Russian Economy in 2011. Trends and Outlooks. (Issue 33)
Publication date
Monday, 21.05.2012
Authors
V. Mau N. Luksha P. Trunin S. Drobyshevsky I. Sokolov Т. Tischenko А. Alaev А. Mamedov V. Nazarov А. Abramov А. Vedev М. Khromov А. Shadrin О. Izriadnova S. Tsukhlo Е. Iluykhina Yu. Bobylev I. Fedorov N. Karlova N. Shagaida R. Yanbykh N. Volovik S. Prikhodko К. Kharina S. Misikhina L. Karachurina Т. Kliachko I. Dezhina G. Malginov А. Radygin Yu. Simachev D. Ivanov М. Kuzyk Е. Apevalova N. Polezhaeva G. Zadonsky G. Sternik V. Zatsepin E. Trofimova V. Tsymbal I. Starodubrovskaya
Series
Russian Economy: Trends and Perspectives
Annotation
The review provides a detailed analysis of main trends in Russia's economy in 2011. The paper contains 6 big sections that highlight single aspects of Russia's economic development: the socio-political context; the monetary and credit spheres; financial sphere; the real sector; social sphere; institutional challenges. The paper employs a huge mass of statistical data that forms the basis of original computation and numerous charts.
The review provides a detailed analysis of main trends in Russia's economy in 2011. The paper contains 6 big sections that highlight single aspects of Russia's economic development: the socio-political context; the monetary and credit spheres; financial sphere; the real sector; social sphere; institutional challenges. The paper employs a huge mass of statistical data that forms the basis of original computation and numerous charts.
Contents
Section 1. Socio-political Context 9
1.1. Economics and Politics in 2011: the Global Crisis and the Quest for a New Growth Model 9
1.1.1. The Results and Lessons of the Year 2011 9
1.1.2. The Global Economic Crisis: Its General and Specific Features 11
1.1.3. Russia’s Economic Policy: the End of the Old Model 16
1.1.4. The New Growth Model: The Supply Economy 20
1.1.5. Political Processes and the Economy 25
Section 2. The Monetary and Budget Spheres 291.1.2. The Global Economic Crisis: Its General and Specific Features 11
1.1.3. Russia’s Economic Policy: the End of the Old Model 16
1.1.4. The New Growth Model: The Supply Economy 20
1.1.5. Political Processes and the Economy 25
2.1. The Monetary Policy 29
2.1.1. The Money Market 29
2.1.2. Inflationary Developments 33
2.1.3. The main measures in the sphere of the monetary and credit policy 35
2.1.4. Balance of Payments and the RUR Exchange Rate 38
2.1.2. Inflationary Developments 33
2.1.3. The main measures in the sphere of the monetary and credit policy 35
2.1.4. Balance of Payments and the RUR Exchange Rate 38
2.2. State Budget 44
2.2.1. The General Characteristic of the Budget System of Russian Federation 45
2.2.2. Analysis of Revenues from Major Taxes into the Budget System of RF 49
2.2.3. Budget System Expenditures 55
2.2.4. Analysis of main Parameters o f the Federal Budget of RF in 2011 and for the Period of 2012–2014.58
2.2.5. Prospects of RF Budgetary and Tax Policy 64
2.2.2. Analysis of Revenues from Major Taxes into the Budget System of RF 49
2.2.3. Budget System Expenditures 55
2.2.4. Analysis of main Parameters o f the Federal Budget of RF in 2011 and for the Period of 2012–2014.58
2.2.5. Prospects of RF Budgetary and Tax Policy 64
2.3. Intergovernmental Fiscal Relations and Subnational Finances 69
2.3.1. Subnational budgets in 2011 69
2.3.2. Financial support from the federal budget 76
2.3.3. Stimulating the constituent territories of the Russian Federation which achieved best results in enhancing regional taxable capacity 79
2.3.4. Establishing road funds of the constituent territories of the Russian Federation in 2012 82
