Report «On the state of competitiveness of the Russian economy in 2020 and its impact on the development of domestic industry»

Dear Colleagues!

As you know, the Association "StekloSouz" of Russia is a member of the Chamber of Commerce and Industry of the Russian Federation (hereinafter referred to as the RF CCI) and is a permanent member of the RF CCI Council for Industrial Development and Competitiveness of the Russian Economy.

The planned work of the RF CCI Council for Industrial Development and Competitiveness of the Russian Economy is based on the decisions of the annual Moscow Economic Forum. Delegates from the Russian glass industry systematically work at this authoritative economic event.

We inform you that on June 4, 2021, the Chamber of Commerce and Industry of the Russian Federation hosted the presentation of the annual analytical report "On the state of the competitiveness of the Russian economy in 2020 and its impact on the development of domestic industry", which was presented by Konstantin Babkin, Chairman of the Council of the Chamber of Commerce and Industry of the Russian Federation for industrial development and competitiveness of the Russian economy.

The participants discussed the existing economic policy of Russia, analysis of changes in key economic indicators and their impact on the state and opportunities for the development of industry and agriculture, and also proposed recipes for the development of the economy.

Speakers during the meeting: Vice-President of the RF CCI Dmitry Kurochkin, Chairman of the RF CCI Council for Industrial Development and Competitiveness of the Russian Economy Konstantin Babkin, Head of the Department of Economic Theory and Policy of the Russian Academy of National Economy and Public Administration under the President of Russia, Academician of the Russian Academy of Sciences Abel Aganbegyan, President Institute for National Strategy Mikhail Remizov, Director General of the Institute for Energy Problems Bulat Nigmatulin, Chairman of the RF CCI Council for Financial, Industrial and Investment Policy Vladimir Gamza, entrepreneur, founder of the Teremok company Mikhail Goncharov, Deputy Minister of Industry and Energy of the Rostov Region - Head of Industry Department " Andrey Atamantsev, First Deputy Chairman of the State Duma Committee on State Construction and Legislation Mikhail Emelyanov, permanent member of the Stolypin Club Vladislav Zhukovsky, Vice President of the Chamber of Commerce and Industry of the Yaroslavl Region and Alexander Fedorov et al.

Opening the meeting, Vice President of the RF CCI Dmitry Kurochkin said that the analysis presented in the Council's report is of particular interest, given the unprecedented events of the past year. The speaker considers the indicators of investment activity to be the key factor of the research. In 2020, investment fell to a record high.

Then Konstantin Babkin, Chairman of the RF CCI Council for Industrial Development and Competitiveness of the Russian Economy, spoke and presented a final report on the state of competitiveness of the Russian economy in 2020 and its impact on the development of domestic industry.

According to the speaker, 2020 was a difficult year for manufacturing enterprises, but at the same time, some industries were able to avoid a drop in production, and in some areas it was possible to increase the volume of production.

The Chairman of the Council noted the positive changes in the competitiveness of the Russian economy in 2020: a decrease in the key rate of the Bank of Russia, an increase in basic production costs at a level below official inflation; growth of state support for manufacturing industries; quotas for state purchases of industrial products; reduction in the number of inspections of enterprises.

But there were also negative factors: further monopolization of the banking sector; sterilization of oil revenues in the National Welfare Fund; growth in tax rates and tariffs; an increase in consumer tax collection; increase in the cost of metal; inconsistent customs and tariff policy; no localization requirements in regional subsidies; excessive amount of reporting documents. All of these factors hinder the development of Russian enterprises, make domestic production unprofitable and uncompetitive.

According to the report, an egregious situation has developed in the metal market: “Russian metal in Europe is cheaper than in Russia. The average increase in the cost of metal for the period from June 2020 to May 2021 amounted to 56-87%, which caused an increase in the cost of Russian equipment. " The lack of restraining measures against the rise in metal prices negatively affected the purchasing power of consumers.

According to Konstantin Babkin, state support for industry in 2020 compared to 2019 increased by 31%, but at the same time, from each ruble of manufactured products, about 52% goes in the form of taxes to the budget, and the state subsidizes several times less (less than 1%). to industrial enterprises. This policy is insufficient for normal economic growth in our country.

The policy of the Central Bank of the Russian Federation in relation to credit institutions remains unfavorable: “As soon as economic growth begins in Russia, the Central Bank of the Russian Federation begins to restrain it by raising the key rate. The old policy of monopolizing the banking sector continues. The number of banks in the Russian Federation has decreased by 62% since 2011. In 2020, 36 banks were destroyed in Russia, ”the speaker noted with regret.

The Chairman of the Council also touched upon the topic of the lack of qualified personnel: "The education system is cut off from the real sector, enterprises of the domestic industry are experiencing a shortage of specialists in all areas."

The speaker noted that the 10-year result of the current economic policy cannot please: the dynamics of the net capital outflow from the country has increased by 119% since 2019 (in 2020 - $ 48.4 billion against 22.1 billion in 2019). In 2020, the National Welfare Fund grew by 74% and amounted to 13.5 trillion rubles: “In fact, the policy of“ sterilizing excess money supply ”continues. As a result of such actions, funds do not work for the growth of the Russian economy.

