La conveniencia de incorporar a Rusia y Turquía a la Unión Europea (página 9)

Consumption was negatively impacted by the geopolitical tensions through the sharp depreciation of the Ruble and related inflation pressures. Consumption growth slowed and its contribution to growth fell to about 2 percentage points in the first quarter of 2014 from 3 percentage points in the first quarter of 2013 (Table 1)… Investment activities contracted due to a more uncertain business environment and the increasing restrictiveness of credit conditions as a result of sanctions… Demand for Russian exports was robust. The contribution of exports to GDP increased to 0.5 percentage points in the first quarter of 2014 from nil a years earlier. On the other hand, imports decreased due to the depreciation of the Ruble and weak domestic demand…

1.2 Labor Market – Still In a Tight Spot

The economic stagnation has been accompanied by employment at near maximum historical levels and low unemployment. Some increase in labor mobility between sectors helped reallocate scarce labor resources. Growth in wage and transfers slowed during the first half of 2014 and negatively impacting real disposable-income growth…

Stable, low unemployment reflects continued tightness in the labor market. Despite slower growth, the demand for labor as measured by the vacancy rate1 remained little changed (Figure 12)… Although labor supply -measured by the economically active population- remains near its historical maximum, it is slowly declining, reflecting long-term demographic changes (Figure 13)…

Real wages grew in line with productivity for the economy as a whole. In the first half of 2014, productivity growth was higher in the tradable sector than in non-tradable sectors (Figure 14). Nonetheless, favorable wage dynamics in the private non-tradable sector led to some improvement in the productivity gap (Figure 15). Developments in the manufacturing sector were more volatile than in other industries however, with productivity growth lagging wage growth in the first quarter before a sharp reversal in the second…

Growth in real disposable income slowed to nil in the first eight months of 2014 from 4.3 percent a year ago (Figure 16). Real wage growth weakened in all sectors, but especially for public employees… The contribution of the public or non-market sector to wage growth is still the largest, but less so than it was in 2013 (Figure 17)…

1.3 Monetary Policy and The Financial Sector – The Elusive Inflation Target

The geopolitical tensions led to increased volatility on the foreign exchange market and a significant depreciation of the Ruble. In response to persistently high inflation pressures, the CBR significantly tightened monetary policy. The financial sector is becoming increasingly affected by the geopolitical tensions and related sanctions, which is eroding the depositors" base and limiting access to credit…

1.4 Balance of Payments – The Big Flight

Balance of payments dynamics reflected the geopolitical tensions, dominated by heightened uncertainty and a depreciating Ruble. While the current account received a strong boost from weaker imports, the financial account deteriorated as net capital outflows surged…

Russia"s current account strengthened significantly in the first half of 2014. The current account (CA) surplus nearly doubled in the first half of 2014 to US$ 44.2 billion (4.6 percent of GDP) from US$ 26.8 billion (2.7 percent of GDP) a year ago (Figure 23 and Table 2)…

Massive capital outflows triggered by the Russia- Ukraine tensions led to a deterioration of the capital and financial account balance and a decrease in net international reserves. Russia"s capital and financial accounts balance worsened to a deficit of US$ 75.3 billion (7.8 percent of GDP) in the first half of 2014 compared to a deficit of US$ 21.2 billion (2.1 percent of GDP) in the first half of 2013… Foreign borrowing decreased in the first half of 2014. Heightened geopolitical tensions, expectations of sanctions and a worsened medium term outlook increased the cost of borrowing for all sectors of the Russian economy and limited their access to international financial markets. After hovering at the level of 160 bps at the beginning of the year, Credit Default Swap (CDS) spreads on 5-year bonds spiked in March to 278 bps and stayed close to this level after a second spike at the beginning of August…

FDI performance in Russia was in the past closely intertwined with capital outflows (Figure 25)… Non-tax haven FDI declined precipitously in 2013, but was partly replaced by FDI from tax havens (Figure 26)…

1.5 The Government Budget – Currency Depreciation and Oil Windfall Mask Medium-Term Challenges

The budget balance improved in the first half of 2014 thanks to the depreciating Ruble, higher oil prices than assumed in the budget, and prudent expenditure management. However, key medium term challenges persist. First, the non-oil deficit remains stubbornly high above 10 percent of GDP. Second, weakness in subnational finances continues with debt levels on the rise. Russia"s fiscal buffers remain below their levels before the global economic and financial crisis, yet investment rules for the National Welfare Fund were recently loosened significantly…

