Russian economy in 2008. Trends and outlooks (Issue 30)

Publication date
Tuesday, 05.05.2009

Authors
V. Mau S. Drobyshevsky О. Kochetkova P. Trunin I. Sokolov V. Nazarov М. Kazakova А. Siluanov S. Sinelnikov-Murylev А. Mamedov V. Nazarov P. Kadochnikov N. Burkova О. Izriadnova Yu. Bobylev Е. Astafieva L. Sycheva L. Mikhailov Е. Khudkо А. Shadrin S. Tsukhlo О. Izriadnova L. Freinkman А. Kaukin V. Dashkeev Е. Ilukhina R. Yanbykh N. Shagaida G. Rodionova N. Karlova N. Volovik А. Surinov I. Kolosnitsyn S. Prikhodko L. Karachurina S. Shishkin Т. Kliachko I. Dezhina G. Malginov А. Radygin М. Kuzyk А. Abramov Е. Apevalova Yu. Simachev О. Smirnova G. Zadonsky G. Sternik G. Malginov V. Zatsepin V. Tsymbal N. Mironova А. Levashenko I. Tolmacheva I. Starodubrovskaya

Series
Russian Economy: Trends and Perspectives

Contents

Table of Contents

Section 1.
Socio-Political Context    9
1.1. The drama of 2008: from economic miracle to economic crisis    9
1.1.1. The peculiarities of the present crisis    10
1.1.2. The causes of the crisis    11
1.1.3. Reaction to the crisis    16
1.1.4. Russia’s struggle against the crisis    19
1.1.5. Some lessons of the past anti-crisis experience    22
1.1.6. The priorities and risks of the 2009 anti-crisis policy    24
1.2. Anti-crisis policies in foreign countries    25

Section 2.
 Monetary and Budgetary Spheres    29
2.1. The Monetary and Credit Policy    29
2.1.1. The Monetary Market    29
2.1.2. Inflationary Processes    33
2.1.3. The State of the Balance of Payments    36
2.1.4. Main Measures in the Monetary and Credit Policy Area    43
2.2. The State Budget    48
2.2.1. The General Characteristic of the Budget System of the Russian Federation    48
2.2.2. Analysis of execution of the federal budget of RF in 2008    52
2.2.3. Analysis of collection of main taxes to the budgetary system of RF    56
2.2.4. Expenditures of the Budgetary System    63
2.2.5. Assessment of Budget Parameters without Regard to the Contribution of the Oil-and-Gas Sector  and the Impact of the World Oil Prices    66
2.3. Intergovernmental Relations and Subnational Finances    72
2.3.1. Major Trends in Relations between Budgets of Different Levels    72
2.3.2. Measures, taken by the RF government  to mitigate crisis impacts to the Regions    80
2.3.3. Federal budget draft for 2009 and until 2011 for the allocation  of intergovernmental transfers to other levels of the budgetary system    84
2.4. Tax Policy in Crisis Situation    89
2.4.1. International Experience in Tax Policy    90
2.4.2. Some Theoretical Considerations in Regard to Effectiveness  of Counter-Cyclic Tax Incentives in Economic Activity    92
2.4.3. Necessary Measures of Tax Policy in the Russian Federation    96
2.5. Russian financial markets    99
2.5.1. The government securities market    99
2.5.2. The market for the Municipal and Subfederal Borrowing    107
2.5.3. The corporate bond market    117
2.5.4. The stock market    120
2.5.5. Investments of pension savings in the system of mandatory pension insurance in 2008    145
2.6. Scenarios of Development of Russian Economy in 2009    154

Section 3.
Real Sector    158
3.1. Macrostructure of production    158
3.1.1. Influence of Internal and External Demand  on GDP Dynamics and Structure    158
3.1.2. Final Consumption of Households and Changes  in Parameters of Population’s Life Standard    162
3.1.3. Dynamics and Proportion of Gross Saving  and Gross Accumulation in GDP    165
3.1.4. Specific Features of Formation of GDP as Broken by Incomes    166
3.1.5. Dynamics and Structure of production by Kinds  of Economic Activities    171
3.2. Situation in Industry    191
3.2.1. Beginning of Crisis: Chronicle 2008    192
3.2.2. Competition in Russian Industry    204
3.2.3. Competitiveness of Russian Industry    210
3.2.4. Staff and Labor Productivity    218
3.3. Restrictions to economic growth in industry on the eve of the crisis    230
Section 3.4
3.4. Investments in Real Sector of Economy    247
3.4.1. Internal Domestic Investments in Fixed Assets    247
3.4.2. Foreign Investments    253
3.5. Russian Agrifood Sector: Performance and Trends    258
3.5.1. Organizational structure of agriculture    258
3.5.2. Agricultural output and structure of farm production    259
3.5.3. Agricultural labour    265
3.5.4. Farm financial performance    266
3.5.5. Production and availability of agricultural inputs    268
3.5.6. Food industry performance and food security doctrine    270
3.5.7. Foreign trade    271
3.5.8. Basic commodity markets    272
3.5.9. Agricultural land market    283
3.5.10. State program for agricultural development and regulation of agricultural and food markets in the RF constituent members for 2008-2012    286
3.6. Foreign Trade    291
3.6.1. Foreign Trade Turnover    291
3.6.2. Situation on the World Market    292
3.6.3. Situation at World Market    295
3.6.4. Dynamics of Main Russian Indices of Foreign Trade    299
3.6.5. Geographic Structure of Foreign Trade    303
3.6.6. Regulation of Foreign Trade    305
3.6.7. Negotiations on Accession to World Trade Organization    310
3.6.8. Project of External Economic Strategy  of Russian Federation Up To 2020    312

