Structural crisis and the Russian agenda
The peculiarity of our time is the formation of new priorities, new challenges and new approaches to solving the problems that arise before Russia and other countries. This article is an attempt to analyze the large-scale changes taking place today in the world economy and directly affecting the situation in our country. On the one hand, they create opportunities for accelerated development and at the same time set limits that we have to reckon with.
Therefore, there will not be a detailed program of action or description of specific economic instruments. There are other formats for this. First of all, these are the decisions that are prepared and made by the president and the government almost on a daily basis. Of course, one of the main policy documents remains the main activities of the Government until 2018. And our operational work is built on the basis of the Plan of priority measures to ensure the sustainable development of the economy and social stability in the 2015 year, which is often called the Government's Anti-Crisis Program.
In the presence of various points of tension, local, regional and other crises in the world, an unstable state remains, from which there is no quick exit. Speaking, including about the situation in which Russia finds itself, it is hardly possible that its rapid deterioration (although this was precisely what we were predicted recently), and a quick access to the trajectory of such growth, which was characteristic of the previous decade. This is not only a matter of geopolitics and not of sanctions - they can only explain a part of the problems. Geopolitics and sanctions themselves are the result of more general and fundamental reasons - a profound transformation of the world order system.
What is the particular complexity of the tasks facing Russia? It’s not just a matter of overcoming the current or long-standing difficulties, crisis, deficits and disproportions. With all the importance of this work, under all the difficult circumstances of today, it is important to formulate for ourselves the strategic goals, the tasks that we want to finally solve. Even if the goal looks very close, and the solution is very difficult. Although this goal is formulated quite simply: to enter (I would like to say: “make a breakthrough,” but military terminology is hardly appropriate here) in the group of countries with the highest level of well-being. Presence in such a group is determined by the size of per capita GDP and the associated level of economic efficiency, an indicator of which is primarily labor productivity.
In many socio-economic parameters, in terms of the development of human capital and culture, Russia is undoubtedly one of the developed countries of the modern world. However, the Russian economy still remains largely ineffective, lagging behind, for example, in terms of labor productivity from the leading countries not by percentages, but several times. And this problem is not only the last years or even decades. Neither the centralized administrative economy with absolute domination of the state, despite all the sacrifices made, nor the subsequent inertial-raw material model allowed this lag to be reduced, although the gap in the last 10-15 years has definitely decreased.
The development of Russia is an integral part of global processes. The global agenda cannot be formed without the participation of our country.
It is in such a historical and economic context that the mentioned strategic objectives can be assessed as unprecedented. It is unlikely that they can be solved by remaining in the inertial, in fact, development model and only reacting to some degree to external circumstances. As the practice shows, no so-called “catching-up development” takes place along this path. But there are risks of growing backlog.
These risks will increase if the main efforts are directed only at explaining the existing problems only by objective circumstances. For example, the length of borders, climate, distance or sparsely populated areas. All this is not a sentence, as evidenced by world experience. Canada and Australia are among the highly developed states, despite the small population and the vastness of the vast territories. And Japan, on the contrary, does not have free territories and significant natural resources with a huge population. In any situation, in any position, with any resources, you can, if you wish, build a pyramid of “objective circumstances”: a lot of land is bad, difficult to master, little land is bad, there is no place to live and sow, few minerals are bad, the dependence on their imports is high , a lot of minerals are also bad, the rest of the economy is not developing, few people - not enough labor resources, many people - it is impossible to feed everyone ...
Achieving our goals requires major reforms. This is obvious to everyone today. We will have to switch to a development model that will allow us to compete more successfully than before. This is not the old paradigm of "catching up and overtaking" in meat, milk, tractors and cast iron. We must learn to be better and faster, and this is the only path to the goal in today's changing world.
Another thing is that the reform of the commodity economy, when the prices for commodities are at such a low level, need to be balanced and carefully. First of all, think about how these reforms will affect people. The state should honestly and without any illusions assess its ability to support those who find it difficult to adapt to new conditions.
The situation is changing very quickly, and not everyone is ready to quickly accept these changes. Someone by virtue of psychology, and someone - for objective reasons. Children, disabled people, elderly people, families with low incomes - these are the social groups in which we must first of all “try on” our future decisions.