In June, the amendments to the 2014-2016 Federal Budget Law were signed into law. Based on revised macroeconomic assumptions, including real GDP growth of 0.5 percent in 2014 instead of 3 percent and an uptick in the Urals oil price from US$ 101 to US$ 104 per barrel, oil revenue is projected to be 1.6 percent of GDP higher than originally budgeted and non-oil revenue is forecast to drop by 0.1 percent of GDP. Without changes on the expenditure side, the original budget deficit of 0.5 percent of GDP is projected to turn into a budget surplus of 0.4 percent, while the non-oil deficit would rise from the previously projected 9.4 percent of GDP again over the 10 percent mark to 10.1 percent of GDP (Table 6)…

As part of the consolidated budget, subnational finances weakened, resulting in an increase in subnational debt stock… There was a steady increase of debt stock from 2.1 percent of GDP in 2012 to 2.6 percent in 2013, and to 2.4 percent of GDP in the first half of 2014 (Table 7)…

Part II

Economic Outlook

Over the medium term, growth will continue to be determined by slow progress in structural reforms and policy uncertainty emanating from geopolitical tensions. To account for the heightened geopolitical risk the report presents a baseline scenario and two alternative scenarios. The challenges for Russia"s outlook are twofold: consumption growth is likely to weaken even further than projected in the March version of the Russia Economic Report, and recovery in investment demand will be slower than previously expected. The effects of weak growth for a second consecutive year, an increasing household debt burden, and continued high inflation expectations, are likely to depress consumer demand further, slowing this main engine of growth in Russia. These effects are expected to persist for the next two years. With no major structural reforms planned, and microeconomic fundamentals unchanged, investment will remain subdued and there will be only a limited positive effect from import substitution. Similarly, the multiplier effect from the planned increase in public and quasi-public investment expenditures is likely to be modest.

2.1 Global Outlook – Stagnation In The Face of Policy Uncertainty

The report presents three scenarios, the baseline, an optimistic one, and a pessimistic one. Our baseline outlook is one of near stagnation, given the most likely path of continuing Russia-Ukraine tensions and the persistence of related sanctions in an environment of stalling structural reforms. The optimistic scenario projects a small recovery, facilitated by an end to geopolitical tensions and the lifting of all sanctions by the end of 2014. The pessimistic scenario envisions an increasing intensity in geopolitical tensions and further sanctions leading the economy into a low-level recession…

Baseline Scenario Projections

The World Bank baseline scenario is one of near-stagnation due to the continuation of the geopolitical tensions and related sanctions, paired with a lack of structural reforms to increase the economy"s output potential…

Alternative Scenario Projections

The optimistic scenario projects a small recovery following the full resolution of the geopolitical tensions and an end of all sanctions by the end of 2014. This assumes that the tensions would be contained in a peaceful fashion and an orderly resolution will ensue. This would restore access to international capital and financial markets and confidence would start to gradually improve during 2015, although some impact of the tensions would linger. The result would be a slow recovery in private consumption and private investment, supported also by some renewed focus on structural reforms in late 2015…

For the optimistic scenario, the baseline assumptions about fiscal and monetary policy remain intact, while outcomes for external balances are expected to be similar. However, the optimistic scenario contains slightly more favorable projections on inflation dynamics and Russia"s external position…

The pessimistic scenario projects an increasing intensity of geopolitical tensions, which would see the economy slipping into a protracted low level recession. Access to the international capital market would become increasingly restricted for Russian companies and banks, further increasing borrowing costs and hampering investment activities. Additional sanctions (including short term gas trade limitations) over the projection period would translate into heightened policy uncertainty and capital flight, high exchange rate volatility and Ruble depreciation with a detrimental impact on confidence and investment activities. Yet, this scenario assumes that the international community would still refrain from oil trade sanctions…

Under the pessimistic scenario, the assumption for fiscal policy differs from the baseline scenario, while the monetary policy assumption changes little. However, in 2014 the Ruble will remain under high pressure due to a return of large geopolitical uncertainty…