Section 4.
Social Sphere    316
4.1. The population’s finances and the consumer market    316
4.2. Migration processes    320
4.2.1. The role of migration in population size dynamics    320
4.2.2. Labor migration    326
4.2.3. Emigration    335
4.2.4. Internal migration    337
4.3. Brunches of socio-cultural sphere    339
4.3.1. Development of the Educational System in 2008    339
4.3.2. Health Care    358
4.4. State of the Sphere of Research and Innovation in 2009    369
4.4.1. Strategic Plans of Development of Science  and Technological Innovation    369
4.4.2. Developing the Legal Regulation of the Scientific  and Innovational Activities    371
4.4.3. Financing of Research: Indicators and Mechanisms    375
4.4.4. Supporting Mobility of Research Cadres    377
4.4.5. Organizational Reform of Science    380
4.4.6. Integration of Science with Education, Creation
of the Research Universities Network    383
4.4.7. The Innovational Infrastructure at Work: Institutes of Development    387

Section 5.
 Institutional Problems    391
5.1. Property Policy in the Financial Crisis    391
5.1.1. The overall process of property redistribution    391
5.1.2. External corporate debt and a new phase of state expansion    393
5.1.3. Anti-Crisis measures in the context of increasing public sector    396
5.1.4. Privatization    402
5.2. The State of Property Relations, the Role of the Public Sector, and Privatization    404
5.2.1. The Magnitude of the Public Sector, Its Elements and Main Characteristics    404
5.2.2. Medium-Term Privatization Plans    409
5.2.3. The Impact of the Dominial Presence of the State  on the Structural Policy in Individual Sectors and Problems  of Solidification of Its Position in the Economy    412
5.2.4. Budgetary Effect of the State Property Policy in 2000-2008    420
5.2.5. A Possible Effect of the Financial Crisis  on the State of Property Relations    429
5.3. Public Corporations: main development directions and trends in 2007-2008    434
5.3.1. Specifics of public corporations development in 2007-2008    435
5.3.2. The development of corporate management  in the established public corporations    445
5.3.3. Major trends in the changing of roles and positions  of public corporations    451
5.4. Corporate Conflicts    454
5.5. Stock Market in the Crisis Conditions: Accumulation of Institutional  and Structural Imbalances    465
5.5.1. On the Stock Markets’ Capacity and Risks    465
5.5.2. Main Parameters of the 2008-09 Crisis on the Financial Market    467
5.5.3. Common and Distinguishing Features  of the 1997–98 and 2008-09 Crises    470
5.5.4. Problems with Attracting Foreign Institutional Investors  to the Russian Market    476
5.5.5. Impact of the Stock Marker on the Economy    480
5.5.6. Fundamental Challenges of the Domestic Market for Bonds    486
5.5.7. The Interconnection between the Stock Market and Residents’ Savings    497
Section 5.6
5.6. Practices of Regulation of Monopolistic High Prices in Russia in 2008    501
5.7. Russian Market for Housing and Mortgage    507
5.7.1. The Russian Housing Market in 2008: from a Eight-Year  Growth to the Crisis    507
5.7.2. The Mortgage Market    525
5.8. The Military Economy and a New Stage of the Russian Military Reform    532
5.8.1. Doctrinal Documents and their Impact on the Military Economy    532
5.8.2. The August 2008 Events and Their Effects  on the Military Reform    534
5.8.3. Changes in the Military Manpower Policy, the System  of Manning and Social and Economic Provision of the Military    535
5.8.4. Modification of the Military-Technical Policy and Plans  of Equipage of the Armed Forces of RF    537
5.8.5. Peculiarities of the Military-Budgetary Policy  and the Problem of Openness    539
5.8.6. Development of Russia’s Military Establishment: Trends and Outlooks    551
 
Annexes 1, 2
An overview of important alterations in the sphere of tax regulation  and civil legislation introduced in 2008    553 
Legal backing behind the attractiveness of the tax system of Cyprus for Russian taxpayers    578

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