Saturday, March 5, 2016

Natalia Zubarevich: “The most hellish risk to Russia – degraded” – BBC Russian

Image copyright Egor Gaidar Foundation
Image caption The old model of economic growth in Russia has ceased to work as early as 2013, says Natalia Zubarevich

Russian regions accumulating fiscal imbalances and continue deeper to link the crisis. Where the lower point of the peak – is unclear. But it is also clear that a broad social performances this trajectory fall is unlikely, the director of the regional program of the Independent Institute of Social Policy Natalya Zubarevich

The main risk for Russia -. To continue the movement towards “downward adaptation of the population” which leads to degradation within existing economic model. This opinion is expressed in the course of lectures “Depression in the regional dimension,” Read it on Thursday at the Sakharov Center.

One of the organizers of the event was made by the Foundation of Yegor Gaidar.

According to Natalia Zubarevich a crisis that is going through Russia, began in 2013, when it stops functioning “machine” old growth. The model that emerged in the 2000s, has stopped.

BBC Russian Service has decided to publish a summary of the lecture, from which it becomes clear how different regions to adapt to internal and external economic shocks.



The three dimensions of the current crisis Which came first? We grew up in oil prices, the economy getting more money. At the same time, to put it mildly, did not improve the institutions, Business Development barriers became more. But as long as the oil price rose, the system balance. As soon as oil prices rose, even though at 110 dollars per barrel, – everything, the economy stalled

We are stalled in December 2013 -. Already that year was zero for industry, revenues grew just barely. It all started with the stagnation and negative we have gone already when added external factors. Crimea, sanctions and antisanktsii that are most affected by the growth of inflation

A new crisis – the slow, we still could not to find new growth drivers. At the national scale crisis unfolding on three levels. The first to suffer the regional budgets: for three years they are unbalanced and have a very strong debt stress. This imbalance began in December 2012, when the first time the regions had to account for the increase in public sector salaries (in accordance with the May decrees of Vladimir Putin)

Secondly, we are seeing investment crisis:. There is a significant reduction in direct investment.

third, the crisis has had an effect on income and consumption. Finally, in regard to industry, the real sector, the current crisis is not quite the same as before: we are accustomed to the crisis – a factory arose, lockout [businesses closing and mass layoffs] strike. The current crisis is not so -. It is more hidden

Image copyright Getty
Image caption Russia is moving trajectory “downward adjustment”, says Natalia Zubarevich

” Check for patriotism “

the most offensive, that the crisis is quite hit those regions, where there were already modernized industry – primarily in our automotive industry, especially the assembly. Branches where good management and output good product – they lay

.

The total debt of the regions and municipalities 2.66 trillion rubles – about 3% of GDP

Natalia Zubarevich

The downturn in the automotive industry was 30%, but even worse situation with the production of cars – minus 60%. It crashed around cars production. Evil tongues say, they say, now look at the “Uralvagonzavod” in Nizhny Tagil. It is known that there tanks produced from 20% strength, and the rest – the wagons. Now there it is very difficult: they have a big test of patriotism. Following the automobile industry and the cars go poludepressivnye regions: Kostroma, Kurgan, Pskov, Amur region. Every crisis, they subside, and then almost “squeezed”.

Well, who is this crisis is not particularly feel in terms of the real economy? This group of three regions: the first group – modern, new Neftegaz (Sakhalin, Yakutia, the oil industry of the Krasnoyarsk Territory, Nenets Autonomous District). The second group – our agricultural regions of the South and Central Black Earth region. The third group – areas of military-industrial complex. They grow fastest: 7-11%

If we compare the levels of subsidized regions in 2014 and 2015, they have not changed much.. However, in 2014, federal transfers were generally higher. The crisis is running out, after all. But do not think that where higher dependence on subsidies, there are risks and more. For example, we see that the high share of transfers from the federal budget in the consolidated budget of the Chechen Republic. But are you sure that Chechnya should be afraid of? I’m not very sure.