In the pessimistic scenario, external balances would be more profoundly altered as compared to the baseline…

Part III

Paths to Diversified Development in Russia

World Bank research on resource-rich nations suggests that economic diversification is neither necessary nor sufficient for economic development. Interventions to diversify economies appear to work only when they are supported by policies to diversify their assets. There is a stronger correlation between diversified assets and greater efficiency. This means the government needs to worry less about the composition of exports and the profile of production, and more about the diversity of its national asset portfolio – the blend of natural resources, built capital, and economic institutions. This diversification approach implies a rich reform agenda for Russia, as its portfolio is heavy in tangible assets such as oil and gas, and even hard infrastructure such as schools, but it is still light in intangibles, such as institutions for managing volatile resource earnings, providing high-quality social services, and even-handedly regulating enterprises. It was investments in intangibles that allowed economies dominated by extractive industries to become innovative and successful.

3.1 Introduction

How to make most of its natural resources is the main question for Russia, which integrated into the world economy by exporting resource-intensive products. This question is one of several on diversified development that are discussed in a recent World Bank report (2014) which seeks to contribute to the debate on what governments must do to develop their countries. It also derives lessons from success stories of other countries that integrated into the world economy with the export of resource-intensive products. Russia and several Eurasian countries are large exporters of resource-intensive products. Their growth path in the past two decades differed in that respect from other countries: Asia"s rapidly growing economies integrated with labor intensive products into the global markets. Their growth path was dominated by importing capital and know-how and exporting goods and services that require a great deal of labor. Central European economies entered the global economy by exporting capital-intensive goods and services. Their deep and comprehensive integration with the policies and institutions of the European Union led to the largest inflows of foreign capital and Western know-how in history (Figure 39).

Natural resources allowed Russia to reach high income status in less than a decade, but the global economic crisis exposed the structural weaknesses of the commodity-driven growth model. After bottoming out in 1998, the economy grew until 2008 on the back of rising commodity prices and spare capacity, leading to large productivity gains and expanding the output frontier. GDP grew by 95 percent, incomes per capita doubled in real terms, and poverty was drastically reduced. The share of the population living on US$ 5 or less a day fell from more than 35 percent in 2001 to 10 percent in 2010. But starting in 2008, Russia experienced an abrupt end to its economic boom as a sudden reversal of capital flows caused a credit crunch and a sharp contraction in demand. In 2009, Russia"s output contracted almost 8 percent. Between 2009 and 2013, economic growth averaged 1.1 percent per year, far lower than other large, emerging economies19 (5.1 percent) and other resource- rich countries20 (3.5 percent). Private investment plunged at the onset of the crisis by 9.2 percent in 2009 compared to the previous year. Today it remains low, with weak credit growth to the private sector and falling business creation. Productivity growth slowed from an average 4.1 percent in 1998-2008 to 1.6 percent in 2008-2012. This makes it likely that the recent slowdown in Russia"s economic growth is largely due to structural rather than cyclical factors, implying that the economy as it is structured is reaching the limits of its potential output.

Structural constraints to Russia"s potential output pose the key question how to increase that potential, so that the economy can sustain high growth rates. Given the observed slowdown in the Russian economy and its resource-based growth model, the problem is: How should the government diversify exports and the economy away from activities that depend on natural resources? The recent growth strategy based on direct government presence and active industrial policies to diversify the economy did not open the door to higher potential output. Also, at present, the margin for maneuver for expansionary fiscal policy appears to be small, limiting the scope for direct transfers for social objectives and direct interventions to help diversify production. Russia was left after the 2008 crisis with a large nonoil fiscal deficit of 14 percent in 2009 and 10 percent in 2013. Large fiscal buffers -Russia"s Reserve Fund and the National Welfare Fund- were created before the crisis, but dropped from 14 percent of GDP in 2008 to 8.7 percent in 2013. The challenge will be to identify better strategies to save some of the earnings from the oil and gas for future generations or use public resources to foster specific activities that are less extractive and more innovative. Only a broader approach to future growth potential can help Russia"s economy become more innovative as w ell as extractive.

