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No One Will Be Interested by Oil Prices

The development of the strategy of socio-economic development of Russia until 2030 (2020) has begun, despite the fact that the previous document had never been officially approved. Conceptual approaches to form the new strategy were discussed on the panel discussion, which was held in the framework of the VII Gaidar Forum. The participants of the discussion were ministers of  the financial and economic block of the government together with the experts.


Internal and external risks

Economic Development Minister Alexei Ulyukayev suggested to consider whether the long-term strategy development is useful? In his opinion, there are "two risks - the discrepancy between the strategy and decision-making as well and a lack of responsibility for the strategy," The risks should be avoided. "Risk assessment on strategizing means correct economic policy", - says Minister.

Another significant risk Ulukaev sees in the change in consumer behavior of the population, which is shifted from the consumption model to savings. However, such a shift can serve as a driver of the development.

"Powerful saving activity creates a resource that will provide the foundation for investment growth, if relevant institutions and instruments are properly built" - Alexey Ulyukayev said.

Another external risk, according to the minister, - the closure of the global capital markets for Russian borrowers in the coming years. But this challenge will help to transform the model of domestic savings, if it is possible to increase the capitalization of the banking system due to the partial privatization of the largest state-owned banks - Sberbank and VTB, Ulukaev said.

Properly defining the objectives and global trends in the long-term strategy development would not be  useless occupation, he said.

Budget adaptation

The most important tasks in the long and short term are prioritization and adaptation of budgets an public sector to the new conditions. The alternative - a spontaneous budget adjustment through higher inflation, as it was in 1998-1999.

To avoid such negative scenario,

ministries and departments should prioritize expenditures based on the appropriations for the year 2016 to cut inefficient expenses.

In addition to the optimization of budget expenses necessitated by the decline in world oil prices (it could be around 10%), the Finance Ministry intends to maximize the growth of budget revenues  and privatization of state property is one of the potential sources. And also to use unallocated resources of the Reserve Fund. Tough fiscal policy is to be continued, because the cost of borrowing for Russian is high enough.

Modular base

Minister Mikhail Abizov identified two basic models for the formation of long-term strategies. One of them is the visionary one, "when public policies are developed on the basis of a targeted description of the main institutions and transformation thereof." The second model consists in "technological strategies that are based on clear operational plans on annual basis."

The opinion of the Expert Council under the Government of Russia, according to Michael Abyzov is that the emerging strategy for 2030 shall consist of three basic modules. The first module includes "a set of principles and rules of the government, as well as the main tracks of development". The second module: tactical and operational, that is, a detailed program of actions for the first six years of the strategy. The third module - "formation of an effective dashboard, a kind of tuning fork", which allows timely synchronize operational plans with long-term goals, change them if necessary, make the right decisions on the reduction or increase of certain expenses.

The mistake in the formation of strategies 2020 according ti Michael Abyzov is insufficient involvement of the political elite. According to him,

a new strategy should be developed but "with a deep involvement of the political and bureaucratic elites, not only experts should be involved. The development should be based "on a very good sociology and analysis of international experience."

Quality development strategies as a holistic document will take at least 1.5 - 2 years, the minister said. It will be in demand if interests of the major economic actors and society are taken into account.

Strategy as the art of interaction

The State alone cannot cope with the implementation of social policy, First Vice-Rector of the National Research University "Higher School of Economics" Lev Yakobson says. "We really need a strategy of social policy, a strategy, that is the art of interaction between the state on the one side and civil society, business of the state and the consumer on the other side," - said the expert.

The formation of the new strategy, according to the chairman of the Budget and Tax Committee of the State Duma Andrey Makarov, should be preceded by analysis of the situation we are in, and on the willingness to acknowledge mistakes.

"The main question of any strategy should be as follows: how to regain the trust?" By the way, speaking of the trust was the Chairman of Russian Government Dmitry Medvedev at the previous Gaidar Forum.

Dean of the Economic Faculty of Lomonossov Moscow State University Alexander Auzan fears that the result of the development of the next strategy "will be paper, paper, nothing except paper. The paper no one needs, which generally would not affect the development of the country." To avoid this, the strategy should contain ideas about what you want to achieve.

"We are now in the militarization of the budget mode and restoration of the country's military capabilities. On the other hand, I do not know people who would have objected to the fact that the ultimate goal is high-quality human capital and pride for it. However, we cannot go on with this problem now ", - says Alexander Auzan. There is no economic demand for smart people, so we should start with smart maneuver in the military-industrial complex. Neither demand for long-term strategy.


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