Prime Minister completes Concept 2010 and launches Concept 2020
Prime Minister Vladimir Putin has fulfilled the tasks set under the concept of social and economic development through 2010, as he told the Government meeting at Novo-Ogaryovo on Friday. Therefore, he said, "the need has arisen to look further ahead, to look 10 years ahead to the period from 2010 to 2020."
PUTIN'S PLANS AND THE PEOPLE'S PLANS
Plan 2010 was known as German Gref's strategy. This first long-term concept with elements of planning in post-Soviet Russia was developed in 2000, at the Strategic Developments Centre and the Ministry of Economic Development and Trade. The drafters said it was a liberal document that included dozens of reforms in practically all spheres of economic regulation over ten years. As a result of these plans, the Russian economy was to become fully competitive by 2010. Strategy 2010 singled out the need to reform the court system, to pass anti-monopoly legislation, and reform the tax system and natural monopolies. It is important to note that, in the course of work on Gref's strategy, the Government promptly introduced a flat (13%) income tax rate.
It is unclear why Putin has declared that Strategy 2010 for the most part been fulfilled when, in fact, with the exception of the power industry reform and the reorganisation of railways, not one of the tasks has been accomplished. The attempt to reform the judiciary branch has been a dismal failure prompting President Dmitry Medvedev to make reform of the law enforcement system his top priority. The battle for tax cuts, especially the VAT, is still not finished. Finally, instead of reforming Gazprom (concept 2010 did not envisage the splitting of the gas company, while transportation and production assets were to be separated financially), that state monopoly kept being strengthened.
By the way, Gref's strategy was never officially approved. It was discussed by the Government in summer 2000 but was sent back for reworking and has since been in limbo.
PUTIN'S MODEL OF SOCIAL INNOVATION
However, it is not uncommon in Russia to declare failures to be successes (in the 1930s not a single five-year plan was fulfilled, but official announcements claimed they were fulfilled ahead of schedule), and then to set new targets along with trying to meet previous ones. The aim of Concept 2020 (for the first draft of the concept, see Gazeta of June 4, 2007) is ambitious: Putin wants to turn Russia into a country with an innovative and socially oriented economy. Concept 2020 says that Russia's GDP, according to purchasing power parity, would be the fifth largest in the world and the first in Europe (it is currently the eighth largest). In five or six strategic sectors (nuclear and other energy, aerospace, ship-building, information technologies and education) as well as in nanotechnology, Russia should become a leader controlling at least 10% of the corresponding world markets. Labour productivity in key areas is to increase by three or four times (by 2.4 times across the economy). Average life expectancy is to grow to 75 years. Finally, the middle class should not only grow numerically by 2020, but has been promised an average wage of $30,000 a year ($50,000 in 2030). True, the Government has yet to give a precise definition of the middle class. The Minister of Economic Development, Elvira Nabiullina, says several parameters are important in defining the concept: income, comfort and accessibility of social services (education and healthcare), and the standard of professional education. But all definitions aside, $30,000 a year by 2020 is humiliatingly small (even assuming the current price system).
Thus, perhaps the targets are not all that ambitious, after all. It is not very clear how nanotechnologies and other yet-to-be-introduced innovations will come about and bring Russia to a stage when it will be a comfortable place to live, and where everyone will be able to fulfil his or her potential, according to Ms Nabiullina. Having said that, the final draft of Putin's plan will only be adopted after it is reconciled with Alexei Kudrin's financial plan in late September, so there is still time to make these documents more realistic.
A HEFTY PACKAGE
Concept 2020 is not one document, but a package of documents comprising the concept proper, the long-term forecast until 2030, sectoral strategies (typically to the year 2030), the implementation plan to the year 2020 and the guidelines for the Government's actions until 2012, a kind of "road map", according to Andrei Belousov, director of the Government's Economics and Finance Department. The key agency responsible for making these plans is the Ministry of Economic Development. Sectoral strategies, all of which are far from being finished, are being written in other agencies. Besides this, the Finance Ministry has prepared a long-term financial plan until 2023, a kind of 15-year budget to be coordinated for every budget year and with the 2020 concept overall.
Konstantin Smirnov