Global economic crisis and its impact on Russian economy
Dmitry Scherbenko iff 2-3
CONTENTS
Introduction. 3
Chapter 1. World crisis: the essence and substance. 5
1.1 The essence of economic crisis. 5
1.2 Reasons of crisis appearing. 6
Chapter 2. World crisis and its impact on economy of Russia. 15
2.1 The main stages of the world crisis of 2008 — 2009 years.15
2.2 ImpactonRussianeconomy. 17
2.3 Methodsofworldcrisisdischarge. 23
Conclusion. 26
References. 27
Introduction
Economical crisisses are an integral part of world economy developing. They have an important impact on economical, political and social spheres of our life. Economical crisisses in some sense represent the points of bifurcation, when are defined potential directions of civilization developing (as a rule to many decades in advance).
Not without reason when characterizing the duration of economical crisis a great number of scientists talks about “faith in the nearest changes” and about “crossing of events”, that underlines a plurality and alternativity of further development ways.
Research of world economical crisis is very important, it gives us more detailed picture of understanding the processes including spatial, taking place in the world economy during evolution process.
The goal of research is to analyze the specific of a world financial crisis, its chanels and their impact to financial sphere of Russia and methods of reaction of governmental financial policy to results of crisis.
Regarding to this goal there are following tasks:
1. To understand the essence of a global world crisis.
2. To view the main positions of science schools explaining the appearing of economic crisisses.
3. To analyze the impact of world financial crisis to a financial sphere in Russia.
4. To view methods of reaction needed by governmental finance policy to results of crisis.
Therefore in the first chapter there will be viewed some theoretical aspects of economical crisis.
In the second chapter there will be shown an impact of a world crisis to Russian economy. Moreover, there will be discussed the main methods of reaction of discharge the crisis effects.
In the conclusion there are drawn the main conclusions obtained as a result of the current work.
The methodic is based on using of dialectical logic and system approach. During the process of research there were applied scientific methods and practices: analyze from common to a particular (deduction) and synthesis, comparisons and groupings.
To analyze the newest domestic works out in researched area, one of the most resources are magazines “World economy and international relations”, “Economical questions”, “Russiand economical magazine”, “Expert”, “Money and credit”, bulletin of foreign commercial information(BIKI). There were used also international periodic like "The Economist", "Financial Times", "The Wall Street Journal Europe".
During the research the author tried to use works of Russian and foreign researchers of integration problems in the sphere of world economy and world finances. Works of scientists devoted to working out mentioned above problems helped to give more exact explanations while scientific analyze and researches in this area.
Chapter 1. World crisis: the essence and substance
1.1 The essence of economic crisis
There is no common understanding of crisisses of social and economical system development in a modern literature. During a long period this conception was more ideological, but not real factor of working of the economical policy of producing development.
The term «anti-crisis management» appeared not long ago. It is believed that the reason of its appearing is reforming of Russian economy and gradual entering of Russia to critical developing zone. Today many experts understand that to draw the economy from crisis is not only the new type of management is the anti-crisis management. There is below an order of practice[1]
.
Objectively we can characterize crisis via a multitude of correlated situations rising complexity and risk of management. Moreover, there are possible crisis moving, its prophylactic and stabilizing or transformation to another kind, exit from crisis but this doesn’t exclude this repeating in the future. Not only economy developing process functions cyclically, but also nature that bears different crisis situations.
К. Marx proved that the source of crisis in a public development is economy based on private property and influencing on the structure and collision of interests. Therefore politics and ideologists in our country draw a conclusion that social and economical formation moving private property excludes the possibility of crisis appearing. Therefore in the recent time there were used terms like “growth difficulties”, “development problems”, “stagnation” they substituted the term “crisis” but at the same time they reflected the same effects and processes.
If we will translate the term crisis, it comes from Greek and means a turn, result – a sharp breakup, hard transformation. It could also mean “result, solving the problem (for example, military)”.
The modern meaning of this word is mostly popular among doctors, under crisis they mean the most important part during the illness. In this sense we can talk about “crisis” when illness becomes harder or transforms to another illness or comes to a dead end. For example, such formulation given by Kozellek sounds like following: crisis is “a point hardly being measured, when as result can be death or life”.
In XVII-XVIII centuries the term crisis became popular for deascribing processes in society like military or political crisisses. Moreover there was used the direct meaning of crisis taken from medical language.
