Medvedev: The time for simple decisions has passed
1. Start
Exactly five years have passed since it became obvious: an economic crisis of a global scale is beginning. I remember well the first anti-crisis summit of the G-20 leaders in Washington. Those assessments that he gave himself and which prevailed in the speeches of colleagues (see box).
These findings were largely confirmed by time. But then no one else could have imagined the entire depth and duration of the crisis. It was suggested that the letter of the Latin alphabet would look like the dynamics of the global economy - W, V or L. The most attractive was option V. The most unpleasant is option W, when recessions and growth alternate. Today we see that the dynamics turned out to be close in shape to the square root - √. After the initial fall, there was a recovery growth, and then the developed countries moved almost to the horizontal line.
The debt burden remains prohibitively high in most G8 countries (except Russia). Including because its fast decrease is fraught with long stagnation. The European economy is balancing on the verge of recession. Growth has slowed in all BRICS countries. The US economy cannot fully cope with high unemployment, and many Americans are just beginning to crawl out of debt. The growth rate of the Russian economy also slowed down significantly. Today, Russian stock indices are at the same level as in early August 2008.
This development of the situation made it necessary to rethink the current anti-crisis policy. Let me remind you that the leadership of Russia has been taken to overcome the economic downturn.
The Bank of Russia moderately reduced the rate of the national currency and significantly expanded the refinancing instruments of commercial banks. This made it possible to maintain confidence in the ruble and prevent a sharp outflow of deposits from the banking system. The government has significantly changed the structure of budget expenditures, increasing funding priorities. They directly depended on economic recovery and the prevention of a sharp drop in domestic demand. Additional credit and guarantee support was provided to large companies. As a result, they were able to restructure their debts for a longer period and avoid massive bankruptcies. Active programs to support employment and small business, including in single-industry towns, were implemented.
In parallel with the implementation of the anti-crisis policy, we continued to implement priority national projects: the renewal of school education systems, primary and high-tech medical care began. We saved and indexed maternity payouts. All this made it possible to maintain an increase in the birth rate and prevent depopulation of the population.
After the 20-summer negotiations, Russia became a member of the WTO, adopting the general rules of the game. I got the opportunity not only to use them, but also to influence their formation. Together with Kazakhstan and Belarus, the Customs Union was created. Coordination within the framework of such associations as the SCO and BRICS has increased. We are learning to benefit from international cooperation, to use it in our national interests, without compromising the interests of our partners.
To sum up, the crisis has taught us a lot. We know what to do if the situation is unfavorable for the economy, and we are ready to be held accountable to people who have given us tremendous credibility. The correctness of our actions was confirmed by the election results. Unlike most developed countries, Russia has not changed the political force in power. This is the advance payment. (see table “Change in 2011 metrics.”)
And such work continued as soon as a new government was formed last May. I announced his seven main tasks for the first year. They included budget planning based on a rigid budget rule, the adoption of all major state programs, the fulfillment of social development tasks set by presidential decrees, the consistent privatization of surplus state assets, the full implementation of the road maps of the national entrepreneurial initiative, the intensification of civil service reform and the launch of mechanisms open government. " These tasks are solved. In a number of areas of activity of a medium-term nature, the planned implementation of all announced measures is underway. But in the process of this work, it became obvious that the situation in the global economy, and consequently the Russian one, is improving more slowly than expected.2. Steps
We predicted that GDP growth would remain at more than 3%. Including counting on a recovery in Europe (the EU accounts for half of Russia's foreign trade). But the depth of the debt crisis and the decline in the competitiveness of many European countries turned out to be so significant that, apparently, the real steady growth in Europe will have to wait another few years. As the famous American economist Kenneth Rogoff recently wrote, “growth is an illusory goal during periods of very high levels of public debt.”
I will list a few specific areas in which we were able to advance.
The first. The budget is formed in accordance with the budget rule. I will say frankly: it is not easy to work under such severe budget constraints. Next year we are forced to make a total reduction in expenses in the amount of up to 5% from the previously expected level. But a balanced budget and the absence of sharp fluctuations are more important.
The second. We have provided the docking of almost all program documents in individual industry areas - both among themselves and with the main parameters of the budget policy. As a result, the government has a balanced strategy of action for several years ahead, recorded in several dozens of government programs.
Third. The implementation of all key activities of the national entrepreneurial initiative is ensured. For the government, it is of fundamental importance that everything that we have agreed upon with the business community be done. This applies to tax and customs administration. Providing access to engineering infrastructure and competition. Government procurement and regulation of the construction market, as well as a number of other sectors of the economy.
