Economists saw the chance for a “new perestroika” in Russia


The economic situation in Russia increasingly suggests Parallels with the late Soviet Union: GDP growth in the coming years will amount to 1-1,5%, which is comparable with the average annual growth in the Soviet Union in 1978-1990, respectively, says Renaissance Capital in review “New restructuring”, dated 23 Sep. In the 1980’s, oil prices collapsed, resulting in average growth of the Soviet economy at 4.4% for the years 1950-1978 was replaced by a much weaker 1.2% in the remaining period of the Soviet Union, points out the chief economist of “Renaissance” Charlie Robertson. Reforms of Mikhail Gorbachev (glasnost”, “perestroika”) could not improve the economic prospects of the country, nor to save her from political collapse. Today, the collapse in Russia is hardly possible — the economy is too different from the one that was in the 1980s, says Robertson, but may be necessary “new perestroika” to ensure growth rates above 2%.

Russia has five points of potential growth, according to analysts at Renaissance Capital: among them are tourism, agriculture (Russia recently became the world’s largest exporter of wheat) and further progress in the ranking of ease of doing business (Doing Business) world Bank. In addition, to help growth of GDP capable of mortgage lending, where Russia could in theory afford the rate of growth of loans at 100% per year, and investments that can become more attractive as you get closer to the goal of the Bank of Russia’s inflation at 4%.

“Democratization” in Russia can happen in a few years after the recent collapse in oil prices — to 2018-2020, pointed out analysts at Renaissance Capital, drawing an analogy with changes in the Soviet Union, Iran, Mexico and Algeria after the price crisis of the 1980s. Russia, economists say, is to “open semi-authoritarian regimes” for which the probability of transition to democracy reaches its maximum (10%) in the GDP from $15 to 25 thousand per capita. Now in Russia it is $24 thousand, and Russia may have hit the “middle income trap”.

GDP per capita has suffered from the decline in oil prices in the years 2016-2021 will grow annually by about 2%, from the April IMF estimates. This compares with an average annual growth of about 1% in 1978-1990, respectively (the difference is explained by the fact that the USSR was a Communist system, and the Russia market economy), says Renaissance. The authors of the review believe that the new restructuring” is now preparing Alexey Kudrin (he consistently insists on structural reforms and is a Deputy of Vladimir Putin in the presidential economic Council). But Kudrin is unlikely to hold in life is truly profound institutional and liberal reforms, the report says.

“Restructuring” involves a political dimension. According to official data, “United Russia” on elections in the state Duma scored 56% with a turnout of 48%, and given the mandate took in Parliament, 76% (343 out of 450). However, Renaissance Capital refers to the testimony of journalists and bloggers of manipulating the election in the regions, assuming that the official election results do not reflect the real level of support of the authorities. If you believe that the turnout and result of the party of power was overstated, and suggest that in fact the “United Russia” won 40% with a turnout of 40%, the actual support for the government will be closer to 16%”, not 76%, says Renaissance.

The low turnout says about the apathy of voters and the nominal freeze of budget expenditures (in real terms they will fall) can cause the “people’s protests” in the coming years, says Charlie Robertson.

Economist at Renaissance Capital” Oleg Kuzmin predicts that in the coming years, the growth of Russia’s GDP will amount to 1-1,5% in the baseline scenario. Growth can go up to 2-2,5%, if the countries of the West would weaken sanctions against Moscow and in Russia will be increased the retirement age, he said. But “Renaissance Capital” in General, sees little chance of removing Russia from sanctions in the near future.

 

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