Structural changes in the economy and the social sphere, in the labor market are always painful. But additional difficulties arose due to external factors. And therefore, the Government today has the task of “double difficulty” - even in these difficult conditions, while carrying out structural changes, to prevent a serious decline in the standard of living of people.
The development of Russia is an integral part of global processes. The global agenda cannot be formed without the participation of our country. But Russia cannot alone form a global agenda or simply ignore it, focusing only on its own understanding of success and justice.
Head of Government at the First All-Russian Forum on Food Security in Rostov-on-Don. Photo: Dmitry Astakhov
World we live in
When discussing current and future problems of global development, the term new normal has become increasingly used. It appeared five years ago after the acute phase of the global crisis, and quickly gained popularity. New normal - "new normality", or, perhaps, you can translate it as a "new reality". These are the key characteristics that will determine the development of the global economy over the coming period - in fact, until the next major structural crisis. One can argue about the correctness of this term, but over the past years it has not only entrenched itself in the economic and political debate. There is an expansion of this concept - both geographically and in content.
It is becoming more and more obvious that the leading countries of the world are entering a new growth trajectory. The question is not only in the new rates, but also in the quality of this growth - in the emergence of new production sectors, in the new geography of their location.
Developing countries are entering a new growth trajectory. They make major changes to the architecture of the global economy. So, if earlier almost any crisis of the American economy was reflected in the entire world economy and therefore views were riveted precisely to the American market, today crisis phenomena can be observed even in the absence of a recession in the USA - for example, with a serious slowdown of the Chinese economy.
It is likely that we are witnessing the first phase of such a crisis. It is enough to pay attention to what happened with the Chinese and world economies over the past few months. Without exception, all the stock markets of the world, as well as the national currencies of many countries, reacted violently to the situation on the Chinese stock exchange and the devaluation of the yuan. The unstable conjuncture in the world oil market also plays its role, although it is also partly related to the role of the Chinese factor in the global economy. And it is already clear that attention to what is happening in the Chinese economy will grow. Its transition to a new stage of development is manifested, in particular, in a slowdown in growth rates. The economic model itself is changing.
During periods of structural crises, not only does the danger of dramatically falling behind or increasing the existing lag increase. But at the same time there is a chance to qualitatively improve their position on the world economic and political map. A crisis is always both a threat and an opportunity. Breakthroughs "from the third world to the first" (to use the expression of Lee Kuan Yew, which led to the success of Singapore) occur, as a rule, in conditions of structural crises, when there is an opportunity to see innovations and introduce them. Moreover, innovations are not only technological, but also institutional. This is confirmed by the practice and experience of countries that managed to escape from backwardness - from Germany, Japan and the USSR to Finland, South Korea and Singapore.
The extent to which the global picture is changing can be judged by the example of the sensitive energy industry.
What seemed exotic, an advertising campaign, an event of a local scale, today is changing the global economy, transforming global political balances. Large-scale transportation of liquefied gas began to unite the previously isolated markets of different continents. And the extraction of shale hydrocarbons is to turn fuel importers into exporters. The work of hundreds of small and medium-sized companies, following the path of innovation, now affects this market (and indeed the economy of many countries) almost more than the largest energy corporations. Moreover, for the time being these companies demonstrate fairly high stability: a nearly threefold drop in oil prices has not led to their massive bankruptcy. Of course, the situation may change if prices continue to fall. However, the efficiency of new technologies turned out to be much higher than many expected. And this is a serious lesson: it is not necessary to insist that the land still stands on three pillars, if the contours of the fourth are already clearly visible.
The main condition, without which one cannot find an adequate response to the challenges of our time, to the growing level of uncertainty and variability, is the stimulation of creativity, enterprise, and continuity of education. This applies to states, and to business, and to every person. People are prone to creativity, and the state’s extremely important task is to encourage it, and in all areas of life
It is impossible to ignore the possibility of a sharp increase in the efficiency of solar energy, the prospects for which were previously evaluated skeptically, as well as the unrelenting activity in the development of electric, hybrid, hydrogen engines. If progress in these areas continues at the same pace, and oil and gas prices do not go even lower, the world may face a revolution on an even larger scale than the "shale" one.
