Fractures and kinks

The well-being of the Russian economy may be affected by the decline in oil prices and the excessive role of the state

At first glance, it is much easier to summarize the economic results of the outgoing year than the results of a number of previous years. The socio-economic policy of the authorities has taken final shape. The voices of critics have become quieter and heard less often. Some went to work abroad, others realized that, looking at the current macroeconomic indicators, it is not the time to talk about the need to adjust the course, to put it mildly. But this is only at first glance. Moreover, the main threat to economic well-being comes from the activities of the state itself.

Indeed, the main economic indicators look more than optimistic. GDP growth at the end of the year may reach 7%, investment in fixed assets will increase by more than 13% (2.5% above the 2005 level). For the first time in post-reform Russia, the inflation rate will amount to a single digit value - 9% (versus 10.7% in 2005). The national currency is getting stronger (another thing is that the pace of its strengthening alarms many). Moreover, in the summer, after the Central Bank lifted restrictions on capital transactions, the ruble formally became fully convertible. “The well-being of Russians has been improving, as evidenced by statistics on the consumer market, sales, and the growth of real cash incomes of the population, which exceeded the inflation index,” says Sergei Smirnov, director of the Institute of Social Policy at the State University Higher School of Economics. According to the Ministry of Economic Development, growth in real disposable income of the population in 2006 is expected to reach 11.5%.

The federal budget is being executed stably and with a surplus; gold and foreign exchange reserves are breaking record after record, having increased one and a half times over the past year. Today they amount to almost $290 billion. In terms of gold and foreign exchange reserves, Russia this year has taken third place in the world: only China and Japan are ahead. The stabilization fund is growing. It already contains more than 2.2 trillion rubles. The RTS stock index is also trending upward, having crossed the 1,800 point level, which reflects the influx of foreign portfolio investments into the country.

The head of the Economic Expert Group, Yevsey Gurvich, certainly attributes the completion of bilateral negotiations on Russia’s accession to the World Trade Organization to the economic successes of the past year. It is also impossible not to mention the early payment of all debts to the Paris Club of creditors. In 2006 alone, more than $23 billion was transferred to the club's member countries, mainly Germany. The debt problem, which has been going on since the times of the USSR, has been successfully resolved: Russia's external debt now amounts to less than 5% of GDP.

However, when analyzing the reasons for the pleasing macroeconomic indicators, the picture emerges not so clear-cut. Russian prosperity continues to be based on high world energy prices, primarily oil. In other words, something that does not depend at all on the socio-economic policy of the state. “This is what they gave us,” says Leonid Grigoriev, president of the Institute of Energy and Finance. (He, however, believes that the government’s economic policy has “come to life a little” this year.” “At least from the expectation that the problems would resolve themselves, the government has moved on to action. However, one can argue about what it is doing and how ", Mr. Grigoriev told Vremya Novostei.)

This year, oil prices have demonstrated their fickle nature and the extent to which their fluctuations affect the economic situation in Russia. “Everyone was convinced that the price of oil can go not only up, but also down, which it demonstrated in the middle of the year, dropping to $60 per barrel in September. This immediately affected our market. On the interbank market, rates have already risen from 2-3% at the beginning of the year to 6.2% in November. Money has become more expensive, economic growth will become more difficult. In general, this will have a healing character, because in conditions of more difficult growth, more efficient companies will grow,” Evgeniy Gavrilenkov, chief economist at Troika Dialog, told Vremya Novostei.

“Next year may become a year, if not of a turning point, then of an inflection point. Before this, oil prices were rising, but next year they may drop significantly,” predicts Evsei Gurvich. -- The model of economic growth, which was largely based on rising oil prices, will not work. Production growth will slow down. For the first time, it may turn out that oil prices in the budget are not underestimated, but overestimated. There may be problems for the budget, but in any case there will be no crisis. Huge reserves have been accumulated: a stabilization fund, gold and foreign exchange reserves.” “The economy is still protected by oil revenues,” agrees scientific director of the Higher School of Economics Evgeny Yasin.

Thus, the unpredictability of oil prices is not a threat to the stability of the Russian economy, at least in the next year. But this does not mean that you can, as they say, relax and have fun. Another threat exists and is growing. Moreover, it is home-grown, in no way connected with global economic processes. This threat comes from excessive state intervention in the economy for a market system: both through the bureaucracy of regulatory and control procedures, and through the expansion and strengthening of the public sector. For this reason, small and medium-sized businesses, the basis of the economies of many developed countries, cannot develop normally. For the same reason, the country is engulfed in corruption.

