How to save from collapse of the Russian economy?

My assessment of the economic situation of Russia and the possibilities of its improvement is based on many years of alternative assessments of the macroeconomic development of the USSR and the Russian Federation, which my colleagues and I have calculated for more than 45 years. I want to note that these grades were multivariate in nature and also concerned large sectors of the economy. These estimates were significantly different from assessments of the central statistical administration of the USSR and Rosstat. Especially large differences are assessing the volume and dynamics of fixed assets, the restoration value of which is very different from the accounting value calculated by the Federal State Statistics Service. Currently, there is a gap of about 7 times. This is an unprecedented value not only for the statistics of developed countries, but also in the history of our country. Even in the USSR it was much smaller. Hence the significant exaggeration of the dynamics of fixed assets and the size of profit, since depreciation deductions are underestimated (annual deduction from the cost of fixed assets to compensate for material wear and moral obsolescence). Rosstat and the dynamics of employment are understood, as it does not include the employment of immigrants.

With such distortions of statistics, neither qualified economic analysis nor a reasonable economic policy is impossible. Which we observe in most scientific works of Russian and foreign economists and in the forecasts of the government and non -governmental organizations, including the International Monetary Fund and the World Bank.

Alternative assessments of the economy of the Russian Federation in comparison with the assessments of Rosstat are presented in table. 1.

Table 1. Comparison of the official and alternative assessment of the dynamics (in %) of the macroeconomic development of the Russian Federation for 1991–2015*

* The numerator indicates an alternative assessment, in the denominator - the assessment of Rosstat.
Data on the level of depreciation of funds are given for 1998, 2007 and 2015

First of all, I will draw attention to the fact that, according to our calculations, the GDP of Russia has not yet reached the level of 1991, although Rosstat shows its excess. Also much lower than the level of 1991, the level of labor productivity. In my opinion, this is due to the difference in assessing the dynamics of fixed assets. If you calculate the fixed assets index at the residual value, based on the data of Rosstat about the dynamics of fixed assets at full cost and wear, it turns out that this indicator grew by 19%, while our calculations show its reduction by 50%. The world economic history did not know such a reduction in peacetime. Faster GDP growth than the growth of fixed assets over the entire period is explained by the presence of excess production capacities at the beginning of the period, their best use in a market economy and the transition to a new, less fundamental structure of the economy with an emphasis on the sector of market services. All these three factors were practically exhausted in the early 2010s. This mainly explains the subsequent reduction in GDP. There was also a reduction in the number of employees, not compensated by the growth of stocking arrangement.

Due to a huge reduction in capital investments, the share of gross accumulation of fixed assets in GDP is currently 14% (according to the most reliable calculations of the Eurostat). This is the lowest share among the more or less developed countries of the world, excluding the expanded reproduction of fixed assets.

The back of the nullity of the fraction of the gross accumulation of fixed assets is hypertrophy of the domestic household consumption fund. Its share in Russia is one of the highest in the world. But this does not ensure the welfare of most of the population. The reason is obvious - monstrous social stratification. According to my calculations of the early 2000s, the decal coefficient of 1 in Russia was 30: 1 instead of 16: 1 in Rosstat. This is one of the highest decal coefficients in the world. However, it would be a mistake to believe that the solution to the problem of poverty in Russia only in the redistribution of income. Here, the danger of subsequent loss of well-being due to reduction of GDP lies in wait.

Of these two features of the modern Russian economy, an algorithm for ensuring an economic breakdown in Russia follows. It is close to a similar strategy for its “Asian tigers” in the last third of the 20th century. There are certain similarities with the Stalinist modernization strategy. In principle, the movement of jerks is an important traditional feature of the Russian economy. I explained it for the first time in 2002, although a number of Russian historians had similar opinions. Now the President of the Russian Federation perceived this idea. The only trouble is that they do not indicate the algorithm and the mechanism of the implementation of this jerk. It is not surprising that everything is limited to good intentions and instead of a jerk there is a further sliding of the economy down.

The concept of economic jerk proposed by us is based on a radical increase in the share of the accumulation fund in GDP: from the current 14% to 40–45%. A similar level was relatively recently among a number of “Asian tigers” and in the USSR in the early 1930s. At the same time, there will be an increase in working capital, allocations for science and education. Of course, such a change requires a long time; In parallel, it is necessary to create appropriate material, financial and institutional prerequisites. At the same time, a sharp reduction in the share and the absolute volume of household consumption will inevitably occur. According to our estimates, based on the conditions of 2015, for which Dmitry Fomin and I made calculations, this fund will be reduced twice. However, the main severity of this reduction will be on the most wealthy segments of the population. The results of the proposed redistribution of population incomes are presented in table. 2. So, the income of the wealthy group itself will be reduced by 6 times, the next - 3 times, etc. In the two most poor groups, the income will either remain unchanged, or in the lowest group will increase by one and a half times. Thus, from this redistribution, although to varying degrees, unfortunately, 80% of the population will suffer. You have to pay expensive for economic errors. But even after such a redistribution, the differentiation of income will remain at the average European level. And this process of redistribution of income will require a long time. It should be synchronized with the creation of material and institutional prerequisites for the modernization of the economy.

Table 2. Calculation of the actual and proposed distribution of personal income of the population by revenue groups, 2015

Among the methods of withdrawal of the income of wealthy strata of the population, one can be called (in decreasing importance) high property tax, high excise taxes and customs tariffs for objects not of first necessity, a higher income tax for high income citizens. The collection of these funds will require great efforts from the tax service. You will have to overcome numerous attempts to evade taxes.

Radical changes in the structure of the economy are assumed in the interests of its modernization. The share and volume of industry (primarily investment engineering and high -tech industries), construction, freight transport will significantly increase in the economy, and the volume of the sphere of retail and domestic services to the population will significantly decrease. The volume and structure of exports will radically change due to a greater orientation of the economy to satisfy internal needs and the orientation of imports primarily on the satisfaction of the investment needs of the economy.

The proposed measures will allow the average annual growth rate of the Russian economy at 3% - acceptable for the global economy. This will prevent further deterioration in the position of the Russian Federation in the global economy. After 8-10 years, the growth of the household consumption fund will become possible.

In my opinion, it is illusory that the current Russian society and institutions of Russian statehood are able to develop and even more to implement a plan for modernizing the Russian economy. To do this, they do not have enough intellectual abilities, nor the necessary moral qualities and competence. Therefore, it is precisely in the renewal of Russian society and Russian statehood that are the key to the modernization of the domestic economy and ensure greater social justice for Russians.

Grigory Khanin,
Dr. Econ. sciences, professor of the RANEPA

1 decal coefficient - the ratio of average income of 10% of the richest population to the average income of 10% of the poorest population. - Ed .