Another important trend has emerged: some well-known energy companies have begun to revise their strategy, preferring to create relatively small capacities - cheaper and more flexible from the point of view of the market. Large and expensive energy facilities have been built for many years, it has been paying off for decades: during this time, demand, energy prices and the policy of the state where construction is underway can change dramatically. Previously, all these parameters looked more stable, but now the horizon of planning and forecasting is much shorter: as the energy strategists say, “the world has become faster”.
Renewal affects all spheres of social activity - technology, economy, humanitarian sphere. Within one article, you can only list these trends, but each of them deserves self-discussion.
Among technological innovation trends should be highlighted:
- Increased technological unpredictability, which reduces the possibility of centralized technological (scientific and technical) forecasting.
- The spread of digital technology in all areas of the material world (and, if you prefer, the virtualization of the lives of people, companies and even states).
- New industrialization, that is, the emergence of industrial technologies and sectors for which the cost of labor (high labor costs) are less significant than the availability of high-quality R & D and proximity to the consumer.
- Innovative technological transfer is increasingly carried out from civilian industries to the military, while previously the process went in the opposite direction (innovations first appeared in the military-industrial complex).
It is necessary to carefully monitor the trends in the development of the social sphere, which determines the quality of human capital and thereby the competitiveness of the country. Among them:
- Global competition for human capital, which becomes the main factor in solving the strategic tasks of any country. This competition is growing. And now we can assume that in the near future it will reach a new level, for example, when solving the problem of machine translation quality — the elimination of language barriers will dramatically increase the dynamism of labor movement between countries.
- The formation of a new social state that meets the realities of modern developed countries. Its principal feature is the individualization of the services provided (education and health first).
- Finally, the growth of inequality comes to the fore in the economic and political agenda - both as a factor directly influencing the level of socio-political stability, and as a possible constraint on economic growth.
Important recent economic innovations include:
- Individualization of goods and services, replacing standardized mass production. Of course, this is a new individualization, not a return to pre-industrial craft production. This production is tailored to the needs of a particular consumer.
- The emergence of new financing instruments, allowing to expand the boundaries of investment in new projects. In part, financial innovations have become a factor that has provoked the global crisis itself. However, states will inevitably follow the path of mastering more subtle instruments of their regulation, rather than their primitivization and total prohibitions.
- The emergence of industrial sectors with faster capital turnover in comparison with enterprises of the same sectors based on traditional technologies brings together operating expenses with capital ones. And this dramatically increases the flexibility to respond to changes in markets and technologies. (An example of what technology provides for the production of shale oil and gas).
- Formation of a new model of globalization and a corresponding model of protectionism corresponding to it. Regional (intercountry) free trade associations are coming to the fore, which allows solving issues that have been stalled in the WTO for decades. Dynamics of exchange rates is becoming a more powerful tool to protect markets than customs tariffs. And instead of protecting its customs territory, the priority interest of the state is to protect value-added chains generated by national businesses.
- Macroeconomic challenges deserve special attention. Here, as in the technological field, there is a growing uncertainty. This applies, among other things, to an unobvious solution to the problem: how not to fall back into high inflation as a result of the anti-crisis policy, which, starting from 2008, many countries have been pursuing in the form of powerful financial therapy (despite the fact that for some countries, fighting inflation, and for others - with deflation). The very future of monetary stimulation raises questions: it is not clear how to get off this “drug”. At the same time, money in a number of countries today is offered at unprecedented low rates, but the business takes it reluctantly. And large international companies have accumulated huge reserves without investing them in projects. That is, it is about the state of uncertainty, waiting, fears about the upcoming new reality. The problem now is not so much the debts of companies and banks as the debts of states. If the debt prospects of countries capable of issuing a reserve currency look, to put it mildly, mysterious, then the debts of other states deprived of such a possibility have already become unpaid. An honest and convincing answer to the question of how the world economy and the monetary and financial system will behave in such an unusual situation does not yet exist.
How should society and the state respond to all these challenges? What should be done not only to keep up, but also to come forward?
The main condition, without which one cannot find an adequate response to the challenges of our time, to the growing level of uncertainty and variability, is the stimulation of creativity, enterprise, and continuity of education. This applies to states, and to business, and to every person. People tend to be creative, and the state’s extremely important task is to encourage it, and in all spheres of life.
