The prospects of economic development of Russia was one of the central topics of the Vladimir Putin's big press conference. According to the President, the introduction of high technologies and increase in labor productivity, that is, the transition to an innovative economy, should become the basis for future successes. Only in this case it is possible to count on an annual growth of GDP and industrial production, comparable with indicators of the leading world states. "Forpost" decided to find out what risks can negatively affect the Russian economy, how realistic it is to avoid them and meet targets.
Forecasts for the future Russian economy have become more positive. Even international organizations whose representatives were previously very pessimistic are recognized the fact that our country's GDP should grow moderately in the coming years. For example, the World Bank experts believe that in 2018 our GDP will increase by 1.7%. Analysts of Standard & Poor's Global Rating think of 1.6%. Experts of the International Monetary Fund believe least of all in the potential of our domestic economy. They expect growth of 1.2%.
All of these scenarios, for the most part, are based on the simple fact that oil prices are much higher than the level of recent expectations. No one talks about $ 20 per barrel now, so it can be assumed that the Russian government will be able to provide this moderate growth at the current price of black gold.
But according to the forecast of the Ministry of Economic Development, by 2020 it will reach 3%, foreign experts do not yet believe. For example, Morgan Stanley analysts believe that GDP growth in 3 years will not exceed 1.8%. According to them, the price of oil by this time will not reach the boundaries that will allow much greater dynamics, and they see no other prerequisites for the development of our economy.
Many Russian experts are also cautious about its medium and long-term prospects. Most of them are sure that qualitative growth is possible only in the case of innovative development of the country (in fact, Vladimir Putin said that during his press conference). Otherwise, our upper limit is an increase in GDP of 1.5-2% per year.
"The revenues from resource extraction will decrease every year, and the cost of extraction them will increase," says Dmitri Peskov, director of the Young Professionals Division of the Agency for Strategic Initiatives. – Accordingly, the budget fill rate will begin to decrease. At the same time, the public demand will continue to grow. This trap is one of the main threats to modern reality."
The way out of this trap can be the creation of value-added chain (VAC), that is, enterprises cooperating with each other and creating, as a result, direct consumption goods. Each link in such a chain, from a company that extracts raw materials and to a manufacturer of finished products, provides additional job positions and fills up budgets of various levels. In fact, now a large number of effective VACs determines the competitiveness of states, their level of development and place in the production cycle.
The petrochemical industry is a perfect example. Due to movement along the processing chain – from raw materials to petrochemical intermediates, petrochemicals, polymers, and products made of polymers, the value-added chain can amount several hundred percent. Experts say that if 30% of the hydrocarbons that are now exported abroad as raw materials will be included in the value-added chain, our GDP will grow four times.
Today, the Russia's share in the global production of petrochemical products is only about one percent. For the total output of products, we round out the top twenty countries, letting pass not only the US, China and the most developed states of Europe but also Thailand, Taiwan, Brazil, and Iran. We do not produce at all a number of high-added value products, in particular, special composites and additives. Speaking about the production of initial forms of plastics, China today occupies about a quarter of the world market, Europe – 20%, and our country – only 2%.
One way to turn the tide is to join existing value-added chains created abroad. Alexey Kuznetsov, a Russian economist and head of the Center for European Studies at the Institute of World Economy and International Relations (IMEMO), RAS, believes that this would be a positive factor for domestic business. However, he assesses such prospects very cautiously:
"It is a positive factor that our business began to talk about creating value-added chains. Even ten years ago, it was hard to think about. But the problem is that the business has not really figured out how these chains work. General picture about this, of course, exist but whereto specific mechanical engineering or metallurgical plant should be integrated, scientists cannot explain yet in simple terms. Now there are generalities about the fact that Russia can become a link between the European Union and Pacific Asia, or, thanks to our breakthrough achievements in narrow niches, connect to the value-added chains of European companies. Of course, this is all fine, but the question is very simple: what tools will allow to achieve it and how will operate such agreements, given that our business has quite a small experience of building the same energy alliances, the same joint ventures for the development the markets of third countries".
Alexey Kuznetsov reminds that Russia is traditionally perceived by Europe, first of all, as an attractive sales market or a distributor of energy resources. And the value-added chain for our country is usually built not in the best configuration. Either we are a supplier of raw materials and start the VAC, which then goes far beyond the horizon, without any benefit to us, or, on the contrary, we are in its tail, at the final stage of production, which often represents the only assembly of the product in screwdriver industries. Neither option implies the creation of high added value, nor most importantly, is it not part of the innovative economy.
As an alternative to cooperation with Europe, experts propose to create value-added chains in Russia or in the territory of EurAsEC (Eurasian Economic Union). Last year, the Economic Commission for Europe (ECE) approved the first priority Eurasian technological platforms. They cover such fields as space and geo-information technologies, biomedicine, supercomputers, light-emitting diodes, solid mining technologies, biotechnologies, food and processing industries of the agro-industry, agriculture, textile and light industry.
It is assumed that these platforms will become a tool for the formation of an innovative future economy, stimulate technological renewal and increase the global competitiveness of industry of all five countries that are members of the EurAsEC.
The Eurasian Development Bank (EDB) will provide financial support for industrial cooperation in the Eurasian Economic Union. It is planned that at the next meeting of the ECE-EDB ad hoc working group, specific projects will be considered involving the creation of value-added chains, and decisions on their possible funding will be made.
In the photo: "Polyom" Omsk polypropylene plant LLC