This note looks at paths to diversified development that would rebalance Russia"s portfolio of national assets: natural resources, capital and economic institutions. The paper discusses the observed slowdown in Russia"s potential growth, assesses strengths and weaknesses of its current asset portfolio, and suggests priorities to unlock Russia"s growth potential. Russia"s growth path will remain entwined with its resource endowment, which has undoubtedly contributed to its previous success. But Russia is also rich in human capital: a highly educated population similar to Central Europe"s and great potential to increase its physical capital base, notably infrastructure. The paper will explore what challenges and opportunities those assets could hold for Russia. Moreover, the central issue for greater economic efficiency and a higher growth potential for Russia might be related to a more intangible asset: the quality of its institutions, which manage resource revenues, provide social services and regulate enterprises. Our main hypothesis is that investments in intangibles will make the difference between a more productive economy and a stagnating one.

3.2 Increasing Potential Output

Russia appears to have reached its potential output. Over 2000-2006, increases in Total Factor Productivity (TFP) were the dominant driver of output expansion. The main force behind TFP growth during this period was efficiency gains from the transition process, with the reallocation of excess capacity to more productive sectors of the economy. Over time, capital accumulation grew to account for a larger component of output expansion, while labor"s contribution became more limited. At the same time, TFP growth slowed as productivity gains from first generation reforms wore off (Figure 40). Although hard to estimate, it is likely that much of the slowdown in Russia"s economic growth is due to structural, rather than cyclical, factors, implying that the Russian economy may be reaching the limits of its potential output (Figure 41 and IMF 2014)…

Product markets are often dominated by incumbents. In 2001-07, the share of highly concentrated markets increased from 43 percent to 47 percent, which is high compared with most developed economies. Most markets are dominated by a few incumbent players. Price-cost margins -an empirical measure of intensity of competition- are higher in Russia than in Europe, indicating less competition. Firms in sectors with higher price-cost margins tend to be older and larger, have smaller export orientation and R&D intensity, are more likely to operate in local markets, and, in some sectors, are less likely to operate in a competitive market structure.

Uncompetitive markets are the ultimate cause of weak entrepreneurship. The diminished access to credit following the global economic crisis is associated with a sharp decline in levels of entrepreneurship. It is, however, only one of the factors shaping the incentives to establish new firms. Levels of entrepreneurship in Russia were low (and declining) even before the crisis (Figure 42). Adjusted for the size of population, entrepreneurs register twice as many companies in Malaysia and three times as many in Chile than in Russia. The ultimate reasons for low entrepreneurship in Russia lie in an unfriendly regulatory environment, with rules that are often arbitrarily enforced, and markets dominated by incumbents.

The slowdown in potential output calls into question Russia"s recent growth strategy based on direct government presence and active industrial policies to diversify the economy. Economic diversification has been a key priority for over a decade. Various tools were deployed to subsidize the non-extractive economy and jumpstart an innovation-based enterprise sector that would reverse Russia"s "de-industrialization" and almost exclusive reliance on commodity exports. State aid, with direct transfers and preferential treatment of enterprises, was extensively used to protect incumbent firms from competition. At the same time, a sustained attempt was made to create the basis for an innovation-driven knowledge economy, with massive initiatives such as the Russian Venture Company, Rosnano or Skolkovo. Whereas it may be early to evaluate the results of these policies, it is time to focus the attention of policymakers on actions that can increase the economy"s growth potential. These should aim at diversifying and strengthening the economy"s asset base.

3.3 Russia"s Current Asset Base: Abundant Natural Resources, Good Human Capital, Improving Infrastructure, But Weak Institutions

Assets can be classified into three categories: natural resources, built capital, and national institutions. Natural resources in the form of minerals, arable land, and forests are largely endowed, but technological progress and better management can radically alter their economic value. Built capital consists of both physical and human capital, in the form of adequate infrastructure and a healthy and skilled labor force. Both such assets can be measured for any country, though in the case of built capital, with more difficulty and less precision than natural resources. Finally, the most poorly measured and possibly the most important assets a country has are national institutions: the regulations and mechanisms that a country has put in place to manage resource rents, deliver public services such as roads, security, health care, and education, and regulate private enterprise.

