Russia will have to form a model of economic development which will secure her a prominent place in modern world, wrote to Prime Minister Dmitry Medvedv in the article “Socio-economic development of Russia: the appearance of new dynamics,” published in the journal “Questions of Economics” (.pdf).
The Prime Minister wrote that “this is not a trivial task, although Russia is not the first time deals with it”. According to Medvedev, in the past Russia was able to find answers to global challenges, “there is no reason to believe that this time the situation will be different”.
“In the coming years our country will have to implement a major renewal of its economic system, corresponding to the challenges and changes that we are witnessing in the world social and economic order,” Medvedev wrote in the introductory section.
Medvedev has called the politicization of economic life the most important feature of the present stage of development. “The political factor is increasingly intervenes in economic policies, sometimes even substituting for market competition. Different kind of sanctions is only the most visible manifestation of this trend,” wrote the Prime Minister. He argues that fluctuations in oil prices, in large part, be the result of political agreements, not only the ratio of supply and demand”.
In the article the head of the government has identified five key areas of development: optimization of budgetary policy, structural policy, including import substitution, improving the investment climate and business environment, improving the quality of the state and social development.
Turning to budgetary policy, the Prime Minister promised to continue the optimization of budget expenditures. “Live within your means” means to spend effectively. We will continue the optimization of budget expenditures, reducing spending is less efficient and because of lucrative opportunities by building more efficient,” the article says.
In the section on structural policy Medvedev wrote about the need “to rethink a number of familiar approaches to foreign trade, including the concept of protection of domestic business”. He believes that the accessibility of import in the modern world is no less important than the development of exports. “Consequently, import restrictions often restrictions on exports,” Medvedev wrote.
In addition, the article talks about the need to stimulate entrepreneurship. “The main focus here is ensuring the full freedom of doing business, minimization of risks and threats. First, you need to reverse the negative expectations of businesses to mitigate economic, political and legal risks of business activities. All people should be given the opportunity to freely work, and they earn both for themselves and for the whole country”, — says the author.
He acknowledged that the stabilization measures of the government have been unable to compensate for the main manifestations of the crisis — the fall in the welfare of Russians. “Although we managed to avoid a sharp hike in unemployment — not only in comparison with 1990-mi for years, but with 2009, when unemployment exceeded 9% versus less than 6%, for the last two years people have become poorer. Reduced real disposable incomes, reduced real wages,” — said the Prime Minister.
By the end of 2016 inflation will not exceed 6%, Medvedev wrote. “Inflation has been steadily declining and at year-end will not exceed 6%. And the target of 4%, until recently, many seemed to be fantastic, becomes a reality,” — wrote the head of government.