It is these features of the modern stage of technological progress that have formed a key trend - to full freedom (or, as they usually say - to liberalization, or liberation) of economic life, to debureaucratize modern societies. This is inevitable with the understanding that "the world is getting faster."
Of course, there are many examples in the world where current policies or concrete decisions do not fit into such an agenda and even oppose it. This kind of measures are sanctions. But it is not easy to find examples of when sanctions were effective, achieving the goals for which they were introduced. Sooner or later, the sanctions are lifted, and relations between countries are back to normal.
This also applies to our current relations with Western countries. Despite the current, largely crisis nature of these relations, the restoration of cooperation is inevitable anyway. Russia is not going to leave the European continent either economically, politically or mentally. Since Catherine II emphasized in the “Order of the Commission for Compiling a New Code”: “Russia is a European power”, almost 250 years have passed, and this, with all the gigantic changes in the world, remains and will remain the truth. No one should expect to tear us away from European civilization with all its cultural diversity. Relations can change in the future, but the strategic direction will remain inevitable - cooperation, partnership, and with a favorable development of events and the formation of a single economic space.
Despite all the geopolitical difficulties, sanctions and various restrictions, we should not forget about the problem of attracting foreign investment. Underestimating them would mean that we accept the logic of isolation imposed on us
The geographic and geopolitical position of Russia not only allows, but in a certain sense also requires us to increasingly develop cooperation in the "eastern direction". And it is a question of such countries as China, Vietnam, Japan, Korea and, in general, the countries of the Asia-Pacific region, as well as countries - members of the SCO and BRICS, located in various regions of the world. It is incorrect to interpret this activity as Russia's intention to “reorient itself” somewhere. Speaking about the importance of this vector of cooperation, we have in mind not only historical ties, our shared history with many of these countries or the current political situation in the world. The global agenda itself, the dynamics of markets, the direction of financial, trade, technological flows clearly indicate that underestimating the importance of relations with these countries and regions would have strategic consequences.
Growth quality: strategy, directions and priorities
Many of the key parameters, benchmarks and risks of the socio-economic development of Russia are contained in the Main Activities of the Government until 2018. Long-term tasks and ways to solve them will be reflected in the Strategy for Socio-Economic Development up to 2030.
First of all, the challenge is to ensure a dynamic and sustainable growth rate in the medium and long term. And here we must immediately see two risks.
On the one hand, the risk of artificial acceleration. We know from our own experience of 1986-1989, how the desire to quickly warm up the economy can turn into a catastrophe - even if for a while, for a year or two, the growth rates will indeed increase. But this short-term acceleration of the USSR paid for this with a multiple increase in foreign debt, for which later, after the collapse of the country, Russia paid off.
On the other hand, psychological adaptation to low and even zero rates, the willingness to accept them as a given, is dangerous. This is noticeable in the economic and political discussions of recent years. Such a psychological attitude, if it becomes dominant in society, opens the way to a long recession. That is why the key task now is to ensure not just a pace, but a new quality of economic growth.
Now they are talking a lot about the need to form a new growth model. And this is true, since both the external and internal conditions of Russia's development have seriously, and in some ways even fundamentally, changed. The exhaustion of opportunities to successfully develop, relying on the inflow of financial resources from foreign markets, has already been said. One can only add that such growth is not very sensitive to the investment climate.
Now the conditions in which our enterprises operate, the incentives to increase labor productivity come to the fore. A comfortable environment for economic actors is the most general formula for the model, which should provide a new quality of growth. This requires consolidation of efforts in four areas that determine the nature of the country's socio-economic development: in macroeconomics, structural policy, in the development of human capital, and in the system of government.
Macroeconomic background of economic growth
Creating a comfortable environment begins with ensuring macroeconomic stability. Low inflation and a balanced budget remain priorities for the country's sustainable development.
In the next three years, inflation should be reduced to the level of 4%. This is an important condition for the growth of citizens' well-being, and the availability of credit for business, and for the greater predictability of economic life in general.
It is necessary to preserve the two most important macroeconomic achievements of the last fifteen years - a balanced budget and low public debt. And we should talk not only about the federal, but also regional budgets that are currently experiencing debt burdens.
