Tomorrow, the Finance Ministry and the Economic Development and Trade Ministry must submit to the Cabinet their final (revised) version of the forecast for Russia's economic development until 2005. The main thesis is known: this country will not be "catching up with Portugal" - at least not in these five years. This conclusion is gathered from the figures finance and economic ministers Alexei Kudrin and Herman Gref already submitted ("provisionally") to Prime Minister Mikhail Kasianov on Monday. The overall economic growth target, as compared with the original version criticized by Vladimir Putin (for lacking proper "ambition"), has been increased by only 1-1.5%.
In particular, the forecast of GDP growth for this year was only raised by 0.2% (to 3.6% overall in the year) - and even this figure was "drawn" at the cost of revising the expected exchange prices for Russian oil Urals. Originally they reckoned on the level of $20.50 per barrel, now this mark was raised to $21.5, which is to make oil companies (and thus the nation) $1.5 billion richer.
The same for the future, in 2003. The Economic Development Ministry plans extra increase in oil exports by 13-16 million tons, which at the price of $21.50-22 per barrel will yield an "extra" $2.1 billion of revenue, hence GDP growth will reach 4.4%. (The previous forecast was based on the oil price of $18.50 per barrel, which secured annual GDP growth by only 3.4%).
The plans for the economic development in subsequent years do not impress either. The forecast GDP growth for 2004 is 4-5.4% (the original version contained the same figures), for 2005 - 5.8% (it was 5.6%). In this way, we will indeed catch up with no Portugal (the poorest in Europe), let alone more developed countries. Moreover, a natural question arises: what will happen to these forecasts if global oil prices do not "wish" to rise to the levels prescribed for them, but, on the contrary, fall? This is unlikely, as there seems to be some improvement in the global economy, but there's nothing that can't happen in our changing world...
Remember also that the president demanded that the government secure stable economic growth of 6-8% a year. Although there is also a question: is the nation ripe for such a growth spurt?
Prime Minister Mikhail Kasianov and reformist ministers (first of all, Alexei Kudrin and Herman Gref) claim: Russia does not need "inflated figures", but structural adjustments, expansion of economic liberty, strengthening competition, and raising productivity. This is exactly what will accelerate the economy to the necessary development rates. The "percentage game" is dubious for another reason today: next year is the peak of payments for the foreign debt. These theses are hard to disagree with. However, don't the ideologues of the present reforms extend another "transition" for too long?
In actual fact, only two of "inward reserves" was added to the forecast revised at the demand of the president. The first is increasing investment in manufacturing (by 7.5%) at the cost of growth in consumer demand. However, wages and salaries in the country are growing at more than modest rates - in the present and next years serious rises are only promised for the military. It is also unclear how the authorities are going to persuade Russian consumers to by mostly domestic goods, but not imports. Last year, for example, imports grew 20% and will grow 11% more this year, experts estimate.
The second "reserve" the government hopes to use is stimulation of business by relieving it of some pressure from administrative and law enforcement agencies. The idea is longstanding, "notorious", therefore the president's address insistently spoke about the necessity of a real, not alleged, decline in administrative pressure on business. It is hard to calculate so far how this will look in reality, or what visible economic effect these measures will have.
These are actually all the innovations. Isn't it too little?
Meanwhile, time is passing by and the national confidence credit the executive branch gained after the change of president is not eternal. Or will the Cabinet again point us toward an indefinitely- postponed "bright future"?
Be the way, in the words of State Statistics Committee head Vladimir Sokolin, the nation did not get off to a running start this year; quite the contrary - it began with a deceleration of economic development rates. While in January-April 2001 industrial output grew 5.6%, this year the growth in the same period only amounted to 3%. The figures for May are expected to be still worse, as Russia was mostly on vacation for the first third of May. (Translated by P. Pikhnovsky)