FBK’s Economic Club Experts Discuss Weak Spots of Russian Economy

Can we say that the economic growth in Russia has slowed down? What are the dangers of voluntarism in state statistics? Who needs national projects? These were some of the questions discussed by top Russian experts at the meeting of FBK’s Economic Club titled “Weak Spots of the Russian Economy. Should the Government be Concerned?”

In his opening speech, Igor Nikolaev, Director of FBK Strategic Analysis Institute, shared his feeling that there were certain concerns in senior government circles about the economic situation and development. This is indirectly confirmed by the problems with statistics when certain data raise too many questions, the revision of earlier adopted decisions and invention of measures that only increase the potential, rather than aim to achieve actual growth.

“Why do they worry? First of all, because they understand that the targets set by the president will not be reached by 2024. Secondly, everybody understands that sanctions are a big setback for the economy. They try not to talk about them but it is getting impossible to ignore the problem. Moreover, the global economy is at the brink of another crisis, which will inevitably hit Russia,” he said.

Yakov Urinson, a former Minister of Economy of Russia, spoke about modern statistics and noted that in spite of existing discrepancies, the quantity of information gathered allowed economists to make many interesting but mostly alarming conclusions.

“The growth rate has been declining since 2014. Productivity is slowing down, the structure of the economy is getting worse, and so is the structure of the industrial production and export. The capital outflow and the brain drain are hurtful in the present situation and over the long term. And the main obstacle for normal development is the lack of guaranteed rights of ownership,” Yakov Urinson said.

According to Maxim Buev, Pro-Rector of the Russian Economic School, there should be no illusions about the long-term prospects of our economy.

“We will still be the country that exports raw materials in one form or another. The main question is whether we will be able to diversify production and create the manufacturing industry apart from the main export,” he said.

In the conclusion, Nikita Maslennikov, Advisor at the Institute of Contemporary Development, spoke about the structural policy and explained that it is a set of regulations affecting the investment climate.

“There will still be next to none growth without active private investments. And it is possible only when there are clear rules of the game that are observed by everybody. Rights of ownership should be unequivocally protected, the tax system should be predictable, tariffs of natural monopolies should be clear and justice should be inevitable and non-selective.

FBK’s Economic Club is a unique discussion platform where journalists can meet well-known economists, politicians and public officials in order to discuss a wide variety of economic issues. Analytical reports prepared by FBK are also presented in the Club.