At last, in the XIX century this conception came into economy. “Classical” economical conception being formed in the that times, means not desired and dramatic phrase in capitalistic economical system characterized by fluctuation and negative effects. But current term doesn’t include different schemas and stages of development and functioning of economy. Therefore classical term of crisis was substituted by the term “economical crisis”. About economical crisis, according to Mechlap, we can talk if “appears not wished state of economical relations, that can’t be extrapolated critical conception of various stratas of society and producing branches of economy”. Sombart defines economical crisis as “negative economical effect, when appears a danger for economical life and reality”.
According to academician E. S. Varga, “crisisses mean temporary (to the moment) forced solving of existing contradictions of expanded production”[2]
.
John М. Keyns has characterized an effect of crisis as unexpected and sharp transformation grooving trend to lowering, when under condition of inverse process there is no such sharp transformation.
Russian scientist in economical area Tugan-Baranovskiy viewed crisis as a definite effect of economical conjecture. Crisis looks not as an explosive but as undulating, it represents a sum of two waves “growing” and “lowering”.
Now we can view crisis as a breaking point between “growing” and “lowering” waves as ending stage of growing phase and it is an initial phase of economical cycle.
Long time «The classical» understanding of crisis took place in a scheme of conjecture theory of economy developing. As cyclical scheme of Schpithoff, this conception includes following stages: lowering – first rising – second rising – peak – lack of capital – crisis.
Scheme Developed by Harvard in the beginning of this century includes: Depression – Recovery – Prosperity – Financial Strain – Industrial Crisis[3]
.
Classical cycle of social production includes for main phases.
The first phase – crisis (lowering). Lowering of producing volumes and business activity, price lowering, overstocking, unemployment and bankruptcy growth. It should be mentioned that there is difference in the grade of negative impact of economical crisisses on different branches.
There is a lowering in some spheres involved in producing day-to-day goods in quite small dimensions. In the same time when negative economical situation occurs consumers can stop buying an equipment or domestic appliances waiting to the appropriate moment.
Therefore the lowering of production in metallurgy, heavy engineering or spheres of fridges or autos production could be represented more than light and food industry. There is a definitive difference in crisis reaction to monopolized and not monopolized sectors of economy. If in highly monopolized spheres during the crisis prices are almost not lowered while producing volumes are lowering. Another situation is in spheres with low concentration of capital we can see rapid price lowering when producing volumes are lowering not so rapid. In other words, monopolies with help of their economical force with rather smaller expenditures can feel crisis[4]
.
The second phase –s depression (stagnation). We can view it as a phase (more or less lasting from 6 months to three years) it is important that economical life is able to adopt to changed conditions. So it comes to phase of balancing. For this phase it is typical uncertainty and chaotic actions. Trust of an entrepreneur to conjecture is hardly able to re-establishment, he looks around and doesn’t want to risk by investing his means into business, however prices and conditions are in a process of stabilization. This phase is characterized in many cases by lowering of percent norms.
The third – enlivening. This is a stage of re-establishment. Taking place investments, prices are growing, producing, employment and interest rates. Enlivening covers, first of all, branches supplying with producing means. Being incented by success of others, new enterprises are being created. In other words enlivening ends by pre-crisis level according to macro-economical indicators. Than begins new, more active than earlier rise.
The forth – rise (boom). This phase shows an accelerating of economical developing in innovation area, appearing a great number of different enterprises of material and non-material goods, sharp rise of investments, stock prices and other equities, interest rates and salaries. In the same time begins tension of bank balances and good reserves are growing. A growth of economy directing economy to the new level that prepares the base for new periodical crisis[5]
.
Mentioned above definitions of crisis are characterized on the macro-level. In the micro-economy there is a definition “enterprise crisis”. To wide extent it means the process that endangers existence of the enterprise.
A definition “enterprise crisis” in the modern economical literature describes different phenomena from simple obstacles in functioning of enterprise via different conflicts to destruction of enterprise that can be characterized as catastrophical[6]
.
Further, enterprise crisis we can understand as not planned and not wished, process limited in time which is able to hinder or make impossible functioning of the enterprise.
Our contemporary, professor E. M. Korotlov gave the complex definition of enterprise crisis: «Crisis – is an extreme intensification of contradictions in developing; growing danger of bankruptcy or liquidation, miscoordination in economical and financial activity; brake up point in changes processes». Or, «crisis means a breakup, any qualitative change in a process, transition from existing state to another, qualitative different in the main indicators».