2.3.5. The Federal Law “On the Federal Budget for 2012 and the Planning Period of 2013 and 2014” with regard to allocation of interbudget transfers to other levels of the budget system 87
Section 3. Financial Markets and Financial Institutions 932.3.2. Financial support from the federal budget 76
2.3.3. Stimulating the constituent territories of the Russian Federation which achieved best results in enhancing regional taxable capacity 79
2.3.4. Establishing road funds of the constituent territories of the Russian Federation in 2012 82
2.3.5. The Federal Law “On the Federal Budget for 2012 and the Planning Period of 2013 and 2014” with regard to allocation of interbudget transfers to other levels of the budget system 87
3.1. The Russian Financial Market Post-Crisis Recovery 93
3.2. Russian Equity Market 98
3.2.1. Dependence on the Global market prices 98
3.2.2. Cash inflow / outflow of foreign portfolio investment 100
3.2.3. Forex Rates 103
3.2.4. Competition on the Domestic Equity Market 105
3.2.5. Consolidation of Stock Exchanges and their Transition under the Control of the Bank of Russia and State-Owned Banks 111
3.2.6. The Increase of the Role of the Government in the Area of Regulation and Oversight 116
3.2.2. Cash inflow / outflow of foreign portfolio investment 100
3.2.3. Forex Rates 103
3.2.4. Competition on the Domestic Equity Market 105
3.2.5. Consolidation of Stock Exchanges and their Transition under the Control of the Bank of Russia and State-Owned Banks 111
3.2.6. The Increase of the Role of the Government in the Area of Regulation and Oversight 116
3.3. Financial Institutions in Search for New Ideas for Growth 118
3.3.1. Constraints to the Carry Trading Strategy and Increase of the Financial Leverage 118
3.3.2. Liquidity and the Current Stability of the Banking System 120
3.3.3. Lending on the Rise 123
3.3.2. Liquidity and the Current Stability of the Banking System 120
3.3.3. Lending on the Rise 123
3.4. Governmentalization of the market for Rb-Denominated Bonds 123
3.4.1. An Advanced Growth of Placement of Government Bonds 123
3.4.2. The State of the Corporate Bond Market 126
3.4.3. Competition on the Market for Corporate and Regional Bonds 129
3.4.2. The State of the Corporate Bond Market 126
3.4.3. Competition on the Market for Corporate and Regional Bonds 129
3.5. The Main Risks on the Financial Market 133
3.5.1. Halt of the Growth in the Equity Market Due
to the Pricing Factor 133
3.5.2. The Risks of the Outflow of Foreign Capital 134
3.5.3. Risks of Depreciation of the Ruble in the Mid-Term Prospect 136
3.5.4. Risks of Accumulation of the External Debt by Banks and Non-Financial Companies 137
3.5.5. Operating Risks of the Stock Market and the Term Market 139
3.5.6. Risks Related to REPO Deals 41
3.5.7. Lack of the Financial Market Development Strategy 141
to the Pricing Factor 133
3.5.2. The Risks of the Outflow of Foreign Capital 134
3.5.3. Risks of Depreciation of the Ruble in the Mid-Term Prospect 136
3.5.4. Risks of Accumulation of the External Debt by Banks and Non-Financial Companies 137
3.5.5. Operating Risks of the Stock Market and the Term Market 139
3.5.6. Risks Related to REPO Deals 41
3.5.7. Lack of the Financial Market Development Strategy 141
3.6. Problems of Attraction of Conservative Institutional Investors 143
3.7. The Role of the Stock Market in Modernization of the Economy and Promotion of Innovations 145
3.7. The Role of the Stock Market in Modernization of the Economy and Promotion of Innovations 145
3.7.1. Contribution of the Market of Corporate Bonds in Real Capital Growth 146
3.7.2. The Impact of IPO of Equities on the Economy 147
3.7.2. The Impact of IPO of Equities on the Economy 147
3.8. The Impact of the Crisis on the System of Domestic Savings 149