The structure of budget expenditures and their effectiveness are no less important than budget balance. First, clearer spending priorities are needed in terms of their impact on long-term economic growth. Research, and the experience of many countries, show that investment in humans is a priority here, including health care, education, science, and also infrastructure. Of course, budget constraints do not allow today to realize these priorities sufficiently. But this does not make them less significant. Therefore, achieving a balanced budget at the cost of a significant deterioration in its quality should be considered as unacceptable. Secondly, the problem of increasing the efficiency of budget expenditures, which is not new in principle, has become even more relevant today.
In the conditions of slowdown of economic growth, budgetary problems cannot be resolved by increasing the fiscal burden. It was decided that in the coming years taxes will not change upwards (downward, albeit selectively, it is possible). In addition, today it is necessary to abandon the growth of non-tax fiscal charges.
Structural Reform Priorities
Macroeconomic stability is a necessary but not sufficient condition for successful development. Low inflation and a healthy budget do not automatically lead to growth.
It is necessary to form modern mechanisms for financing economic growth and modernization. This is important in any situation, but especially in the current one. Russia is facing simultaneously with the closure of many external sources of financing and with the decline in oil prices. Moreover, it is more reasonable to proceed from the fact that, at least, the oil situation will remain low for a long time or even extremely low. This clearly requires more attention to domestic sources of financing, to domestic savings, to an increase in the savings rate in the economy.
Undoubtedly, public investment should play a role here. Especially now, when they allow, to a certain extent, to compensate for the low activity of private investors. We are now following this path, allocating additional resources, providing state guarantees, using specialized forms of financing (the Industry Development Fund, project financing with the support of the Central Bank, etc.). We resort to such a serious source as the National Wealth Fund, using such methods of government incentives as investment incentives and investment contracts.
But public investment cannot be the main source of growth for all time. The state also cannot turn a printing press into such a source: the freedom of uncontrolled emission of money is one of the most dangerous freedoms. References to the western experience of emission stimulation are untenable. First, it is carried out in conditions of deflation (directly opposite to ours). Secondly, the results do not indicate a high efficiency of this mechanism. And, thirdly, these measures have already become a problem, the prospects for the solution of which are not known to anyone (it suffices to recall apocalyptic predictions about the fate of the US dollar).
Moreover, the high share of the state in the economy becomes an independent cause of the limited resources available for investment. Companies with state participation are often characterized by cost increases at rates higher than those in the private sector, and the implementation of a number of investment projects with negative cash flow.
Attracting private investors should come to the fore in the activities of governments at all levels. Attention to this problem was weakened in previous years, since there was a powerful inflow of financial resources. Now, the federal authorities, regions and municipalities will have to carefully analyze what they can do in order for an entrepreneur to want to invest - and invest from them.
The most important source of investment is domestic savings. From this point of view, it is necessary to consider the development of the pension system. This is one of the key problems in the functioning of the economy. After all, retirement savings, as well as life insurance can be the most important sources of long-term money. In this regard, it is impossible to ignore the issues of reliability and efficiency of non-state pension funds. Pension savings still need to learn how to dispose. Therefore, pension funds are the object of increased attention from the state, and the organization of control over the activities of APFs is the most important task of the financial regulator.
Despite all the geopolitical difficulties, sanctions and various restrictions, we should not forget about the problem of attracting foreign investment. Underestimating them would mean that we accept the logic of isolation imposed on us.
Dmitry Medvedev at the Seversky Pipe Plant in the Sverdlovsk Region. Photo: Oleg Prasolov / RG
Attracting investment from abroad is intended to solve a specific task - to provide technological transfer. In many important areas we are not among the world technological leaders today. The share of high-tech exports in our total exports is only 1,5%. Therefore, foreign investment should be evaluated not only from the point of view of attracted monetary resources (attracted a lot of money, but what was done on them?). Technology and know-how are even more important.
Import substitution is another key area of government work. And it is important that it does not turn into a "slogan of the day." It must be remembered that in the 20th century, under this slogan, some Latin American countries pursued a policy of closing the domestic market for foreign competition and then intensively, massively resorting to loans, subsidized domestic production, which eventually turned into financial collapse. Aware of this experience, we must clearly understand: import substitution is not a substitute for foreign products with domestic ones, but only more expensive and worse quality.