In this sense a transition from stability to improvement or worsering are crisis situations in developing of a system. In other words, improvement of organisation’s state is also crisis and not understanding of this fact leads to euphoria, groundless confidence that growth will continue.
As a result we can see “unexpected” sharpering of contradictions, not ability of leaders to structural changes, necessity to change marketing strategy within changed conditions with limited resources, time deficit etc. Any change in some parameters both: positive and negative leads to opposite changes in its parameters.
So, crisis is a normal state of any system. Contradictions appear, sharp and solve. According to dialectical law, quantitative changes lead to qualitative. There are no dead ends, there are contradictions. A moment of solving of a contradiction is a crisis.
1.2 Reasons of crisis appearing
From the point of view of reasons of economical crisis, they are quite different. There is a great number of objective premises. The enquiry is that an influence to the same factors of productivity cycles during different periods of time is different; moreover, its display in different countries has its own specific.
Many economists bind the duration of a cycle view together with scientific and technical progress. An active part of capital obsoleses during 10-12 years. That demanded its renewal and it was a stimulus of economic recovery. As a bench mark we can see a substitution of equipment and technology and renewal of the basic capital is called a material base of economical cycle.
The next shortering of cycles’s period (from 10-11 years XIX century to 7—8 years in pre-war and 4—5 years in after-war years in XX century). It is viewed together with accelerating of renewal periods of the basic capital under the influence scientific and technical progress in a modern world[7]
.
К. Маrx had his own system not only to reasons defining duration of cycles but also to the nature cyclicity. The principal difference from the point of view of Marx, there is a reason of cyclicity of capitalist producing – the nature of capitalism itself, the contradiction between social character of productivity and character of awarding of its results.
The representatives of neoclassical and liberal schools have different reasons of economic crisisses, not relating them to the nature of capitalism. Many of them suppose that the reason of crisisses is underconsumption by population tat leads to overproduction.
A consequent representative of underconsumption theory was Joann Robinson, the leader of Keynsianism. A medicine against crisisses is consumption stimulating.But appeared lack of consumption (purchasing capacity) is a result but not a reason of crisisses.
Nearer to Marx’s theory are the economists, viewing the reason of crisisses a disproportion or disbalance. Crisisses are caused by lack of correct proportions among spheres and chaotic actions of entrepreneurs. The disbalance theory can be good combined to another popular point of view to crisisses like result of internal conditions – political, demographical and natural.
F von Haiek is a supporter of a market freedom and violent opponent of governmental intervention, he thought that crisisses of overproduction appears because of overfinancing from government (cheap credits, inflation of demand)[8]
.
There is a psychological theory of crysis. According to J. Shumpeter. Each phase corresponds to definite psychological picture, forming an attitude to investments. Panic and disorder of crisis state lead to stagnation of investments and good mood under conditions of rise simulate a fever. «Changing situations» form irregularity of investing market.
To the moment there is a great number of different theories giving an explanation to economical crisis. P. Samuelson in his book “Economics”, for example, as one of the most popular cycle theories mentions the following[9]
:
Monetary theory explaining cycle by expansion of bank credit (Houtry etc.);
Innovation theory explaining cycle by using important innovations in production (Shumpeter, Hancen);
Psychological theory explaining cycle as a result of covering the population by waves of pessimistic and optimistic moods (Pigoy, Bedgegot etc.);
Underconsumption theory, showing the reason in too big part of income directed to reach and thrifty people in comparison to that what could be invested (Gobbson, Foster, Ketchings etc.);
Overinvesting theory, the supporters suppose that the reason of recession is mostly over- than underinvesting (Haiek, Mises etc.);
Theory of solar spots – weather – harvest (Gevens, Moore).
In estimation of these points of view we could mention that the reasons have been changed in time together with changes of in social and economical reality. Therefore it is important to pay attention to point of view of Russian economists, they give three stages of changes of opinions to economic cycles.
The first stage covers the beginning of XVIII century to the middle of 30-s years of XX century. During this period prevailed opinions that economical crisisses either impossible under conditions of capitalism (J. S. Mille, J-B. Seid, D. Ricardo) or they view this as a casual character and that system of free competition can overcome them itself (J-Sh. Siesmondy, R. Rodbertus, K. Kautskiy)[10]
.
The second stage covers period from the middle of 30-s to the middle of 60-s, XX century. Viewing of this period is connected to works of J. M. Keyns and, first of all, his conclusion that economical crisisses (more exactly stagnation) are inevitable under conditions of classical capitalism, they represent a result of nature of this market. Keyns was one of the first among western economists who declared that capitalist market includes different manifestations of monopolism and is combined with governmental regulations, therefore prices and salaries are inflexible.
