Russian Prime Minister Dmitry Medvedev. Source: Reuters
In discussing the current and future challenges of global development, the term "the new normal" began to increasingly be used. It emerged five years ago, after the acute phase of the global crisis, and quickly gained popularity. "The new normal," perhaps, could be explained as a "new reality.”
It means key characteristics that will shape the global economy over the coming period – in fact, until the next major, structural crisis.
It is becoming increasingly clear that the leading countries of the world are beginning a new trajectory of growth. The question is not only in the new pace, but also in the quality of this growth – in the emergence of new sectors of production, in the new geography of their location. The update affects all spheres of society – technology, economy and the humanitarian sphere.
Despite the current critical nature of the relationship [with the West], the restoration of cooperation is still inevitable.
Russia is not going to leave the European continent either economically or politically or mentally. <...> The relationship may change in the future, but strategic direction will be inevitable – cooperation, partnership and, in the case of favorable developments, the formation of a single economic space.
The geographical and geopolitical position of Russia not only allows, but also, in a sense, requires us to further the active development of cooperation with the east. It is about both countries such as China, Vietnam, Japan, Korea and the Asia-Pacific region on the whole, and the SCO (Shanghai Cooperation Organization) and BRICS (Brazil, Russia, India, China and South Africa) member countries, located in various parts of the world.
The key task now is to ensure not only the pace, but a new quality of economic growth.
The creation of a comfortable environment starts with macroeconomic stability. Low inflation and a balanced budget remain a priority for the country's sustainable development.
It is necessary to create modern mechanisms for financing economic growth and modernization. Undoubtedly, public investment should play a role here. Especially now, when it allows to compensate, to a certain degree, for the low activity of private investors.
But public investment cannot be the main source of growth for all time. The state also cannot turn the printing press into such a source: The freedom of the uncontrolled emission of money is one of the most dangerous freedoms. References to the Western experience of stimulating growth through money stimulation are untenable. The attraction of private investors should come to the fore in the activities of government at all levels.
The most important source of investment should be domestic savings. This is a strategic challenge for the years to come, but we should move toward this goal.
We shall consider the question of efficient use of pension savings also in this context. The pension and then insurance system are the main sources of the formation of "long money" in the economy.
Despite the geopolitical complexity, sanctions and various constraints, we should not forget about the problem of attracting foreign investment. Underestimating them would mean that we accept the logic of isolation that is being imposed on us.
… The development of small and medium-sized businesses as a condition for sustainable economic growth and at the same time as a factor of social stability.
The stimulation of competition. One of the main reasons for weak competition is concerns for social stability in enterprises and the regions. Therefore, the development of a modern labor market is becoming both a social and economic problem. A pro-forma approach to its solution will prevent the accelerated creation of high-performance workstations.
The stimulation of the growth of non-oil exports (in absolute numbers and as a proportion of total exports). Among other things, this would be an indication that import substitution has actually started to work and begun to yield positive results.
Qualitative changes in the efficiency of public administration. It is necessary to establish a system of responsibility of different authority levels and bodies for their decisions.
The full version of the article is published in the magazine Voprosy Ekonomiki, No. 10, 2015
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