Possible Russian Development Paths

Possible Russian Development Paths An Analysis of Recent Trends in Policy and Performance and Some Back-of-the-Envelope Musings about the Future : 

Possible Russian Development Paths An Analysis of Recent Trends in Policy and Performance and Some Back-of-the-Envelope Musings about the Future Christian Gianella andamp; William Tompson Economics Department Organisation for Economic Cooperation andamp; Development Global convergence scenarios: structural and policy issues OECD, Paris, 16 January 2006 Salle des Nations, Tour Europe, La Defense

The usual disclaimer…: 

The usual disclaimer… The views expressed in this presentation are those of the authors and do not necessarily reflect the position of the OECD or its member states.

Contributions to GDP growth (not adjusted for capacity utilisation rates): 

Contributions to GDP growth (not adjusted for capacity utilisation rates)

Natural resource sectors (mainly oil) have been driving the growth of output….: 

Natural resource sectors (mainly oil) have been driving the growth of output….

Non fuel TB and exchange rate : 

Non fuel TB and exchange rate

Cumulative variation of the trade balance and factors’ contributions: 

Cumulative variation of the trade balance and factors’ contributions

Russia’s population is expected to continue shrinking rapidly to 2050…: 

Russia’s population is expected to continue shrinking rapidly to 2050…

…as the overall population grows older.: 

…as the overall population grows older.

The labour force is therefore set to shrink markedly.: 

The labour force is therefore set to shrink markedly.

Investment still contributes too little to growth. : 

Investment still contributes too little to growth.

Saving -investment balance (in % GDP): 

Saving -investment balance (in % GDP)

A longer-term shift in economic policy may be unfolding.: 

A longer-term shift in economic policy may be unfolding. The authorities are well aware that investment levels are too low. The question is: how to boost them? A two-track strategy is possible: Of course, it would be foolish to bank on consistency. . .

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A few observations on Russia’s choices: 

A few observations on Russia’s choices Institutionally, Russia is not very well equipped for any of the more demanding options. The survey results are worrying, not least because they suggest deterioration in some of the areas in which Russia most needs to make progress. Many areas will require substantial improvement regardless of the strategic direction Russia takes. This implies that a very large part of the structural reform agenda should be relatively non-controversial. So why have we seen so little progress since 2003?