Gaidar Readings Continue in Oryol

Director of the Central Russian Institute of Management – RANEPA Oryol branch Pavel Merkulov and a representative of the Government of the Oryol region delivered welcoming speeches.

RANEPA rector Vladimir Mau spoke about the post-crisis structural transformation of the economy. Pavel Merkulov delivered the report “Youth entrepreneurship as a factor of sustainable social and economic growth”.

Gaidar Institute leading researcher Alexey Vedev spoke about the medium-term forecast of the development of the Russian economy.

Gaidar Institute leading researcher Ilya Sokolov presented the report “The budget as an instrument of structural transformations in the Russian economy”. He said that the federal budget still maintains an inert spending structure as non-productive expenses continue to be the main expenditure item: the share of army and social expenditures is about 60% of all federal budget expenditures. According to him, in the period from 2000 to 2016, social expenditures showed the most significant growth. Their share in GDP increased by 1.8 times, their share in the spending structure – by more than 1.6 times (from 21.6% to 34.3% of total expenditure). At the same time, in the period from 2000 to 2016, the share of spending on national defense in GDP increased by 1.6 times while its share in the spending structure grew by 1.5 times.

“The budget can not be called a development budget, because productive expenditures – those on human capital and infrastructure, which is a stable trend in recent years – were underfinanced. In the budget of the enlarged government, our productive expenditures make 11% of GDP while total expenditures make 35–36% of GDP (in the federal budget, this share is half as big – 15%),” Ilya Sokolov noted.

At the same time, the volume of productive expenditures that ensure long-term economic growth is insufficient. “Increasing productive expenditures through reducing unproductive ones is impossible on a full scale because of the Russian society’s traditionally high demand for income redistribution and public goods, as well as due to changes in geopolitical conditions,” Ilya Sokolov stressed.

Presentation to the report >>>