Translated material
Not a fountain
The Russian economy can no longer grow with oil
“The global economic crisis, which is just unfolding, has shown the exhaustion of the growth model of the Russian economy that we had in previous years,” said Minister of Economic Development Elvira Nabiullina, speaking in the State Duma yesterday. According to her, this model was built on high oil prices, which have tripled in the last five years alone, as well as the availability of cheap long-term money for Russian banks and enterprises abroad.“This model was not very sustainable,” the minister admitted, noting that low sustainability was associated with low diversification of the economy , dependence on exports of only a few sectors of the economy and insufficient development of its own financial market.
Actually, this was known even before the start of the global crisis. Over the past few years, the economic department has been developing various scenarios for the country’s socio-economic development, justifying the need for economic diversification. Moreover, the country's socio-economic development strategy until 2020 , recently approved by the government, proclaims the transition to an innovative path of development as the only possible one. But before this transition, according to the document, a preparatory period of four years had to pass. However, the global crisis is depriving the Russian authorities of time to prepare.
“The main task of the current moment is to adapt our entire economy to the decline in export income that will occur, and to the deterioration of the balance of payments,” Ms. Nabiullina believes. According to the head of the Economic Expert Group, Yevsey Gurvich, the current economic model has exhausted itself not because of the crisis. Even if oil prices remained high, it would soon show its inability. The Russian authorities, under any external conditions, need to improve the investment climate and the economic environment as a whole. “Growth points cannot be assigned. They will appear on their own when suitable conditions are created,” Mr. Gurvich believes.
According to Ms. Nabiullina, normal economic development requires ensuring the stable operation of enterprises in key sectors of the economy. First of all, this applies to socially significant enterprises and those enterprises that have an impact on the entire economy. In addition, Russian companies need to seriously engage in reducing production costs. “In conditions of cheap money, we all, both in government projects and in private companies, did not save much on costs, and now we are talking about increasing efficiency,” she believes.
The state, despite the onset of difficult times, does not intend to abandon its projects. Thus, it is planned to spend 1.2 trillion rubles on federal target programs next year. from the federal budget in order to stimulate demand in the economy. “We must analyze these programs both from the point of view of financial parameters and from the point of view of priority, but trying mainly to maintain physical parameters and even increase some programs, because this supports demand in the economy,” said Elvira Nabiullina.
Presidential Assistant for Economic Affairs Arkady Dvorkovich also agrees with her. On the one hand, he warns against excessive government intervention in the economy, but at the same time promises government support to all efficiently operating companies. “We will focus on supporting such projects, regardless of Deripaska, Ivanov, Sidorov, because these are jobs that will benefit the regions,” Mr. Dvorkovich said yesterday, speaking at the media forum of the United Russia party. He admitted that “there is a lot of talk now about why the government is helping the oligarchs - Deripaska or Alfa Group.” The state does help them financially, however, the presidential adviser explained, the help is not related to the fact that they are oligarchs, but to the fact that they work well. The RUSAL Group builds the most efficient plants that can compete in the world, for which it receives government support.
Mr. Dvorkovich yesterday touched upon another topic related to a new model for Russia's future economic growth. According to him, businesses will definitely be compensated for the loss of income due to the upcoming replacement of the unified social tax on insurance payments. Literally within the next few days, the state's plans to reduce taxes may be announced.