Kudrin said the main obstacles to the growth of the Russian economy

Alexei Kudrin

Photo: Oleg Yakovlev / RBC

The acceleration of the Russian economy will not prevent disappeared the dependence on oil, the weakness of public administration, financial exclusion, said Alexei Kudrin. It listed the steps required for more rapid GDP growth

Russia’s economy remains extremely dependent on oil prices, this problem will not go away. This was stated by the Chairman of the Board of the Center for strategic research (CSR) Alexei Kudrin in the course of the April conference of the Higher school of Economics (HSE), the correspondent of RBC. “So while the oil price is low, we will have low growth. We switched from the old models of our economy. New has not appeared yet”, — Kudrin said.

Another obstacle is “very weak” condition of public administration, which prevents the development of incentives for development. In addition, there is the demographic problem, namely the decline in the working population of Russia. The country is still in financial isolation because of the sanctions, Kudrin said, is a “substantial restriction” which is felt more and more.

CSR is developing a program of development of the Russian economy until 2035. Kudrin is not yet fully revealed the measures laid down in the document, it needs to be presented in may. At the same time program to accelerate the growth of economy is preparing the economic development Ministry.

In the first two or three years, the reforms should improve the credibility of the programme of action of the government, this will become a key factor of success at this stage, Kudrin said. Then, from 2020 to 2026 need to focus on building investment (growth of investment should be the main item in the programme of economic development, said the head of the Ministry Maxim Oreshkin). However, it will not help to achieve the desired growth rate of 3-4% per year. “So we need to increase competitiveness, which for this period should accrue, and, in order to become more sustainable, a significant increase in performance,” — said Kudrin.

Forecast CSR, as can be seen from the table, which was presented by Kudrin positively than the Russian and foreign institutions. If Minekonrazvitiya in the target scenario expects acceleration to 3.1% in 2020, the CSR expectations of 3.6%. It is possible to achieve growth of 4% to 2025, explained Kudrin. It will happen due to the increase of the basic capital (1.1 to 1.2 p. p.), additional use of labour resources (by 0.2-0.3 PP) and total productivity of factors (0,7-1 percentage point), which primarily will be based on the change in business model.

Household consumption, which in previous years was the main driver of GDP growth, will go with the first plan. In the coming years it will be replaced by investment, and then performance, Kudrin said.
The real exchange rate will increase to 119% in 2035 (over 100% of their 2010). By 2020, the devaluation effect for the Russian economy leveled predicted Kudrin, from-for it Russia will be harder to earn on import substitution.

Forecast CSR involves the growth of exports because domestic demand to ensure the sale of Russian goods can not. However, as can be seen from the data of the CSR, the share of oil, gas and oil exports, will still be at a high level, although declining from 52% in 2017 to 37% in 2035-m. But will increase the export of machinery and equipment.

In Russia very low level of trust in the government, echoed Kudrin, but the success of the reforms depends, among other things, and of him. The need for reform of public administration, explained the head of CSR, it should include personnel reform, process optimization, digitalization, “modern control system modifications”. The number of powers of state bodies has doubled since 2003 and continues to grow, expressed concern about Kudrin. The inefficiency of forcing the state “to grab new powers”, which do not contribute to productivity growth.

Another measure, which, in the opinion of the CSR must apply the state — the release of private initiative: reducing the state’s share, new competition policy, support for small and medium businesses. Now tough competition is only for the administrative resource was noted in the presentation. The government after the sale of a package “Rosneft” in the coming years do not plan major revenues from privatization, said Kudrin, but these plans need to change.

For economic growth required the decentralization and effective foreign policy, Kudrin concluded. The last thesis means policies for socio-economic development, without excluding, however, the “strategic autonomy in security matters”, as well as participation in the formation of new rules of global trade and “ensure the systematic protection of Russian interests from violations by the partners for its obligations.”

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