Prominent economists question accomplishments of Vladimir Putin’s presidency and perspectives of Dmitry Medvedev’s forthcoming reign.

Authors of the report “Would-Be President’s Tasks” presented at the Institute of Economics of the Russian Academy of Sciences yesterday (analysis of Russia’s perspectives in 2008 – 2016) drew the conclusion that systemic problems of development “suggest the necessity to revise the socioeconomic policy promoted in the country.” They do not think that the Russian authorities made proper use of the favorable situation in the external markets i.e. channelled the resources into hi-tech spheres and therefore diversified national economy. Hence the continuing social degradation and primitivization of economy in Russia.

“Owner of private property as the domineering force in the national economy has never appeared. Small and medium businesses are denied legal and economic basis for civilized competition. Major enterprises and whole segments of the national economy in the meantime became monopolies due to privatization and that affected their overall efficiency,” Academician Nikolai Petrakov said. According to Petrakov, the powers-that-be and society face a dilemma: privatization turned out to be a hurdle for economic development while no return to the point where we all started is possible anymore.

As far as scientists are concerned, the powers-that-be remain in the grip of archaic ideas that may only result in continuing degradation.

“Two approaches have been worked out for the next president. Modernization from top to bottom is one, modernization of institutions is another,” Academician Victor Polterovich said. “As a matter of fact, neither strategy performed well anywhere else in the world when tried…” Polterovich was convinced that Russia should follow in the steps of Ireland, Finland, South Korea, Japan, and other countries that did without “modernizations”. (The former “modernization” is promoted by Andrei Belousov of the Economic Development Ministry, the latter by economists Leonid Grigoriev, Alexander Auzan, and Yevsei Gurvich.)

“Disregard of the universally accepted criteria (length of life, quality of education and health care, level of income) is another traditional flaw of the Russian economic policy,” Institute of Economics Director Ruslan Grinberg said. “Economic policy of the next president should be centered around interests of human development.” As for the strategy of development, Grinberg suggested “interactive control” i.e. responsive interaction between society, businesses, and powers-that-be.

By and large, however, economists do not really expect the new president to heed their advice.

“Increase of social inequality is one of the major failures,” to quote Igor Nikolayev of the Department of Strategic Analysis of FBK. “The administrative and pensions reforms, rearrangement of the communal and housing sphere, social benefits to money conversion, and efforts to secure rights of owners in Russia are also on the list of failures… Not to mention high inflation all through Putin’s presidency.”

“All in all, the economic results Russia approaches the presidential election with are anything but encouraging,” Yevgeny Gontmakher of the Social Policy Center of the Institute of Economics said. “National economy’s dependance on raw materials export increased rather than diminished while all speculations on the necessity of diversification resulted in absolutely nothing. When the election is over and the heat is down, objective analysis of what is left to the new president will probably uncover lots of other problems. Unless complicated and difficult economic, social, and political reforms are carried out, Russia may find itself facing a crisis again…”

According to Grinberg, Senior Deputy Premier Dmitry Medvedev knows the theses and provisions economists aired yesterday. The report presented there was drafted for the RIO-Center (Information Society Development Center) probably earmarked for transformation into the Institute of Development. Some observers assume that Medvedev will be offered the post of chairman of its board of trustees. Sources in the RIO-Center declined comment on the reorganization rumors.

“The only reasonable way of changing the economic policy stipulates existence of political opposition that may eventually make it to the top with wholly different economic ideas. It is this absence of political opposition that regularly pushes Russia into crises like the one in August 1998,” Grinberg said.

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