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Great economic miracle of Russia: Myth or reality?
Started:February 25th, 2014 (09:48 PM) by kbit Views / Replies:159 / 0
Last Reply:February 25th, 2014 (09:48 PM) Attachments:0

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Great economic miracle of Russia: Myth or reality?

Old February 25th, 2014, 09:48 PM   #1 (permalink)
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Great economic miracle of Russia: Myth or reality?

Scientists and economists who recently met with Vladimir Putin believe that Russia has sufficient scientific and technical reserve for economic growth. According to the scientists, the activation of the intellectual potential and the rise in labor productivity will help the economy. Economist Igor Bogdanov told Pravda.Ru about possible obstacles.

Russian President Vladimir Putin met with economists from RAS to identify and discuss the points of growth of the currently stagnant Russian economy. The President was presented a report compiled by 70 scientists. According to Rossiyskaya Gazeta, head of RAS Vladimir Fortov who presented the report stated that the main reserve of growth for the Russian economy was its scientific, technical and intellectual potential. The report shows that Russia has sufficient potential to stimulate the stagnant economy.

The priority is increased productivity and advancement of scientific development. Igor Bogdanov, Doctor of Economics and head of the Laboratory of Sociology of Economics Institute of Social and Political Studies told about preparation of the report:

"Before this issue was submitted to the President, it was discussed at the Free Economic Society where these concepts were reviewed in detail. What do we need to do for Russia to survive? This issue was addressed at the Department of Economics. There was a great deal of controversy, comments, additions, and corrections. That is, this is not only work of academicians Fortov, Makarov, and Greenberg. This is a collective work of many scientists, and it is certainly reasonable, real, and can give a real boost to the economy." Bogdanov stressed that the implementation of the RAS proposal may be complicated by the intervention of another economic school of thought. "Unfortunately, we have several economic schools of thought, one school is the Academy of Sciences, it is classic economics, and another school was once touted by Gaidar and now promoted by Kuzmin and his wife, the chairperson of the Central Bank."

According to Bogdanov, the economists of the RAS are of the opinion that Russia has already destroyed everything and everything must be recreated. The meeting held with the President was not the first discussion of the problems of economic growth in the attempts to identify new points of growth.

"It is important that someone wants to take it seriously, and we do not start, for example, fighting oligarchs, do not start taking anything from anyone, etc. We are simply saying that we have to properly build economic policy. Will we be heard this time? There is a team of presidential administration, and there are implementers that include the Ministry of Economic Development, Ministry of Finance and the Central Bank. Where this team will turn and what practical steps it will implement, unfortunately, is not under the control of the government or even the President," said the economist.

At the same time, according to the professor, in Russia 27 percent of the population live below the poverty line, while in 2011 the percentage of impoverished population was 18 percent. This means that over the past two and a half years the population of the Russian Federation has been greatly impoverished. This is associated with the withdrawal of money abroad at a catastrophic scale. The numbers quoted by Igor Bogdanov are shocking. If the official capital outflow abroad was $67 billion last year, according to the Russian Academy of Sciences, this year the number is about $100 billion. At the same time Russia is not successful at attracting investment into the country.

Will the vector of development proposed by the academic economists of the RAS save the economy? It is difficult to predict whether the Government will consider their calculations when preparing long-term socio- economic development plan of the country through 2030. Pravda.Ru talked to an expert in economics who did not participate in the drafting of the report to find out whether the proposed measures to stimulate the economy were effective.

"I'm a little less optimistic than Fortov, but can agree with him about the direction," shared his opinion head of the Laboratory for the Study of the Market Economy at the Faculty of Economics Andrei Kolganov. "I believe that we need to really step up in the first place to encourage the intellectual development of the nation. This is the main link that will allow adjusting the rest. The problem is that the intellectual potential that we have is sufficiently developed (although further development is needed), but it all depends on how it is used, and this is the main issue. It is not about conducting research and development work, but application of this knowledge. This is the main obstacle, the main factor that prevents the use of this intellectual potential."

Indeed, in Russia today the demand for the latest developments is very weak, despite the fact that talks about innovation are frequent. Who buys scientific development of Russian geniuses? Rather, the question is rhetorical. As State Duma deputy Mikhail Emelyanov recently told Pravda.Ru, even science city "Skolkovo" works mainly for foreign demand. It is very sad that neither the government nor businesses are interested in innovations. Meanwhile, worldwide the IT-segment is considered as the most advanced and innovative one, and attractive as an investment. Silicon Valley in the United States was built based on the interest in the technologies of the future and significant sums of money revolving around these technologies. Russia is too obviously lagging behind in this respect compared to the advanced economies.

"Our economy was not receptive to technological progress and innovation. Our businesses, both private and public, are not very much inclined to finance scientific and technological development and research. They prefer to use the existing ones instead of investing in the development of new technology," said economist Kolganov. "All the efforts, in my opinion, should be directed at overcoming this problem instead of advancement of research. Russian scientists are sufficiently engaged in research, it is about letting this research into production."

Head of the Russian Academy of Sciences Vladimir Fortov made a similar comment ​​at a meeting with the President, noting that "it is often easier to implement developments abroad than in Russia." Therefore we may hope that measures to stimulate demand for intellectual resources will also be considered. Economists estimate that if priorities are set according to the developed plan, GDP growth at the rate of 6-8 percent may be expected. Understandably, the report of the Russian Academy of Sciences is only part of the work to find a way out of the impasse faced by Russia last year. Now the biggest decisions are up to the government.

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