Natural Resources

Natural capital, similarly to physical capital, is the present discounted value of the profit stream that natural resources can generate far into the future. Countries with similar initial quantities of land or subsoil assets may thus have different levels of estimated natural capital if they differ in how productively they use their land or in how effectively they exploit their subsoil assets. The period over which resources generate profit depends on whether they are renewable or exhaustible. Reserves of subsoil assets such as oil, natural gas, and minerals are typically nonrenewable and exhaustible, whereas land, forests, and rivers can potentially last forever if managed well. The Changing Wealth of Nations (World Bank 2011a) develops and applies a methodology that captures these dimensions. Each country"s estimated total natural capital is then divided by its 2005 population to estimate per capita natural capital and its major components (subsoil capital and land capital) to permit comparisons across countries, regions, and income groups.

Russia ranks 15th in the world in natural capital per capita and 13th in subsoil wealth. Russia has around 5 percent of the world"s proven oil reserves and 25 percent of its proven gas reserves. In resource-rich Australia, Canada, Norway, and New Zealand, natural capital is 8-13 percent of overall wealth. The ratio in Russia is 43 percent (Figure 43 and Figure 44). Natural capital per capita rose in Russia over 2000-10, driven by a combination of growth in the production of natural gas, the expansion in reserves, and, most importantly, higher world prices. Where Russia has done less well is in exploiting its potential for agriculture.

In addition to being resource abundant, Russia is dependent on its natural resources. As of 2012, extractives (including oil, natural gas and minerals) accounted for 17.5 percent of GDP (with oil and gas at 16.2 percent). In 2013, energy exports represented about 67 percent of total exports (54 percent oil and 13 percent gas) and oil revenues contributed to 30 percent of fiscal revenue (Figure 45 and Figure 46). This dependence may result in excessive volatility of export receipts and government revenue, adding to overall economic volatility, hurting savings, investment, and economic output, straining government finances, and increasing uncertainty for households and firms. In 2013, the non-oil fiscal deficit amounted to 10 percent of GDP with an overall deficit of 0.5 percent. The difference between the two is a good measure of the government"s dependence on oil and gas…

Physical Capital

After declining until the early 2000s, physical capital stock has begun to increase. Gross fixed capital formation has been at just over 20 percent of GDP since 2007. This is still lower than comparators, especially large emerging economies (Figure 47). Public investment has stagnated at about 3 percent of GDP since 2005. Overall, the stock of infrastructure capital is still comparatively low (Table 14).

The quality of infrastructure appears to have improved since 2007. Inadequate maintenance and repairs had led to steep drops in infrastructure quality since the end of the Soviet period. Infrastructure established in cold climates proved too expensive to maintain and was allowed to degrade. Communal infrastructure similarly suffered, as artificially low prices and heavy state subsidies led to persistent underinvestment and less-frequent maintenance. The situation has improved since 2007, as indicated by a rise in perceived infrastructure quality (Figure 48).

The penetration of information and communications technology (ICT) is at very low levels compared to high income countries and this may hamper business growth going forward. In 2012, there were only 53 internet connections and only 14 fixed broadband internet subscribers per 100 people, far less than in advanced countries (Figure 49). Given its rising role in the modern economy, low ICT penetration may become an increasing problem for doing business…

Human Capital

Human capital is a vital asset for economic growth. It is the ultimate source of innovation and productivity and one of the key mechanisms for transferring wealth across generations. Its pace of growth depends on the quantity and quality of education (in the classroom and in on-the-job training), on the quality of health care, and on the broader social environment. Education and training institutions play a key role in enhancing the productivity of capital by supplying well-trained graduates and developing innovative ideas that improve existing technologies. Workers whose skills are aligned more closely with the demands of firms are typically more productive and contribute more to the country"s economic growth. In addition, they tend to command higher wages and enjoy lower levels of unemployment. By contrast, workers whose skills are misaligned with employers" needs are likely to be unemployed, underemployed, or paid less than others.

The quality of Russia"s human capital is high. The Human Development Index (HDI), a composite statistic of life expectancy, education, and income, shows that the spectacular increase in income per capita experienced in recent years has been accompanied by improvements in health and education (Figure 50). At 9.8 years, the average years of schooling are high for Russia"s income level, a legacy of the Soviet system of universal education. Russia stands out among Eurasian countries for better education attainment -quantity of schooling- at all levels but more strikingly at the tertiary level.