Of course, there are special areas and very specific types of products, when imports have to be replaced by any means and disregarding costs. But to transfer this specificity to the economy as a whole would be dangerous. The best import substitution is the production of domestic products that are competitive both domestically and in foreign markets: the ability to export means the ability to compete, including with imports. Such import substitution can also apply for state support.
It should emphasize such a problem as the development of competition. With weak competition, a market economy drastically reduces its potential, if it does not lose its meaning at all. In our current situation, this topic is of particular relevance: the devaluation that has occurred objectively limits the presence of imported goods on the Russian market. Sanctions and import substitution work in the same direction. All this can further reduce the level of competition in our economy, which is already excessively monopolized. Another barrier for it is the unabated and even growing participation of the state in those segments of the economy where its presence is not necessary. The negative development of a small and medium business contributes to the situation negatively.
The restructuring of the supervisory authorities will foster competition. Formally and informally, the “stick system” of evaluation that exists in them encourages actions that are contrary to common sense. Such actions not only discredit state control, but also show that, in practice, its real goals have long been forgotten or are simply ignored. The steps now proposed to limit small business inspections and the application of antitrust laws to it are examples of the fact that the approach to control and supervisory activities is gradually changing.
The pension system and its development prospects can be said to be one of the fundamental social and economic problems. It is not a matter of discussing the retirement age or budget expenditures to cover the Pension Fund deficit. So, the problem becomes real, which can be formulated as "each age is a special relationship"
Finally, the mandatory conditions for real competition are the development of a system for the adaptation of workers who are released, their retraining, new forms of employment, increasing the flexibility of the labor market, and promoting small businesses. The creation and development of a nationwide vacancy base (including information on the social and other conditions of the proposed job), the adoption of regional labor mobility programs (involving workers from other regions) and other measures are only part of the necessary steps. They are still not enough, because the experience here is either small or even negative. Traditions of labor movement on a centralized (often coercive) basis also do not very much meet the needs of the modern market. The necessary infrastructure, primarily social, is underdeveloped.
The absence of such conditions or their deficiency is a serious sociopolitical obstacle to a competitive economy and an incentive to save excess employment and inefficient production.
Preservation and development of human capital
The principles of the welfare state, laid down more than a century ago, are already lagging behind the modern realities. Growth of welfare and new demographic trends require a serious change in previous approaches.
At the same time, competition for human capital is growing, and it is becoming more and more mobile. Now it is not uncommon when people live in one country, but work, study and treat themselves in others. And we can not escape from such competition. Moreover, people increasingly prefer to choose from different options in their own country. In general, we need a structural modernization of the relevant industries.
In the field of education, more and more obvious structural problems are to be overcome. First, we are faced, if we use economic terminology, with a surplus of specialists with higher education and a deficit - with a secondary technical. Secondly, higher education today has practically become universal, and this, of course, influenced its level. Therefore it is necessary, without decreasing the availability of education, to constantly improve its quality.
One of the important requirements is the continuity of education. Now, the famous “learn, learn and learn” will somehow accompany a person for the rest of his life. There is a problem of education for adults, as well as older ages - from mastering or increasing computer literacy to the acquisition of another specialty. The ability to be attractive both for school graduates and investors willing to invest their money in education is an important criterion for the effectiveness of a modern university. Programs of universities and other educational institutions that will ignore the new reality or respond to it purely formally, will lose in the competition, which in the educational system is becoming stronger. Moreover, our universities, at least the leading ones, compete not only on the national, but also on the global market. This is a serious problem both for education and for the health care system: if the demand for quality services is concentrated outside the country, then within the country it is correspondingly reduced, which means that the quality of such services also decreases.
There are many steps to be taken to meet all these requirements. For example, to create a mechanism of preferences for companies participating in the development of the material base of educational institutions, including the formation of a target capital fund. To support projects for the modernization of distance education, to create a national portal for open education. Restructure and reorganize universities, graduates of which are not in demand on the labor market.
No less, and maybe even more complex tasks to be done in the field of health care. Investments in modern equipment, the largest in the history of Russia, and an increase in the salaries of doctors are a necessary condition, but not sufficient to solve these problems.
