Experts: Russian economy needs changes

Experts: Russian economy needs changes

Russia has all the necessary conditions for the recovery of economic growth, but it is necessary to fundamentally change the approaches to the regulation of the economy and the economic model to move from words to actions. Such an opinion was expressed by experts during a brainstorm dedicated to the present problems of the Russian economy.

Thus, an Academician of the Russian Academy of Sciences, Sergei Glazyev, drew attention to the fact that business is ready to provide economic growth in Russia, but completely different factors prevent it. "The average level of capacity utilization is 60%, which means 40% of this capacity is stuck. On the basis of the available production capacity, we should have growth of 10% per year, so the current recession is due to the adverse macroeconomic performance, not because of the lack of opportunities for growth. There are no restrictions either on raw materials or the labor force in Russia, but there is a problem with scientific and technical progress. For example, our use of intellectual resources doesn't even reach 25%, a large number of knowledge workers are migrating," the correspondent of Vestnik Kavkaza cited him as saying.

Among the disturbing realities is the excessive volatility of the ruble. "It destabilizes the economy and makes investment planning impossible. For the majority of manufacturing enterprises it is almost unachievable to take out a loan. Let me remind you that the key to economic growth is the growth of investments, but in a situation of artificial interest rates, companies are forced to either raise prices or close production. Meanwhile, all the developed countries are building up long-term loans. But we still have an archaic monetary policy," Sergei Glazyev noted.

The academician explained that the development of the scientific base could effectively reduce inflation in Russia, we are fighting it by raising the key rate, which is followed by a sharp slowdown in Russia’s economy. "Macroeconomics is unmanageable today and the forecast for the next three years is disappointing. With such a monetary policy we should expect a further crisis and capital flight. In addition, sanctions were imposed," he listed other problems of the Russian economy.

In this regard, Sergei Glazyev called for the establishment of the strategic indicative planning. "The business community must work together with scientists to develop innovative and profitable projects. Of course, the state should help by creating a stable macroeconomic situation and issuing long-term loans.The state has all the necessary institutions," the academician concluded.

The First Deputy Chairman of the Federation Council Committee on Economic Policy, Sergei Kalashnikov, called for a change in the Russian economic model, because "proper measures won't work without it". "In my opinion, we need just one law for small businesses: we should make no laws for small business for 10 years. The fact is that the ever-changing conditions do not allow business to relax and develop. There is a speculative economy in Russia, which does not allow us to move forward. Of course, we need to modernize the economy, but it requires thinking for decades to come, but we still do not have an answer to the question of what can make Russia competitive?" the senator stressed.

The director of the Institute of Strategic Analysis FBK, Igor Nikolaev, in his turn, proposed to move from words to actions. "We have a structural crisis, which requires structural reforms. Russia is still an extractive country, which depends on the external environment. The structural problems that we solve are so complicated that we cannot quickly correct all the fails," the expert warned.

"Taxes should not rise, they should be declined unevenly, for example, we can select a micro-business, which will not pay taxes at all. It is necessary to revise budget priorities, abandon such measures as the destruction of sanctioned products. We can also lift our anti-sanctions: consumer power has decreased very strongly, the real income of the population has dropped," Igor Nikolaev listed.

The head of the macroeconomics and finance department at the Center for Macroeconomic Analysis and Short-Term Forecasting, Dmitry Belousov, expressed confidence that the Russian economy is no longer controlled by the oil factor. "We are in a situation of serious economic recession, affecting not only GDP, but also the main sectors of the economy. We have an investment crisis. There is a lot of production capacity in Russia, but there are not so many competitive businesses. Let me remind you that the ruble started to depreciate in 2013. Wages began to fall simultaneously, but enterprises started staff reduction without indexation of employees' wages. According to opinion polls, two groups of the population have significantly suffered: those who can afford food products, and those who have no money for it," he said.

The deputy director of the Institute of Economic Forecasting of the Russian Academy of Sciences, Alexander Shirov, conceded that now Russia cannot withstand market crises. "Now we cannot oversee the main problems and expect that the crisis will start declining. There is a problem that the most important support for the economy, consumer demand, has also fallen sharply. In addition, we cannot expect significant growth in natural resources. The only significant source for economic growth is investment capital, as the current crisis is a crisis of the financial mechanism of economic growth,'' he agreed with Dmitry Belousov.

Therefore, according to him, the first task is to restore economic growth. "We need to understand how we will achieve positive economic dynamics. We have big businesses and it is ready to turn their money into investments, but we need to create a new approach to the economy that hasn't existed up to now. The volatility of the exchange rate has a negative impact on the economic dynamics and the devaluation race has led to the fact that we suffer losses in the real and financial sectors of the economy,'' Alexander Shirov stated.

"As long as the real decline in living standards is not observed, while a redistribution of costs is taking place. If nothing changes, the standard of living will fall after a couple of years. At the same time, the mechanisms of economic recovery are investments of large companies and bonds. We are entitled to expect about 4%-GDP-growth in 2020-2025," the expert expects.