Summing up the analytical report, the Chairman of the Council noted that “The paradigm in which our Government of the Russian Federation works is at odds with the interests of the manufacturing industry. The Russian government does not set realistic goals for the development of industrial production. ”The policy is aimed at stabilizing the country's economy (fighting inflation, capital outflow, sterilization of money in the National Welfare Fund), but there is not enough action for a satisfactory growth in industrial production.

Konstantin Babkin is confident that a reasonable monetary policy is needed to change the situation, namely: affordable loans, low taxes and protectionism. Only a combination of protectionism and soft monetary policy will create stimulating conditions for the development of domestic production.

Vladimir Gamza, Chairman of the RF CCI Council for Financial, Industrial and Investment Policy, spoke about the depressing state of production in the regions. In addition to the report of the Council of the Chamber of Commerce and Industry, he touched upon the topic of providing finance for the manufacturing industry and the role of the financial market. According to the speaker, the financial market in Russia is growing twice as fast as the economy. The money supply of the Russian financial market is 130 trillion rubles. At the same time, our economy is growing at a lagging pace. The main problems from the point of view of financial policy are the lack of an effective mechanism for the transmission of savings into investments and the absence of investment banks.

In addition, economic growth is hindered by a high level of government withdrawals, in Russia it is 40%. For example, in China - 21%. “Feel the difference in the possibilities of our and the Chinese economy ...”, concluded Vladimir Gamza.

The tight monetary policy followed by the Central Bank of Russia is also not conducive to development. “The Central Bank decided that the most important thing is to fight inflation at the expense of a high rate. But this is the main mistake! Investments serve as the basis for economic growth, ”summed up the speaker.

Academician of the Russian Academy of Sciences Abel Aganbegyan compared the indicators of the economy as a whole and the results of social policy.

The 2020 crisis from the coronavirus pandemic posed a dilemma for the state - either to support the economy and finances, or to save the lives and well-being of people.

According to the expert, Russia gave priority to supporting the economy and finance with accumulation and ineffective sustainability and sacrificed the welfare and safety of the people (human health, life expectancy, population), capital, housing commissioning and development of foreign trade).

According to the announced indicators, Russia is among the top 20 powers in the world among the top three countries with the best indicators after the coronavirus crisis. For example, the gross domestic product fell slightly, in 2020 by 3%.

“But the economy is not limited to the production of goods and the provision of services. In the economy, indicators of well-being, real incomes, wages, pensions, and consumption of the population are of great importance. These indicators have decreased a little more, ”concluded Abel Aganbegyan.

According to the speaker, the worst indicator of a pandemic and the greatest damage to the economy from a pandemic is an increase in the death rate of the population.

President of the Institute for National Strategy Mikhail Remizov spoke about the systemic problems of import substitution and diversification on the example of the defense industry, the aircraft industry and power engineering. “The industry lacks a clear goal-setting on the part of the state,” the speaker noted.

The data on the level of economic development were presented by the Director General of the Institute of Energy Problems Bulat Nigmatulin. The main beneficiary of even small growth in the Russian economy is a narrow group of the country's super-rich population. The Russian economy is practically not developing, and the number of dollar billionaires is constantly growing.

Entrepreneur, founder of the Teremok company, Mikhail Goncharov, spoke about the problems of lending to the restaurant business and a sharp increase in the number of inspections of small and medium-sized businesses.

According to Mikhail Goncharov, "Over the past 2 years, Teremok has had more inspections than over the past 20 years." The courts are fining the company 200,000 rubles for the guests not wearing gloves.

The owner of the pancake chain is outraged by the fact that the foreign chain Burger King is counting on government support and loans. “Now banks lend to businesses with collateral, even if they are unprofitable. And a profitable one, but banks do not see it without collateral. If we want the development of the country and business, this approach needs to be urgently changed. "

First Deputy Chairman of the State Duma Committee on State Construction and Legislation Mikhail Emelyanov noted that the main obstacle to economic recovery is the Central Bank of the Russian Federation. "The government of the Russian Federation is a technical body that operates in the political paradigm set by the Central Bank of the Russian Federation."

Ruslan Shein, Head of the Investment Policy and Macroeconomic Forecasting Department of the Ministry of Industry and Trade of Russia, spoke about anti-crisis support measures in the pandemic year. In his opinion, thanks to them, it was possible to ensure a small, but still growth of the manufacturing industry.

The report of the Council of the Chamber of Commerce and Industry of the Russian Federation for Industrial Development and Competitiveness of the Russian Economy summed up the following factors: taxation, monetary policy, pension reform, wages, social and economic situation in the country, the cost of energy resources and cargo transportation, risks in doing business, etc. ...

The participants in the meeting agreed that the report should be supplemented with proposals from regional CCIs of the Russian Federation and the final study should be sent to the Government of the Russian Federation with proposals to improve the business environment for Russian entrepreneurs.

Application:

1). Report (open) ;

2). Changes in the competitiveness of the Russian economy_2020 (open) .