Izvestia: “Putin asked to replace the locomotive”
Modernisation and innovation are not enough to save the Russian economy. Analysts from Business Russia are confident that facilitating development requires a new industrialisation. They have written their strategy in the mountains of the Caucasus, which they will submit to Vladimir Putin's Popular Front. The main objective is to create 25 million jobs.
Innovation and modernisation are great, but they cannot become an engine for the economy. Industrial production needs to be expanded. This is the main idea being offered to the Russian Popular Front.
"If they think that their flying saucer will replace the entire Russian steam engine that is standing on the tracks, then this is ridiculous. You don't need a flying saucer to do that," said Mikhail Dmitriev, President of the Centre for Strategic Research.
The new engine should be industrialisation, namely the creation of new production facilities by the business community, not the state. The state's role should be reduced. The state should leave business and sell its stakes in key companies, Business Russia Chairman Boris Titov told Izvestia. It was Titov who invited analysts to his sparkling wine plant Abrau-Durso, so that they could come up with a new idea for a national development strategy against the quiet backdrop of the Caucasus mountains. And think up an idea they did.
It turns out that most developed nations have failed to make innovation the driving force of their economies. Modernisation should not be renounced, but it cannot rectify the situation by itself.
"Two years ago, when ideas of modernising Russia were forming, it was thought that this would provide for the main economic growth," Mikhail Dmitriev told the paper. "But this view of modernisation leads to a dead end. Even in developed countries such as the United States, economic sectors linked with innovation and state-of-the-art technology account for no more than 10-15% of jobs." Countries like India with the most rapid economic growth are developing not through innovation, the analyst said, but through industrial expansion and urbanisation. In developed countries, the manufacturing industry accounts for up to a third of the economy.
Russia has returned to the pre-industrial era, and its share of the manufacturing industry has been cut in half.
"The famous Bangalore in India accounts for just 1% of the national GDP, and for 0.7% of jobs nationwide. We should not expect the Russian situation to be better," Dmitriev said.
We need to do something soon, however, because the potential for oil-related growth has been completely exhausted, analysts say. They offer their own document, with the working title, "The 25X25 Strategy," which Izvestia has obtained. This strategy, most likely under a different name, will be offered to the Russian Popular Front as an ideological platform. The document's authors are confident that they will accept it because, according to Dmitriev, there is a shortage of effective ideas right now.
The essence of the document is a call for the creation of 25 million new, modern jobs by 2025. But the state will have to create the most favourable business environment in order to accomplish this. For instance, businesses must have the right to freely dismiss their employees in order to boost labour productivity. Businesses complain about a lack of workers because everyone is employed at unprofitable and ineffective state-backed production facilities. The public sector, the army and the state machinery should be cut in half, and the police force reduced three-fold. Immigration barriers should be lifted, and social mobility expanded. Most important are demonopolisation and sharply reduced state participation as a regulator and as a shareholder in the economy. This goes for the defence industry as well. The document's authors refer to the state's role by the term, "presumption of non-regulation."
Many aspects of the strategy, including the crackdown on corruption and monopolies, are not matters of contention. But many of the measures are known to be unpopular. The Front, which incorporated trade unions from the very beginning, is not likely to accept the possibility of mass layoffs. Voters will not understand this either. Consequently, business people's confidence that Vladimir Putin will like their idea is a matter of some doubt. On the other hand, the business community is actively involved in establishing a united Front. This in itself speaks to the success of the prime minister's idea.
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COMMENTS
Lev Yakobson, Deputy Rector at the Higher School of Economics:
"The creation of 25 million jobs is relevant in the context of Business Russia's ideas. They have in mind not simply jobs, but highly productive jobs. This is very important. It is common knowledge that Russia faces workforce shortages. But what sort of shortages? We need truly skilled specialists who work with their hands and use modern equipment, not just office workers. The national labour market is plagued by structural imbalance: more and more lawyers are working at local stores, while at the same time there are not enough truly skilled workers. Their initial training is a separate, complicated issue. It turns out that for this category of workers, there is a lack of normal jobs. On the one hand, this implies personnel training, while on the other hand, this means they must be provided with jobs. Otherwise we will not be able to ensure real economic growth. Business Russia's proposals are important, because they address not just the quantity of jobs, but the quality of jobs as well."
Iosif Diskin, Co-Chairman of the National Strategy Council:
"Do we have 25 million jobless people? In my view, this is a misguided and populist approach to the issue. The main thing is enhanced effectiveness and competitiveness of the country's economy. If we create 25 million jobs, they will be underpaid and ineffective. We must approach the issue differently; we need to expand value-added sectors. This means high-paying jobs for skilled workers, not simply jobs. The social sectors and those connected with ensuring quality of life lack high-paying jobs. In most industrial sectors, we need to reduce the number of jobs -- if we are really talking about new technology."
Andrei Reut