3.9. Development of the Banking Sector in Russia in 2011 152
3.9. Development of the Banking Sector in Russia in 2011 152
3.9.1. The Post-Crisis False Start 152
3.9.2. The Structure of Institutional Financial Flows in 2011 152
3.9.3. The Main Trends in the Banking Sector 154
3.9.4. Raised Funds (Resources for the Banking Activities) 156
3.9.5. Assets of the Banking Sector 159
3.9.6. Forecasts of Development of the Banking Sector 164
3.9.2. The Structure of Institutional Financial Flows in 2011 152
3.9.3. The Main Trends in the Banking Sector 154
3.9.4. Raised Funds (Resources for the Banking Activities) 156
3.9.5. Assets of the Banking Sector 159
3.9.6. Forecasts of Development of the Banking Sector 164
3.10. Market for Municipal and Sub-Federal Borrowings 166
3.10.1. Dynamic of Market Development 166
3.10.2. Structure of the Accumulated Debt 167
Section 4. The Real Sector of the Economy 1753.10.2. Structure of the Accumulated Debt 167
4.1. Production Macrostructure 175
4.1.1. Major trends and economic drivers in 2011 175
4.1.2. Major characteristics of GDP utilization 180
4.1.3. Changes in GDP structure formation – by revenue sources 183
4.1.4. Production dynamics and structure by types of economic activity 188
4.1.2. Major characteristics of GDP utilization 180
4.1.3. Changes in GDP structure formation – by revenue sources 183
4.1.4. Production dynamics and structure by types of economic activity 188
4.2. Russian industry in 2011 191
4.2.1. Is Russian industry recovering from the crisis? 192
4.2.2. Dynamics of demand and output 202
4.2.3. Price policies of enterprises 209
4.2.4. Staff problems of Russian industry212
4.2.5. Crediting of industry 216
4.2.6. Response of industrial enterprises to the raising of compulsory insurance contributions (unified social tax – UST) 225
4.2.2. Dynamics of demand and output 202
4.2.3. Price policies of enterprises 209
4.2.4. Staff problems of Russian industry212
4.2.5. Crediting of industry 216
4.2.6. Response of industrial enterprises to the raising of compulsory insurance contributions (unified social tax – UST) 225
4.3. Investment into Real Economy 228
4.3.1. Domestic capital investment 228
4.3.2. Foreign Investments239
4.3.2. Foreign Investments239
4.4. The Oil and Gas Sector 244
4.4.1. The Dynamics of International Prices of Oil and Natural Gas 245
4.4.2. Production Dynamics and Structure in the Oil and Gas Sector 247
4.4.3. The Dynamics and Structure of Oil and Gas Exports 249
4.4.4. The Behavior of Prices for Energy Products on the Domestic 253
4.4.5. Tax Regulation of the Oil and Gas Sector 256
4.4.2. Production Dynamics and Structure in the Oil and Gas Sector 247
4.4.3. The Dynamics and Structure of Oil and Gas Exports 249
4.4.4. The Behavior of Prices for Energy Products on the Domestic 253
4.4.5. Tax Regulation of the Oil and Gas Sector 256
4.5. Russian agrifood sector: performance and trends 261
4.5.1. General outline of agricultural performance 261
4.5.2. Situation on selected agricultural and food markets 271
4.5.3. Russia’s accession to the WTO 276
4.5.4. Modification of agricultural policies in 2011 278
4.5.5. Recommendations 282
4.5.2. Situation on selected agricultural and food markets 271
4.5.3. Russia’s accession to the WTO 276
4.5.4. Modification of agricultural policies in 2011 278
4.5.5. Recommendations 282
4.6. Foreign Trade 284
4.6.1. Situation in the World Economy 284
4.6.2. The Terms of Russia’s Foreign Trade: Prices for Major Russian Exports and Imports 286
4.6.3. Major Indicators of Russian Foreign Trade 289
4.6.4. The Geographical Profile of Russia’s Foreign Trade 295
4.6.5. Regulation of Russian Foreign Trade 297
Section 5. Social Sphere 3074.6.2. The Terms of Russia’s Foreign Trade: Prices for Major Russian Exports and Imports 286