At one of the recent government meetings, Finance Minister Alexei Kudrin bluntly stated that the state's desire to increase its participation in the economy leads to increased corruption. In turn, Minister of Economic Development and Trade German Gref believes that corruption has become a separate economic factor. “Nothing beats investment attractiveness anymore. If we cannot cope with this problem, then it is impossible to talk about accelerating the dynamics of economic development,” says the minister.

However, the opinions of ministers have not yet influenced the overall picture. There are no fewer officials. And they are all in business, despite the administrative reform, one of the goals of which was the elimination of redundant functions of the state. “Our state has entered the automotive sector and other industries, but we need more decisive measures to reduce the state’s participation in the economy,” Mr. Kudrin was almost indignant, proposing to his colleagues at a government meeting to at least halve the number of permitting functions in the hands of government officials.

Evsey Gurvich points to the development of state monopoly as one of the negative trends of the outgoing year. “There is no reason why this should slow down. I am afraid that direct participation of the state in the economy will continue, consolidating the privileged position of state-owned companies, even a monopoly. There are no alternatives yet. Not because the alternatives are economically unjustified, but because there is no one to object on political grounds,” says the economist.

At the same time, Evgeny Gavrilenkov, as well as many other economists, insists that the public sector is less efficient than the private sector, which is confirmed by world practice. “There is Peugeot-Citroen, there is Renault,” the economist gives an example. -- As a rule, the state-owned Renault loses to the private Peugeot-Citroen. Take the state, even interstate, Airbus and the private Boeing. In the long run, Boeing wins. The 787th project is absolutely technological, while the new Airbus model was created on the basis of existing technologies and materials. Boeing achieved a 25 percent reduction in production costs using new materials. That is, the engine of progress is private enterprise.”

Meanwhile, in the opinion of Leonid Grigoriev, the problem is not so clear-cut. “Of course, there are purchases of private companies by state-owned companies. Nobody feels particularly happy about this, but, for example, who will be better at managing Sakhalin-2 - Shell or Gazprom - is a question that still needs to be seen. There are some nuances there,” he says.

Evgeny Gavrilenkov expects that in the conditions of more “difficult growth” that will develop in the coming year, it will gradually begin to emerge that private business is better adapting to changes in economic realities. “It may take a number of years before these issues are highlighted. For now, all credit resources are open to national giants,” he says.

In terms of long-term socio-economic development, accelerated development of the public sector is hardly promising. For decades and centuries, practice has proven which economic model is the most effective - a Western-style market model, where private business plays the main role. At the same time, the state retains the role of protector of this very private business, including from itself, as well as the collector and distributor of part of the profit that goes into the common treasury in the form of taxes. The task of the authorities in such a system is to stimulate private business as much as possible so that it brings more profit and, accordingly, pays more taxes to the treasury. Such a model can be implemented even within the framework of “sovereign democracy,” “not at the behest of Western advisers,” but by cooperating with them and adopting the best. Only then will Russia become truly strong, with a much more powerful and efficient economy, a country in which - and this is the most important thing - it will be comfortable to live and raise children. A country with an economy, the main subject of which will be a citizen-entrepreneur protected by law, and not an official. A country in which the state will work for citizens, and not citizens for the state. And then the proverb “If you are so smart, then why are you so poor” will definitely not be about Russians.

Perhaps the saddest result of the country's socio-economic development in 2006 is that, despite the growth in real incomes of the population, the implementation of national projects, etc., the gap between the poor and the rich has not decreased. “The growth of wages of the population did not affect the change in the level of poverty of the population (the share of the population with cash incomes below the subsistence level),” states the Ministry of Economic Development and Trade in one of its forecast documents. “The problem of poverty still exists. And this is really the problem that we will have to fight in 2007,” echoes the ministry’s experts, Sergei Smirnov. How to do this in the context of the upcoming sharp increase in energy prices within the country in the coming years, which will affect the entire population, remains a mystery. At the same time, Mr. Smirnov is confident that the election year will not affect the government’s socio-economic policy. “We have moved away from the tradition of the mid-90s, when there was really a serious political struggle and those political groups that claimed victory were forced to make financially unsubstantiated promises. Do you have any doubts about who will win the next election?” - Sergei Smirnov asks a rhetorical question.

Mikhail VOROBYEV, Isolda VASILYEVA