Yet, there appears to be a mismatch between education achievement and employers" perceptions. The OECD PISA assessment reveals how the quality of education in Russian schools, especially in Moscow and Saint Petersburg, is high by international standards (Table 15). Business perceptions paint a different picture, with the perceived quality of education being lower than for comparators (Figure 51). On-the-job training, albeit improving, is still perceived as inadequate (Figure 52), even though it plays an important role in building human capital (Heckman, Lochner, and Taber 1998). Employee training also affects wage growth of young or highly educated employees and training employees allows them to attain and maintain the competencies required to bring productivity in line with market wages of older and low-educated workers (OECD, 2004).

Institutions: Three essential functions of government

Institutions are a fundamental asset for long-term economic development and are particularly important in resource-abundant countries. They set the rules and norms by which economies and societies operate, shaping the incentives of governments, individuals and firms. In resource-abundant economies, institutions make the difference between success and failure in the long run. Building a sound institutional framework will ensure that natural assets are exploited responsibly and productively and that governments, individuals and firms have an incentive to invest in physical and human assets.

Russia lags in most dimensions of governance. Inconsistent enforcement of laws and regulations are typical symptoms of weak governance, and Russia is behind high-income resource rich comparators in all elements of governance and transparency. The World Bank"s Worldwide Governance Indicators (WGI) indicate that rule of law, corruption, regulatory quality and accountability remain problematic, ultimately undermining the effectiveness of government policy (Table 16)-

Three government functions are essential: (i) the package of fiscal, monetary and exchange rate policies that allow managing the volatility deriving from a concentrated export basket; (ii) the capacity of the public administration to effectively deliver public services, such as health, education and infrastructure; (iii) and the ability to effectively regulate private enterprise guaranteeing a competitive environment. These are especially necessary for countries that have to manage sizable resource rents, where weaknesses in accountability and corruption can become sources of instability…

3.4 Rebalancing Russia"s Asset Portfolio with Transparent Rules, Better Public Investment and Competition

To sustain long-run growth, Russia needs to leverage its abundant assets and build up its less abundant ones. The country is well endowed with natural resources and human capital. It has begun to rebuild its physical capital. The greatest weaknesses are in the institutions for the regulation of private enterprise. Relatively low and inefficient investments in physical capital, low labor force participation and weak productivity have shown the limitations of growth driven by high commodity prices and utilization of spare capacity. Russia can return to a sustainable growth path by leveraging the assets it has and by building up those that are more deficient.

To achieve higher growth Russia needs to increase the contribution of labor and capital and remove constraints to economic efficiency. At just over 20 percent of GDP, Russia has relatively low investment. It also faces challenging demographic conditions: an aging population, low birth rates, and imminent decreases in working-age cohorts, pointing to a limited contribution of labor to future growth. The first key to future growth lies in improvements in the quality of physical and human capital. It will be equally important to remove structural constraints to total factor productivity, the efficiency with which factors of production are employed. More responsible use of natural resources, more transparent rules for investors, better planning and monitoring of public investment, and a stronger competition framework would appear to be the priorities for the next decade.

The ultimate reasons of low investment are institutional, rather than the proximate cause of limited fiscal space. Resource-rich countries require much stronger institutions and political commitment than resource-poor economies. The pervasive nature of resource rents can result in lower-than-optimal government investment and large outlays on explicit and implicit subsidies and transfers. Bhattacharyya et al. (2011) use the Hall and Jones (1999) institutions index to proxy for "social infrastructure" and find that the resource curse is experienced only by countries below a certain threshold. Improving the quality of institutions is therefore essential for Russia to escape the trap of low public capital. Overall, Russia does not have to increase spending by much: increasing gross fixed capital formation to about 25 percent of GDP, as recommended by the Growth Commission, may be enough. No more than a third of this increase needs to be public investment. The rest could be private, brought about simply by improving the investment climate.

More transparent rules for investors would enhance the contribution of natural resources to Russia"s growth. After 2004, the Russian government increased taxes and intervened more frequently in the oil industry. The growth in Russia"s oil production dropped from 7 percent in 2001-2005 to about 1.5 percent in 2006-2011. The gas industry has remained a national monopoly, probably limiting efficiency and reducing the scope for the discovery and exploitation of untapped reserves. The potential for discovering additional reserves of both oil and gas would be enhanced if more risk capital and better technology could be deployed for more intensive exploration in more difficult terrain (IEA 2011).