4.6.3. Major Indicators of Russian Foreign Trade 289
4.6.4. The Geographical Profile of Russia’s Foreign Trade 295
4.6.5. Regulation of Russian Foreign Trade 297
5.1. Social standard of living 307
5.1.1. Incomes of the population 307
5.1.2. Inequality and Poverty 310
5.1.2. Inequality and Poverty 310
5.2. Migration Processes315
5.2.1. Permanent Migration316
5.2.2. Temporary Labor Migration 322
5.2.3. Domestic Migration 329
5.2.4. Legislative Innovations 330
5.2.2. Temporary Labor Migration 322
5.2.3. Domestic Migration 329
5.2.4. Legislative Innovations 330
5.3. Results of 2011 in the Educational System 332
5.3.1. Main Drivers of the Educational System’s Advancement in 2011 332
5.3.2. Demographic Factor and Its Impact 333
5.3.3. Financing of Education 333
5.3.4. Uniform State Examination 337
5.3.5. The Tier Level of the Tertiary Education System 339
5.3.6. Strategy-2020 in Education 341
5.3.2. Demographic Factor and Its Impact 333
5.3.3. Financing of Education 333
5.3.4. Uniform State Examination 337
5.3.5. The Tier Level of the Tertiary Education System 339
5.3.6. Strategy-2020 in Education 341
5.4. State of Science and Innovation in 2011 344
5.4.1. The R&D Funding 344
5.4.2. Changes in Organization of Academic Research: Research and Federal Universities 348
5.4.3. Scientific-Educational Centers as a Form of Integration of Education and Research 351
5.4.4. Formation of a World-Class Scientific Base: Megagrants on Creation of University Laboratories353
5.4.5. Modifications in the Research Infrastructure of Science 355
5.4.6. Small-Sized Innovation Businesses 359
5.4.7. Large Corporations: Creation of the System of Incentives to Innovation 361
5.4.8. Development Institutions in the Concept of “Innovation Lift” 364
5.4.9. Technological Infrastructure of Innovation Activity 369
5.4.10. Technological Platforms as a new Mechanism of Creation of New Ties 371
Section 6. Institutional Issues 3775.4.2. Changes in Organization of Academic Research: Research and Federal Universities 348
5.4.3. Scientific-Educational Centers as a Form of Integration of Education and Research 351
5.4.4. Formation of a World-Class Scientific Base: Megagrants on Creation of University Laboratories353
5.4.5. Modifications in the Research Infrastructure of Science 355
5.4.6. Small-Sized Innovation Businesses 359
5.4.7. Large Corporations: Creation of the System of Incentives to Innovation 361
5.4.8. Development Institutions in the Concept of “Innovation Lift” 364
5.4.9. Technological Infrastructure of Innovation Activity 369
5.4.10. Technological Platforms as a new Mechanism of Creation of New Ties 371
6.1. Public Sector Status and Privatization Process 377
6.1.1. Public Sector Share of the Russian Economy 377
6.1.2. Privatization Policy 382
6.1.3. Updates to the Law on Privatization 387
6.1.4. Enhancing corporate governance of business entities with state participation 394
6.1.5. State participation in the economy and structural policy 400
6.1.6. Budget effect of the state property policy in the period between 2000 and 2011 402
6.1.2. Privatization Policy 382
6.1.3. Updates to the Law on Privatization 387
6.1.4. Enhancing corporate governance of business entities with state participation 394
6.1.5. State participation in the economy and structural policy 400
6.1.6. Budget effect of the state property policy in the period between 2000 and 2011 402
6.2. “New Privatization Policy”: Risks, Stakeholder Groups, Constraints, Potential Innovations 408
6.2.1. “New privatization policy” background 408
6.2.2. Stakeholder groups and principal risks 412
6.2.3. “New dimension” of denationalization 416
6.2.2. Stakeholder groups and principal risks 412