Fourth. The support system for domestic producers is being restructured in accordance with the commitments made by Russia when joining the WTO. This was especially difficult to do in agriculture, which in recent years has become one of the drivers of economic growth. Nevertheless, we managed to put into practice the tools of the so-called unrelated support, and they are already working well.
The fifth. Decisions on granting preferential tax and customs conditions for the implementation of investment projects in remote regions. We are talking about projects in the Far East and Kaliningrad. On the development of shelf and other hard-to-reach mineral deposits. I expect that this will significantly increase the amount of investment in new production.
And the sixth (although the list of measures taken is far from exhausted by this list). The implementation of major infrastructure projects has begun, ensuring the unity of the country and its long-term sustainable development: new railways, highways, airports and seaports are being built. Including in the framework of public-private partnership.
3. Fork
Most of the measures listed will have a significant effect only in the medium term. At the moment, the situation in our economy is determined by adverse external conditions. As well as a load of still unsolved problems. Projections of economic development are rather pessimistic.
GDP growth rates in the current year are not likely to exceed 2%. Note, this is the first time since 2009 is lower than in the global economy as a whole. The increased costs of doing business (prices for products and services of infrastructure monopolies, wages, interest rates) make it unprofitable to continue production on a significant part of the old facilities, as well as to implement serious investment projects. (see table “August 2013 for 2007”)
The increase in production is supported almost exclusively by implementing large-scale investment projects with the participation of the state and companies controlled by it, increasing the incomes of public sector employees, expanding the scale of subsidies to agriculture and a number of other industries amid high oil prices.But this source of development is limited because of its dependence on maintaining a favorable oil market. The rigid budget rule is necessary for the guaranteed execution of all social obligations of the state. But in the future it makes it impossible to rely only on government demand. Therefore, it becomes critical to ensure sustainable sources of stable economic growth in the non-state sector of the economy.
I believe that the protection of private property and competition remain our unconditional political priorities. While the level of investment in the Russian economy is low. And not so much because of the specific "arithmetic" calculations of the potential return on investment. Investors still have irrational fears of working in an incomprehensible and sometimes unpredictable Russia. And also quite understandable distrust of public institutions. What is the saddest thing - including the judicial system, the law enforcement agencies. As FM Dostoevsky wrote, “capital loves calmness, both external and internal, it is not hiding”.
One of the reasons for this state of affairs lies in the fact that many officials, judges, police officers (although, of course, not all of them) still believe that state property (and therefore state-owned companies) has special protection rights. Incomparably larger than individuals. And the latter pursue exclusively personal interests, and therefore are suspicious and must be under tight control.
A vivid illustration of this is the situation in our banking system. On the one hand, it proved its resistance to the most serious crisis phenomena. Ensured - in cooperation with the state - the safety of citizens' savings. And this is definitely good. On the other hand, its structure is far from optimal. The five largest banks, directly or indirectly controlled by the state, account for 56% deposits of citizens and 53% of the loan portfolio of the economy as a whole. They have obvious preferences from the state, including state-owned companies, and enjoy its almost unlimited support. And almost a thousand banks do not have the opportunity to fully integrate into the state aid system. The result is a decreasing level of competition in the financial market [the absence of serious regional banks] and the highest interest rates that limit entrepreneurial and investment activity.
This is just one example characterizing the general situation with competition, the ratio of public and private sectors. This is not the case in any country with an advanced legal and political system. And we should get rid of this state of affairs if we expect to become a competitive country with a developed economy. Key areas of work are clear. This is a significant improvement in the business climate. This is a revitalization of national capital and a significant influx of foreign investment. These are measures for technological re-equipment of the economy. This is a new labor market policy.
In fact, we are at a fork. Russia can continue a very slow movement at close to zero rates of economic growth. Or take a serious step forward. The second path is fraught with risk. But following the first scenario - with the imaginary possibility of preserving well-being already achieved - is even more dangerous. This is a direct road to his loss. The road to the abyss.
4. Strategy
How does the government see the path of economic growth in Russia in the context of low global demand and intense competition?
It is based on three basic principles.
Firstly, it is necessary to provide entrepreneurs with maximum freedom to act, to take initiative. We need to reorient government support to create modern, efficient jobs. Including through the use of the entire innovation chain of development (from fundamental science to the commercialization of technology). Secondly, radically improve the efficiency of the use of all available resources, including an increase in labor productivity. Third, achieve good governance. To ensure the safety of citizens, the protection of property rights, the necessary social and physical infrastructure.