Better prioritization of expenditures and focus on results will strengthen the quality of public service provision. Greater attention should be paid to planning, monitoring and evaluation of public investment expenditures in education, health and infrastructure. Russia could follow the lead of advanced OECD countries and shift to performance-oriented public sectors that emphasize efficiency and accountability. This requires systems to monitor results, including enlisting private companies, academic institutions, and nongovernmental organizations to monitor indicators of public-service delivery. The role of external performance audits will also become important in ascertaining that delivery units comply with their delivery obligations, on the basis of which they receive budget financing. This approach would require systematic reviews of public spending to identify the scope for service delivery improvements and to advance institutional reforms (World Bank, 2011c).

Increased private participation could improve the quantity and quality of the delivery of public services. One option widely used at international level is to establish public-private partnerships (PPPs) as an alternative to more traditional arrangements. International experience shows that different incentives, combined with an adequate legal framework, have to be in place in order to ensure sustainability of PPPs, as well as to maximize and improve the use of resources.

Effective competition policy will increase the productivity of the business sector. Entry and exit conditions need to allow firm churning, so that more productive firms survive and prosper and obsolete ones exit. This is what allows increases in aggregate productivity. An effective competition policy framework would enforce antitrust rules for private and state-owned firms, help reduce wasteful state aid and ensure that the benefits of competition are understood and appreciated by policymakers, firms and consumers. Specific measures that would have tangible effects in Russia could include broadening the mandate of the Federal Antimonopoly Service on state aid regulation to diminish firm- and sector-specific state aid; creating an inventory of state aid; aligning state aid regulation with international best practices and eliminating preferential treatment to enterprises owned by states or municipalities (World Bank, 2013). Sector specific policies in key service industries such as transport, construction, and professional services would further increase competition and reduce prices for firms and households.

Russia Outlook: Divestment and Stagflation

Moody´s Analytics (Martin Janicko – September 17, 2014)

Russia is the world's sixth largest economy, accounting for about 3.25% of global GDP, but has lately been underperforming. GDP growth decelerated to 0.8% y/y in the second quarter, from 0.9% in the previous stanza. The economy shrank 0.5% q/q in the first quarter but avoided a technical recession, defined as two consecutive quarters of contraction. Weak fixed capital formation in machinery and construction slowed growth in the period…

Trading economics (http://www.tradingeconomics.com/russia/) November 17. 2014

Russia GDP Annual Growth Rate 1996-2014

The Gross Domestic Product (GDP) in Russia expanded 0.70 percent in the third quarter of 2014 over the same quarter of the previous year. GDP Annual Growth Rate in Russia averaged 3.63 Percent from 1996 until 2014, reaching an all-time high of 12.10 Percent in the fourth quarter of 1999 and a record low of -11.20 Percent in the second quarter of 2009. GDP Annual Growth Rate in Russia is reported by the Federal State Statistics Service.

Russia is the fifth largest economy in the world and is a leading exporter of oil and natural gas. In Russia, services are the biggest sector of the economy and account for 58 percent of GDP. Within services the most important segments are: wholesale and retail trade, repair of motor vehicles, motorcycles and personal and household goods (17 percent of total GDP); public administration, health and education (12 percent); real estate (9 percent) and transport storage and communications (7 percent). Industry contributes 40 percent to total output. Mining (11 percent of GDP), manufacturing (13 percent) and construction (4 percent) are the most important industry segments. Agriculture accounts for the remaining 2 percent. This page provides – Russia GDP Annual Growth Rate – actual values, historical data, forecast, chart, statistics, economic calendar and news. Content for – Russia GDP Annual Growth Rate – was last refreshed on Monday, November 17, 2014.

Russia GDP Growth Beats Expectations

The Russian economy advanced 0.7 percent year-on-year in the third quarter of 2014, down from a 0.8 percent expansion reported from April to June, according to the preliminary figures from the Federal Statistics Office. The number came well above market expectations and the central bank estimate of 0.2 percent.

The economy slowed for the third consecutive quarter; as sanctions imposed by the United States and European Union hit foreign investment and exports. A year earlier, the GDP expanded 1.3 percent.

Since the beginning of the year, the ruble depreciated more than 40 percent against the USD pushing inflation rate to a three-year high of 8.3 percent in October. Also, exports reached a 7-month low in September as falling oil prices cut revenues.

