoliberal measures. So, expect something good from him for no reason…