6.2.3. “New dimension” of denationalization 416
6.3. Russian Financial Development Institutions: Their Rise and Main Challenges on the Path toward Improvement of Their Performance 420
6.3.1. Main Stages of the Rise of the Russian System of Financial Development Institutions 421
6.3.2. The Development Institutions’ Operational Objectives and Priorities, and Conditions of Projects Support 427
Purposes: 429
6.3.3. Assessment of the Scale and Outputs of the Development Institutions’ Performance, Main Tendencies and Recent Critical Changes 434
6.3.4. Critical Challenges and Possible Ways of Improvement of the System of Public Financial Development Institutions with Regard to Support of Innovation Activity 442
6.3.2. The Development Institutions’ Operational Objectives and Priorities, and Conditions of Projects Support 427
Purposes: 429
6.3.3. Assessment of the Scale and Outputs of the Development Institutions’ Performance, Main Tendencies and Recent Critical Changes 434
6.3.4. Critical Challenges and Possible Ways of Improvement of the System of Public Financial Development Institutions with Regard to Support of Innovation Activity 442
6.4. Bankruptcies in 2009–2011: Post-crisis Dynamics; New Trends; Regulation 451
6.4.1. Dynamics of Bankruptcies (2009–2011) 451
6.4.2. Bankruptcy Legislation in 2009–2011 455
6.4.2. Bankruptcy Legislation in 2009–2011 455
6.5. Self-Regulated Organizations – the Evolution of the Law (2007–2011) 476
6.5.1. Federal Law of 01.12.2007 No. 315-FZ «On self-regulated organizations” 477
6.5.2. Development of the SRO general laws in 2008–2011 481
6.5.3. SRO legal regulation by special laws and its development in 2008–2011. 483
6.5.4. Development prospects of the SRO legislation 494
6.5.2. Development of the SRO general laws in 2008–2011 481
6.5.3. SRO legal regulation by special laws and its development in 2008–2011. 483
6.5.4. Development prospects of the SRO legislation 494
6.6. Russian Market for Real Estate 97
6.6.1. The Land Market 498
6.6.2. Price Situation on the Housing Market 506
6.6.3. Revitalization on the Real Estate Market 509
6.6.4. Dynamic of Placement of new Housing in Operation and Prospects for Institutional Development of Housing Provision Mechanisms 510
6.6.5. The Home Loan Sector 515
6.6.6. Outlook for the Housing Market522
6.6.2. Price Situation on the Housing Market 506
6.6.3. Revitalization on the Real Estate Market 509
6.6.4. Dynamic of Placement of new Housing in Operation and Prospects for Institutional Development of Housing Provision Mechanisms 510
6.6.5. The Home Loan Sector 515
6.6.6. Outlook for the Housing Market522
6.7. Military economy and the military reform in Russia 524
6.7.1. Structural transformations of the Armed Forces 524
6.7.2. The RF military policy and its implementation 525
6.7.3. Improvement of the legal and regulatory framework of the Armed Forces operation 530
6.7.4. Changes in the military staffing policy 531
6.7.5. Social support to the servicemen and their family members 532
6.7.6. Military and financial policy 535
6.7.2. The RF military policy and its implementation 525
6.7.3. Improvement of the legal and regulatory framework of the Armed Forces operation 530
6.7.4. Changes in the military staffing policy 531
6.7.5. Social support to the servicemen and their family members 532
6.7.6. Military and financial policy 535
6.8. Strategy of Socio-Economic Development of the North-Caucasian Federal Okrug: the First Steps 546
Notes
UDC 330(470+571)
BBC 65.9(2Рос)-04
R95
UDC 330(470+571)
BBC 65.9(2Рос)-04
R95
Russian Economy in 2011. Trends and Outlooks.
(Issue 33) - М.: Gaidar Institute Publishers, 2012. 560 pp. ISBN 978-5-93255-342-8
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