There are a number of areas - managerial and technological, in which Russian healthcare will develop. These include the priority development of primary health care, the development of so-called treatment protocols (clinical guidelines for the provision of medical care), the development of telemedicine, the introduction of a single electronic card — any physician and any clinic can take this patient’s medical knowledge where he did not appeal.
Actually, the right to choose and develop competition between doctors, as well as between medical institutions, is one of the important factors that make the insurance model of health care attractive. It cannot be said that insurance medicine in all countries gives one hundred percent result. However, one can judge its effect when it is not formally implemented.
The introduction of insurance principles is not easy. This also applies to the role of insurance companies, the impact on prices, and the quality of services. But we made the choice and do not intend to refuse it. However, the insurance model is actually possible if the state guarantees of free medical care are clearly and clearly understood by people.
The pension system and its development prospects can be said to be one of the fundamental social and economic problems. It is not a matter of discussing the retirement age or budget expenditures to cover the Pension Fund deficit. So, the problem becomes real, which can be formulated as "a special relationship to each age."
With the absolute decline in the working-age population that began in Russia, it is crucial to help people who are ready to continue working. Extension of the active labor activity of the older generations is now not only a social, but also an economic task. It can be said that there are very few examples of modern economic growth in a country where the number of workers is declining. And this is another serious challenge facing Russia.
A separate topic is the support of people of older retirement age. Often they need help that their loved ones cannot provide, even if they are. This assistance is not always associated with cash payments, it is primarily a matter of time and effort. They are assisted by volunteers and public organizations, but the development of relevant state services is simply necessary here.
The peculiarity of pension systems is that they are very inertial, just like demographic processes. In the future, we may face a situation where the number of people of retirement age equals the number of the working population. It is clear that it is fraught with a sharp increase in the tax burden, a decrease in the level of pensions and other extremely unpleasant consequences. To avoid this, our economy, finances, social and the pension system itself must respond to such a prospect in advance.
Non-economic factors of modernization
To ensure our successful development, it is necessary to radically improve the quality of public services, the quality of public administration.
First of all, it is the security of the person and property. The most sustainable and long-term effect on the development of the economy is provided by a firm policy of protecting property rights and curbing arbitrariness. A competent system of checks and balances aimed at protecting business activity from unjustified administrative and law enforcement pressure.
The formation of a competitive jurisdiction in Russia is extremely important, which requires an effective judicial system. This is a complex problem, as it involves both institutional solutions and changes in the education system, and, most importantly, traditions and practices.
Effective jurisdiction is a task no less difficult than an efficient economy. But they go hand in hand, since the first is a prerequisite for the second.
The formation of a single court system is an important step in the modernization of the judicial system. However, this is only the beginning, and organizational changes alone will not give the desired result. It is very important that the transformations of the judicial system ensure the flow of new, highly educated people into it. It is equally important to use the whole arsenal of modern information technologies that can qualitatively increase the transparency of the judicial system and the decisions taken in it.
Improving the quality of public administration is a topic that has been actively discussed in our country lately. This task is also complex, because it includes the optimization of the government system, the formation of a decision-making mechanism, including strategic planning, the introduction of modern management technologies, and, finally, personnel training.
Today, one of the key tasks of the public administration system is to stimulate investment activity. Its solution depends largely on the willingness and ability to work to improve the business climate and to convince entrepreneurs to invest in the relevant sectors and regions. This criterion should be considered as one of the main ones when evaluating the work of managers at various levels of government.
It is necessary to form a system of responsibility of the levels and authorities for the decisions made. Of course, they must also have the appropriate legal and financial resources. Funding and program planning, evaluation and promotion of officials should be tied to the achievement of clearly defined goals (outcomes).
Today, one of the key tasks of the public administration system is to stimulate investment activity. Its solution depends largely on the willingness and ability to work to improve the business climate and to convince entrepreneurs to invest in the relevant sectors and regions. It is advisable to consider this criterion among the main ones when evaluating the work of managers at various levels of government.
The state decision-making system can hardly be considered truly “systemic” unless it becomes holistic and consistent. The law on strategic planning provides the basis for the goal setting system to emerge. But it is not at all about reviving the Soviet-style bureaucratic plans in any form, but about controlling ourselves, if you will. That strategic objectives are not confined to slogans, while current, tactical decisions would be in conflict with long-term guidelines.