Compared to other countries with similar growth rates, Russia is in a unique situation. We have low unemployment. At the same time, in the coming years, our economy will have to live in the conditions of a decreasing number of the working population. So, with the growth of the tax burden associated with social and medical expenses on the non-working population, and the imbalance of the solidary pension system. With difficulties for entrepreneurs in finding staff. With distortions in regional labor markets.
In this regard, a new approach to the economic development of the regions is needed. Russia is strong in their diversity. It is necessary to allocate promising growth points and provide them with targeted support. Interestingly, in recent years, the pace of development of regions practically does not depend on the reserves of natural resources. The main factor is the ability of regional leaders and local elites to promote their territories. And without waiting for help. And seeking support for their initiatives - both in society and within the framework of stimulating federal programs.
Acting together, we can withdraw from the policy of maintaining employment at any cost, regardless of economic considerations. Characteristic (and often justified) during the crisis period. Of course, these measures should be carried out prudently. But the key to social stability is to create the conditions for professional growth, and not to preserve what has already passed its age. Preservation of social stability and modernization of the economy are interrelated, and not mutually exclusive processes.
Further cuts are required with the transition to recruitment of the Armed Forces and law enforcement agencies mainly on a contract basis. Improving labor efficiency in the public sector. Promoting late retirement of skilled workers.
Entrepreneurial freedom, a healthy competitive environment is a prerequisite for modernization and innovative development. Most of the twentieth century, despite the many dramatic events, our country was one of the foremost in the world. In some areas undisputed leader. I am sure: Russia can again take these positions by making a man, his intellect, his ability for creativity the driving force of the development of society. Nevertheless, it would be wrong to copy the recipes that worked in the past. The world went ahead. New methods should be used by us.
I consider it crucially important to bring a new level of fundamental and applied science, return to the leading positions of our education, eliminate digital inequality. I am sure: the state will continue to play a leading role in solving these tasks. But it is necessary to do it faster than before. Including by attracting private investment.
It is necessary to create a system for the reproduction of commercially demanded new technologies, leading to an increase in labor productivity, improvement of environmental safety, and convenience for consumers. The main obstacle is the quality of our regulatory environment. In the coming months, we will complete the formation of the necessary legal framework.
Today, our access to leading foreign technologies is limited. For various reasons: policy, customs regulations or regulation. Importing any technology to Russia is more expensive than our competitors. I consider it possible to reset the duties on scientific equipment and materials. Expand the practice of providing grants and subsidies from the budget for the import of scientific equipment, spare parts and materials for scientific research.
We will continue the development of the innovation center in Skolkovo and the implementation of other innovation projects, technoparks. Our large companies and investors should invest more actively in science. Create your own universities. Let there be universities of Gazprom and Lukoil, Rusal and Rosneft. Or, at least, the department. And the state should think how to stimulate such investments. Perhaps - by reducing taxes.
By and large, such investments are beneficial to entrepreneurs themselves. Indeed, today, unfortunately, almost every project stumbles over the question - and who will work? Is today the average Russian ready to meet modern requirements in the labor market? We know the answer to this question, and, unfortunately, it is not always positive.
Against the background of slower economic growth, we must ensure that the state does not unreasonably occupy much space in the economy. And the state apparatus did not create unnecessary obstacles to business. I am convinced that state bodies should concentrate on the performance of their main functions. Hire non-governmental organizations to perform other functions or completely withdraw from the relevant areas. Continue increasing the transparency and accountability of the state to society. The introduction of institutions of public control, public discussion and adoption of state programs, as well as the transition to a federal contract system, have become important steps in this direction.
Our long-term goal is to build a smaller, decentralized but most efficient public sector. The situation is unacceptable when labor productivity and return on investment in it are several times lower than in comparable segments of the private economy. Improving efficiency is impossible here without additional investments in fixed assets and staff training. But it is necessary to strive to increase efficiency and current expenses, primarily for the procurement of goods and services. And in some cases, just stop spending taxpayers money on inefficient projects and institutions.
5. Solutions
In conditions of increased competition, the key factor in ensuring the competitiveness of Russian companies is the reduction of their costs. The most important area of work here is the tariffs of infrastructure monopolies. The topic is very difficult. But few people argue with the fact that high tariffs impede most of the Russian business, retard economic growth.