Regions honest and artful regions

Who do we have with us today in the black? This, for example, Moscow, Tyumen region. Leningrad region is, in my view, civilized fiscal policy. At the same time, there are regions that are poor, but live within our means, taking care not to accumulate deficits. In 2015, a poor and honest was the Vladimir region, she ended the year with a surplus. . There’s a responsible fiscal policy

The total debt of the regions and municipalities 2.66 trillion rubles – about 3% of GDP. At the same time, there are regions that are brilliantly able to receive federal transfers. In this sense, one of the great places – the republic of Mordovia. She is now a record: the debt is 165% of its income. And not afraid of anything! A deficiency of this year – 24%. That is, they spent 24% more than earned, and feel good

Give Mordovia budget loan, and she -. Artful such – does not try to use it to replace expensive commercial loans, and continues to spend more . In our political conditions, and this is possible. For this picture I read lobbying capabilities not only regional authorities, but also interest groups, such as associated with the regional authorities.



Airbags for the labor market

If you look at the dynamics of unemployment in the Russian regions is quite small, a slight increase in 2015 occurred, but it was not of a catastrophic nature. Why? We constantly say: here someone was fired, there is someone to cut. The answer is simple. Layoffs in Russia is going extremely slow doses, because there are other tools and factors affecting the labor market.



We are always included in crises through a part-time job. This is our main way of mitigating the crisis risks

Natalia Zubarevich

The main factor – is underemployment. This is absolutely legal, authorized by law form. Part time work, downtime, leave the parties’ agreement. You are working part-time – and get a part of the salary. And this, incidentally, is the norm for Russia. We always were in crises through a part-time job. This is our main way of mitigating the crisis risks for all, it is the consensus

We are accustomed to thinking that we are a country where consensus is not possible: two men – three opinions.. And in labor matters we have a consensus. Well all business – because they do not care, to dismiss or reduce the salary. The State is good – because people are not fired, no protests. People also relatively normal – of course, salary is less, but it’s not fired me, the degree of uncertainty has not increased, and the next day everything will be fine! We tolerate, we’ll wait.



Image copyright AFP
Image caption Russians to the last saved from the crisis in the individual or the “few-group” survival strategies – and oppose the authorities consider it inappropriate, says Natalia Zubarevich

And in general, taking into account our current demographics, we were wildly lucky. Now in the labor market there is a generation of the 1990s. It is a third less than the previous one. And leaves the largest generation – the 1950s. If we grow and develop, it would have to shed crocodile tears. And so – all right



. we have a huge informal sector, which involved 20% of the population of working age – it is now about 20 million people

Natalia Zubarevich

In order to somehow soften the problem of disposal of the working-age population, we need immigration is not less than 600 thousand people a year (we now have more than 200 thousand people per year). In this scenario, by 2025 we have reduced the number of working-age population of 8 million. When bad scenario reduction will be 12 million people. This is the official script of Rosstat. When we begin to shake oneself and exit [from the crisis], we will have big problems. Who we will work?

Finally, when we talk about what is a safety cushion for our labor market during the crisis, we must also remember that a kind of damper, as a huge informal sector, where 20% of the population involved working age – it is now about 20 million people. They officially are somewhere in number and at the same time to do the statistics Rosstat – in fact according to the ILO methodology (International Labour Organization), a busy man is a person who works at least two hours a week during the last month

On the downward path strategy

as the crisis for us? We will be a slow, viscous crisis without massive layoffs. Will fall further regions with uncompetitive economies, sluggish industry will adapt.

For the first time we have the simultaneous contraction in market services and in budget. And a year ago, I thought that this is why the crisis is particularly harming the residents of large cities, because there is a particularly large share of the services economy. But you know, I was wrong.



I [foreign] journalists ask you everything falls, why not protest? The answer: by Kocani

Natalia Zubarevich

I completely underestimated the ability of educated enough to earn good population of big cities to the downward survival strategies. We are so ready to roll down the hills, even with a good education! If you understand that out is not possible for you, you begin to look for a way in – and it always comes down to the bear strategy

When I go to some countries, I have local journalists ask you all down. why not protest? Answer: Kocani on! Because there is a linear relationship between the economy and the socio-cultural dynamics of the perception of people. Because the business people – to adapt to any changes. These people choose to adapt, either individually or few-group strategy – to survive with the help of friends and relatives

A butt with this state -. Our own peril. The risks of collective action in Russia is enormous, the result is absolutely not guaranteed, and the opportunities to get out of the situation through individual strategies is always there. Our experience has taught us that life.

And now the whole country is silently moving in a downward adjustment mode. And as you can imagine, this leads to degradation. And for me now is the hell of a risk – degradation

.

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