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Summing up, it is possible to draw some fundamental conclusions about the changes taking place in the world and in the country, as well as about the tasks that confront us at the present time.
First, in the world as a result of the global crisis, a "new reality" is being formed, covering not only the economy, but also all the essential aspects of the life of modern society. Leading countries of the world are entering a new growth trajectory. This also applies to growth rates, growth factors, and growth quality. Many criteria by which the dynamics of development were assessed at the end of the twentieth and the beginning of the twenty-first century will require revision. New technologies, innovations introduced, including by small companies, are radically and in a short time transforming entire markets and industries. This redefines market behavior, including the approach to the implementation of large long-term projects.
Secondly, Russia is a developed country in many socio-economic parameters, and therefore its problems should be compared primarily with other developed economies. At the same time, we also have some advantages of developing economies, which we can and should use both to overcome the current crisis and to respond to long-term challenges.
Of course, this is not a reason for proud complacency: our place in the world creates additional challenges and difficulties for us. It is Russia’s desire to be an organic part of the developed world that causes opposition from our potential competitors. The geopolitical tension of recent times is largely associated with these circumstances.
Thirdly, it is necessary to form a new model of economic growth that meets the realities of modern Russia and the world. Now, during the global crisis, new, long-term "rules of the game" are being worked out. The new model is designed in the medium term to ensure a dynamic and steady growth of the Russian economy at a rate exceeding the world average, and accompanied by qualitative structural changes.
Fourth, human capital, which is the most important and at the same time most dynamic factor of modern production, becomes the key field of international competition. This competition will be very tough, as the world has a clear understanding: the leading positions will be occupied by those countries that can become the most attractive for educated and energetic people.
Fifth, the search for an adequate response to the challenges of a rapidly changing world has formed a key trend towards the emancipation of economic life. This is realized not only by developed, but also by many developing countries that are striving to create the necessary conditions for innovation, the transfer of both capital and technology.
From the above, a number of priorities arise, the solution of which is necessary for the sustainable development of the country.
The first. Ensuring macroeconomic stability, including a balanced budget and consistent inflation to the target value. This will increase predictability and confidence in the national economy. In addition, a decrease in inflation should be accompanied by a decrease in market interest rates, that is, an increase in the availability of loans for business and for citizens.
The second. Improving the efficiency of budget expenditures. Investments in infrastructure and people should be considered among the highest priorities. At the same time, the balance of the budget will need to be ensured on the assumption that the fiscal burden should not increase in the next few years.
Third. Consistent implementation of the course to attract private investment, to increase their role in ensuring economic growth. The state is already using and will offer new forms of support for investment activity. However, government incentives should not be dimensionless, and, most importantly, the state cannot replace private investors. According to their ability to attract private investors, it is necessary to evaluate the effectiveness of the relevant parts of the state apparatus, including the leadership of the regions.
Fourth. Domestic savings should be the most important source of investment. This is a strategic task for many years, but we need to move towards this goal. In this context, we will consider the issue of the effective use of pension savings. Pension, and then the insurance system - the main source of the formation of "long money" in the economy.
The fifth. The development of small and medium-sized businesses as a condition for sustainable economic growth and at the same time as a factor for ensuring social stability. The dynamics of small and medium-sized businesses is one of the most significant indicators of the country's economic and social health.
The sixth. Stimulating competition. One of the main reasons for weak competition is concerns for social stability in enterprises and in the regions. Therefore, the development of the modern labor market is becoming a social and economic problem. A formal approach to its solution will impede the accelerated creation of high-performance jobs.
Seventh. Stimulating the growth of non-primary exports (in absolute terms and as a share of total exports). Among other things, this would be an indicator that import substitution actually worked and began to bring positive results.
Eighth. Qualitative shifts in the efficiency of public administration. It is necessary to form a system of responsibility of various levels and authorities for the decisions made. Evaluation of officials and funding programs should be tied to specific results. The decision-making system must be holistic and consistent, so that tactical decisions would not conflict with the stated long-term guidelines.
Experience shows: it is not enough to work out the right course. It is equally important to bring it to the whole society. And, most importantly, to ensure its implementation. This is our main task.