Social and innovative turn of the Russian economy: plans and reality

Социальный и инновационный поворот российской экономики: планы и реальность
Chief Economist at VEB.RF, Andrey N. Klepach
2021-01-01

GDP recoveryRussian economycoronavirus pandemic recessionincome inequalityresource-based to innovation-driven transition
The black swan of the coronavirus pandemic confused all plans for 2020 and created a global recession unprecedented for the last century. Russia managed to limit the scale of the GDP’s and population mortality’s fall, but the losses provoked, in particular, by the seven years of stagnation, are great. Russia will be able to restore pre-crisis production levels in a year and a half, perhaps faster, but it will be extremely difficult to compensate for the population’s losses. There is a consensus that a transition to sustainable long-term growth with the growth rates exceeding the global ones will require powerful systemic changes and a high level of public trust. The most acute societal challenge is a low level of personal income, along with high inequality of income, wealth, and social opportunities. The formation of a new model of development, combining resource and hydrocarbon advantages with a new model of human capital, infrastructure and technologies, is decisive for long-term growth. We can do this only under condition of creation a new financial and managerial system in the country.
1
A major societal challenge is low personal income combined with high inequality of income, wealth, and social opportunities.
2
Achieving this new model is possible only with creation of a new financial and managerial system in the country.
3
Long-term growth depends on a new development model that combines natural resource advantages with upgraded human capital, infrastructure, and technologies.
4
Russia can restore pre-crisis production levels within about 1.5 years, but compensating for population losses will be extremely difficult.
5
Russia limited the scale of GDP decline and population mortality compared to worst-case scenarios, but losses from prior seven-year stagnation remain large.
6
Sustainable long-term growth exceeding global rates requires powerful systemic changes and a high level of public trust.
7
The COVID-19 pandemic caused an unprecedented global recession and disrupted economic plans for 2020.

Russian economy (national economic system)

Transition to a social and innovation-driven development model, including reforms of human capital, infrastructure, technologies, and creation of a new financial and managerial system to achieve sustainable long-term growth and reduce income inequality

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2021-01-01
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Chief Economist at VEB.RF
Andrey N. Klepach
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