First of all, the transition to long-term tariff setting principles will be implemented. And the budgets of the largest monopolies will be taken under public control. Regarding the near future, the government decided to abandon the indexation of tariffs for basic infrastructure monopolies in 2014. Then, two years in a row, these tariffs are supposed to be indexed to the prevailing rate of inflation. But this must be done without reducing the justified investment programs, that is, without violating the rights of consumers of infrastructure monopolies.
Tariffs and prices of most other infrastructure companies (in the public sector, in the communications industry and on passenger transport) will be indexed in the coming years according to the “inflation minus” formula. The parameters of such indexing may be different depending on the starting situation. And also under the influence of individual structural decisions. These include minimization of cross-subsidies in the power industry, gradual liberalization of the gas market and the introduction of the social standard of consumption of certain utilities, modernization of postal services.
In parallel with the rejection of uncompetitive industries, we are vital to the emergence of new businesses that provide effective jobs. This is the meaning of the modernization of the economy. In this case, the main focus will be on supporting small and medium-sized businesses.
First, the decision on a significant and immediate increase in compulsory insurance payments was adjusted. Rates will increase gradually. I emphasize that this is not about increasing the tax burden, but about the proper level of insurance for employees of small enterprises. They should have the same rights as employees of any other organizations.
Secondly, the benefits for small businesses in the field of information technology are expanding. From 2014, they will be provided to companies with at least seven (previously - at least 30) employees.
Thirdly, I consider it expedient to give regions and local authorities the opportunity to introduce tax holidays for new small enterprises in certain, primarily industrial, areas of activity. This measure has been applied in many countries. Of course, its use is fraught with tax evasion by unscrupulous individuals. I believe that with a proper control system, these risks can be minimized.
Fourth, the financial support of small and medium businesses will be expanded. Vnesheconombank - due to a deposit from the national welfare fund - will begin funding investment loans to small and medium-sized companies. And the Bank of Russia - refinancing such securitized loans.
In addition, the guarantee support of small enterprises will be significantly increased, including through the creation of federal and maximum use of regional guarantee funds.
Fifth, based on successful foreign experience in the system of state and municipal procurement, as well as in the framework of procurement of large state-owned companies, quotas for the purchase of goods and services from small and medium businesses should be determined.
Finally, it is especially important to implement programs to support small and medium-sized businesses in single-industry towns. It is necessary once again to carefully analyze how the special programs adopted earlier for such localities work. Where necessary, create practical mechanisms for their financial and organizational support.
In general, the government has provided for these areas in the draft three-year budget funds in the amount of more than 100 billion rubles.
But the matter is not only and not so much in state support of business. More significant for business is the problem of long and cheap money. The government and the financial mega-regulator recently created in the structure of the Bank of Russia are preparing measures to protect pension savings and expand their investment areas. In the spring, the government announced a package of tax measures aimed at stimulating long-term investments by retail investors and the development of a national financial industry. I expect that this fall, the State Duma will consider the corresponding bill.
We will ensure macroeconomic stability, implement measures to develop the financial market, and transform Moscow into one of the international financial centers. We will continue to create a comfortable environment for long-term foreign investment. The policy of the Bank of Russia on the transition to targeting inflation and a floating exchange rate will help solve these problems, including the emergence of really long money in Russia.
6. Future
The world does not stand still, and global competition will be tougher than before. For Russia, it could become historical a chance to change its role in the international division of labor. We stand out against the background of other countries with low indicators of debt load and a high level of reserves.
But the time for simple solutions has passed. The economic challenges that we face today cannot be underestimated. We have a difficult path ahead. We need to continue to move towards a post-industrial economy in difficult crisis situations. To a smart state, the main value of which is a person.
We need to go on the trajectory of sustainable development. At the same time, to maintain the achievements of previous years in poverty reduction. By the support of the least protected citizens and problem areas.
But such a state cannot be built only by the efforts of the authorities. A socially responsible person is her full partner in this difficult job. Moreover, the awareness of this responsibility does not depend on social status: a worker, a first-year student, an academician, a businessman, and an official should have this quality. The state should change only with people. Over the past year, the government has radically expanded feedback mechanisms with civil society and business in making major policy decisions. We are interested in constructive community initiatives. In the course of agreeing on the majority of decisions, we are consulting with business and experts. The activities of departments are now more accessible to public scrutiny. “Open Government” has become a fact of our life. We will develop this format. The same must be done at the regional and municipal levels.
Working together, we must make a serious step forward. Implement the plans. With honor come out of the difficult economic situation in the world. And as a result, create a strong Russia, which ensures a high quality of life.
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