Meanwhile, the central bank raised the benchmark interest rate for the fourth time this year to 9.5 percent on October 31st, putting further pressure on the economy.

GDP annual growth rate Russia – Euro Area

Russia Balance of Trade 1997-2014

Russia recorded a trade surplus of 12.953 USD Million in September of 2014. Balance of Trade in Russia averaged 8.912.37 USD Million from 1997 until 2014, reaching an all-time high of 20.356 USD Million in January of 2012 and a record low of -185 USD Million in February of 1998. Balance of Trade in Russia is reported by the Central Bank of Russia.

Russia runs regular trade surpluses primarily due to high exports of commodities like crude oil and natural gas. In 2013, the biggest trade surpluses were recorded with: Netherlands, Italy, Turkey and Poland. The biggest trade deficits were recorded with: China, the United States and France. This page provides – Russia Balance of Trade – actual values, historical data, forecast, chart, statistics, economic calendar and news. Content for – Russia Balance of Trade – was last refreshed on Monday, November 17, 2014.

Russia Exports 1994-2014

Exports in Russia decreased to 38.783 USD Million in September of 2014 from 40.937 USD Million in August of 2014. Exports in Russia averaged 20.471.03 USD Million from 1994 until 2014, reaching an all-time high of 50.248 USD Million in December of 2011 and a record low of 4.100 USD Million in January of 1994. Exports in Russia are reported by the Central Bank of Russia.

Russia"s economy is highly dependent on exports of commodities with crude oil, petroleum products, and natural gas accounting for 68 percent of total shipments. In 2013, 50 percent of country's federal budget revenue came from mineral extraction taxes and customs duties on oil and natural gas. Other exports include: nickel, palladium, iron, chemicals, cars, military equipment and timber. Main export partners are: Netherlands (15 percent), Italy (8.6 percent), Germany (8.1 percent) and China (7.8 percent). This page provides – Russia Exports – actual values, historical data, forecast, chart, statistics, economic calendar and news. Content for – Russia Exports – was last refreshed on Monday, November 17, 2014.

Russia Imports 1994-2014

Imports in Russia increased to 25.830 USD Million in September of 2014 from 25.089 USD Million in August of 2014. Imports in Russia averaged 12.613.86 USD Million from 1994 until 2014, reaching an all-time high of 32.486 USD Million in December of 2013 and a record low of 2.691 USD Million in January of 1999. Imports in Russia are reported by the Central Bank of Russia.

Russia main imports are: food (13 percent of total imports) and ground transports (12 percent). Others include: pharmaceuticals, textile and footwear, plastics and optical instruments. Main import partners are: China (19 percent of total imports), Germany (13 percent), the United States (6 percent) and Italy (5 percent). This page provides – Russia Imports – actual values, historical data, forecast, chart, statistics, economic calendar and news. Content for – Russia Imports – was last refreshed on Monday, November 17, 2014.

Russia Exports to European Union 2006-2014

Exports to European Union in Russia increased to 136.792.20 USD MIL in June of 2014 from 115.086.40 USD MIL in May of 2014. Exports to European Union in Russia averaged 118.025.11 USD MIL from 2006 until 2014, reaching an all-time high of 283.188.90 USD MIL in December of 2013 and a record low of 9.928.50 USD MIL in January of 2009. Exports to European Union in Russia are reported by the Federal Customs Service, Russia.

Russia accounts for Exports to European Union using cumulative values for each year (CMLV). This page includes a chart with historical data for Russia Exports to European Union. Content for – Russia Exports to European Union – was last refreshed on Monday, November 17, 2014.

Russia Imports of Total (USD) 1994-2014

Imports of Total (USD) in Russia increased to 80.402 USD Million in the second quarter of 2014 from 72.444 USD Million in the first quarter of 2014. Imports of Total (USD) in Russia averaged 37.344.61 USD Million from 1994 until 2014, reaching an all-time high of 94.600 USD Million in the fourth quarter of 2012 and a record low of 9.111 USD Million in the first quarter of 1999. Imports of Total (USD) in Russia are reported by the Central Bank of The Russian Federation.

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Russia | Economic Indicators

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Autor:

Ricardo Lomoro