Finances: more competent means more expensive. FBK study of “How Much is Russia?”

Another stage of studies held under the FBK project of “How much is Russia: 10 years later” on the financial sector showed the sector’s intensive development in the last decade: its value increased by 4.7 times and amounted to 221.2 bn roubles.
For the last 10 years the financial activity growth rate including the activities of banks, discount houses, insurance, private pension systems, etc. was the highest compared with the dynamics in the other sectors. The exception was the period of 2009-2011, which was connected with the first wave of the global economic crisis.

Even in 2013 when the growth of Russian economy slowed down dramatically, the financial activity gross value added (GVA) increased by 12%. And in some years (2003, 2005, 2007) the annual growth in the sector totaled 29%.

As the result today Russia with its 5%-share of financing in economy of the country has practically reached the EU level where the corresponding indicator (for 17 countries) is 5.1%. Moreover, today in terms of the share of finances in the economy our country is even ahead of Austria (4.9%), France (4.8%), Germany (4.0% – all the data as of 2012). Interestingly, in Germany – the locomotive of European economy – the corresponding figure for 2004 was 5.2%. It has noticeably reduced in recent years. As to us, however, nobody is going to stop half-way judging by the target figures of the relevant program documents. So according to the RF Financial Market Development Strategy up to Y2020 the ratio of capitalization and GDP should be 104%. In 2012 that indicator was 43%.

The execution of that work could not leave out the efforts to establish an International Financial Center in Russia. Unfortunately, as noted Igor Nikolayev, the FBK Institute of Strategic Analysis director, head of the studies, according to such key rating as Global Financial Centers Index (Long Finance), in September 2013 Moscow was only in the 69th position, and in March 2014 – 73rd, which is absolutely at odds with the plans under the road map to promote Moscow to the 40th position in the ranking in 2014.

Igor Nikolayev also drew attention to the fact that in March 2014 after the famous “Crimea events” the leading world rating agencies changed their forecast for sovereignty ratings from “stable” to “negative”. “It is obvious today that the milestone indicators of establishment of the International Financial Center t by 2018 will not be fulfilled”, added Director of the FBK Institute of Strategic Analysis.

At the same time the FBK experts estimated as a positive result the fact that the portion of those engaged in financial activities with higher professional education increased from 54% in 2002 to 70.1% in 2012. In terms of this indicator the financial sector is second only to the sector of Science and Scientific services where the share of people with a higher professional education amounts to 70.8%. However, taking into consideration the fact that according to the definition it is people with higher professional education who can and should do research and development, the educational level of those engaged in financial activities is the highest.

Detailed materials of the study may be found at skolko.ru.