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Russia's Choice: modernization and anti-crisis measures

Russia anti-crisis policy in the history of the crisis also has gone through several stages.

• The first signals of the crisis appeared in the second half of 2007, when the outflow of capital from global markets triggered the deterioration in liquidity in the banking system. Bank of Russia has responded to an advanced tool to provide liquidity to banks, due to what the situation was stabilized.

• In the first weeks of the most acute phase of the global crisis (September-October 2008) in Russia prevailing view that the crisis is largely bypass her side. Therefore anti-crisis measures of the time were aimed at mitigating the effects of capital outflows and the closure of global markets. To do this, use additional tools to enhance the stability of the banking system to a liquidity crisis (the extension of guarantees on deposits, insurance, money market transactions, the introduction of unsecured loans, dokapitalizatsiya DIA) and the allocation of funds from the National Welfare Fund for the refinancing of foreign loans ($ 50 billion) and support the stock market (175 billion rubles.).

• Pretty soon came the understanding that the financial crisis of this magnitude translates into a profound global economic crisis and led to a sharp drop in demand and the collapse of the prices of basic commodities of Russia's exports. Against the backdrop of mass transfer of savings from rubles to the currency (in total over the last months of 2008 - the first months of 2009 the population has acquired about $ 50 billion) and fall of reserves of the Bank of Russia, had to think about reducing or at least optimize the budget, and changing approaches to monetary policy. Bank of Russia has chosen a policy of gradual devaluation, which had some positive effects. Together with the policy of granting unsecured loans. First, the gradual devaluation implement transfer of funds from the state - the banks and stabilize the banking system. Secondly, this policy has enabled the private economic agents (people and companies) are gradually convert savings into the currency and thereby limit the losses from the devaluation. But these positive points, and had to pay. In the context of high devaluation expectations jumped interest rates, which adversely affected production. In addition, as in the 90's, currency speculation is temporarily transformed into one of the most profitable activities. Once most of the necessary devaluation took place and was to stabilize the situation in the banking sector, the Bank of Russia was forced to move to a policy of stabilization devaluation expectations and raise interest rates. Fortunately for Russia, this period did not last long.

• Largely due to anti-crisis measures major countries of the world, in the spring of 2009 the situation on the stock and currency markets began to stabilize. As a result, the Bank of Russia and the Government were able to implement anti-crisis measures related to the weakening of the policy.

Russia Program anti-crisis measures is quite extensive, but because it can distinguish three main areas.

1. Priority was given to measures of social character (increase of pensions, the creation of public works to place the main employment of staff) and support for individual enterprises, and in this case, the causes and areas of support were also social dimension. It is obvious that the support VAZ only partially connected with the desire to develop the automotive industry, but is largely aimed at stabilizing the social situation in the region. However, in this respect, Russia's government do not differ much from the governments of other countries. Nevertheless, one of the effects of anti-crisis measures in these areas was to protect the interests and support the owners and management are in a difficult economic situation of companies.
Unlike other countries, owners and managers of companies rescued by the state in a situation where they were on the verge of bankruptcy, have not been changed and affected minimally.

2. The second direction of policy was the adoption of measures to support the banking sector, which allowed Russia's banking system to survive without major upheavals. In this case, emphasis was also placed on the preservation of current institutions and current owners.

3. The third area - additional intergovernmental transfers.

4. The fourth line - support the demand by increasing government procurement. This measure is mainly referred to the automotive and construction sectors. Its effect is still difficult to assess. It is also difficult to assess the effect of measures to support small businesses, such as provision of credit guarantees and subsidies on interest rates, reduced rental, as well as another attempt to reduce the administrative burden.

With regard to the reforms, including in the financial sector, the progress in this direction until the minimum.

In general, the policy in 2009 can be characterized as a policy of relieving the problems encountered during the crisis. As in other countries, in most cases, this policy was incompatible with the objectives of modernization of the economy, which is particularly well illustrated by the policy to reduce employment and unemployment. Russia went on the European path, trying every effort to retain employment, and using both administrative levers, and the organization of public works directly on the principal place of employment of staff. In terms of the tasks of modernization, it would be desirable to allow companies to shed excess labor, increase productivity and efficiency of their work.

The fact that in most countries of anti-crisis measures until recently not always been the nature of modernization is associated with the depth of the crisis and does not negate the need to move it to the modernizing measures. For Russia, this is particularly relevant, and high rates of recovery growth, which according to official statistics showed the economy in the fourth quarter, creating the opportunity for this objective. Therefore, in 2010, an important element of the policy should be reforms to begin to address the key issues that emerged during the crisis and reform, promoting economic modernization. The main directions of such a policy might be:

1. The financial sector was the weakest link in times of crisis, so action is needed to strengthen it. In particular, the possible next steps:
a. Following the example of other countries in the analysis of weaknesses in the regulatory system and making appropriate changes, taking into account the latest recommendations of the FSB and BIS; b. Also, following the example of the leading countries in developing approaches to the management macroprudential and systemic risks, including the regulation and mechanisms of financial recovery or elimination of non-bank systemically important financial firms. For Russia, the problem of systemic risk, not less important than for other countries: today it is clear that excessive credit boom in the pre-crisis years, created just such risks.
c. Modernization of the regulatory framework for the development of derivatives and fixed-term financial instruments, which helps to reduce volatility in the financial and currency markets. The crisis should be perceived as an opportunity to create in Russia a modern financial market, having learned the mistakes of others. Therefore, we should not ban the tools operating in other countries, and advance to take into account others' mistakes when creating their own regulatory framework.
d. Consolidation of the banking sector and market mechanisms for their promotion. e. Abolition of excessive regulation of ongoing activities (glass thickness, size of doors, control over the discipline of the use of cash bank customers, storing all transactions in paper form, etc.) to enhance the global competitiveness of Russia's banking sector. Most of these rules have been preserved in Russia since the Soviet monobanka and have no relation to modern methods of management of operational risks. Moreover, they forced banks to bear the additional costs, thereby undermining their competitiveness.

2. The crisis revealed the ephemeral nature of the "shortages" of which much has been written in the pre-crisis years. There really is a huge shortage of personnel of certain qualifications (and the managerial and workers), and this problem must be addressed, including through education policy. On the other hand, many enterprises there is excess employment at the expense of workers who do not meet the qualifications for his position. This situation is in many cases dates from the late 1980's. During the boom, like excessive retention of employment is not a problem. But in times of crisis, began to work incentives more effective, including through optimization of employment. Crisis Policy in 2009 to a large extent was to retain existing jobs. But in the future of stored jobs will still be reduced, so you should consider the possibility of creating new jobs (which is related to investment promotion and small business development), training for people who lost their jobs and workforce migration from unpromising areas.

3. Infrastructure remains Russia's "Achilles heel", and the anti-crisis policy up to now not take into account opportunities to stimulate demand and employment through infrastructure construction. However, simply increasing the funds spent on building infrastructure, not enough. Its effectiveness must be enhanced in two ways: a) a clear understanding of the priorities of spatial development, b) improving the price / quality of construction, including through greater use of instruments of public-private partnership. The latter must be modernized so that they become more attractive to international financial companies specializing in the structuring of infrastructure projects.

4. Traditional for Russia remains the issue of quality of institutions: regulatory burden on business (including the transition to the principles of insurance, not government control), customs administration, corruption, the quality of the judiciary and government in general. Russia's position in international rankings of quality of institutions in recent years, steadily deteriorated, and the need for clear program of change. In this case the fore the problem of reforming the institutions that seemed to have no direct relation to the regulation of the economy: the police, army, etc. An important point in this context - explanation of the direct perpetrator (government officials) goals and objectives of reform, and training of their technical points. A recent survey of the World Bank and CEFIR showed that many employees of regulatory bodies are not aware of legislation and knowledge of the rules is positively correlated with their performance.

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