As a principally needed mean of mitering the crisis’s problems and unemployment Kayns saw an idea about supply by governmental intervention to economy with the purpose of stimulating of effective total demand. To his merits in the research of cyclical factors we can refer his theory of multiplicator wich became popular for analyze the reasons of cyclicity.
The third stage in research the reasons of economical cycles is a period frpm the middle of 60-s till now. During this period it was paid more attention to differentiation of intern and exern reasons of cyclicity of market economy. Moreover to extern factors begun to pay more prevailed attention. The second, difined a position of specialists according to which government (in developed countries) not rushes to anticrisis regulation and mitering of cyclical vibrations and stabilizing of economical balance. But it draws a so called pro-cyclic policy, it means it provokes and supports cyclicity[11]
.
Detailed analyze of intern and extern approaches to explanation of cyclicity reasons is represented by so called multiplicity-accelerating mechanism of cycle. Models of a multiplicator and accelerator theoretically are viewed separately, but on a practice their mechanisms has a correlation: when begins to act one mechanism, begins its activity the second. If, for example, when a balanced state (not depending on economy system) an autonomous change of demand takes place and it is presented by growth of investments, a multiplicator begins its actions, it causes a number of changes in income structure.
Changes of income make act an accelerator and begin changes of productivity investments volumes. Changes of investments again make a multiplicator, as a result – change of income and new investments.
Deviations causing multiplicity-accelerating mechanism can be divided into three categories: going out, exploding and even. Going out are vibrations which amplitude gradually goes out to the moment where they end and income stabilizes on a definite level. In case with exploding vibrations an amplitude permanently growth. Even vibrations take place when an amplitude is constant.
The researches of a nature of production cyclucity under conditions of governmental regulation of economy bear a number of new opinions and conceptions regarding to this problem. They are conceptions of balanced business cycle and political business cycle. The first shows developing of monetary ideas. According to this conception government plays role of generator of financial shocks which destroy or disturb the balance of economic system. So, cyclic vibrations are supported within public production[12]
.
In 70s—80s this conception was actively worked out by representatives of rational expectations theory. If monetarists think that government can provoke cycle using insufficient awareness of population about real contant and purposes of different directions of governmental economy, representatives of rational expectation theory think about opposite.
They think that entrepreneurs and population have learned (due to current information revolution) to estimate and recognize the real motives of governmental decisions and they can react in time. As a result a governmental policy remains unrealized and lowering or growth becomes to be more expressive.
The second conception (of political business activity) is based on the idea that there is a dependence between the level of unemployment and level of inflation, that is defined by Fhilips’ curve. In other words there is an interdependence between these measures: if unemployment is low, prices are growing more rapidly.
Its representatives suppose that economical state in the country influences to popularity of the leading party. As the main economical indicators (to which population react) there are inflation rate and unemployment norm. If income is low, then there will be more voices for the party or president on the votes.
With the purpose to supply the win, government tries to support a special correlation of inflation rate and unemployment, that the is most appropriative for electors. Therefore administration after being elected tries to lower temps of price growing by artificial provocation of crisises and to the aend of its govering it tries to solve an opposite problem – to rise employment. It leads to prices growth, but the main goal is that to the moment of elections there will be growth of employment and inflation will not be so high yet.
Chapter 2. World crisis and its impact on economy of Russia
2.1 The main stages of the world crisis of 2008 — 2009 years.
Financial crisis came to Europe in three stages. The first stage of crisis is American hypothecary crisis. The second stage was only European. European banks tool mass positions in a bank system of Eastern Europe. For example, Czech banking system was almost completely foreign (Austrian and Italian owners). These banks wanted to give credits to population of Western Europe as buyers of a real estate in Euro or Yen as currency.
This helped to lower interest rates because risk of rippling was nearer to borrower. The payments for credits begun to grow. European center, headed by Germany rejected to help to borrowers and creditors, also creditors organized this crisis in European countries. Instead International Currency Fund (ICF) was appealed to solve this problem. Therefore in Western Europe appears a political question, what does it mean to be the part of European Union?[13]
The third wave is represented by governmental duty in European countries, but not included in a center of Europe – Greece and Portugal, possibly Spain. .In the case of Greece Germany decided not to interfere.
Naturally appear questions from peripheries: what does membership in ES means?
Appeared much more deep crisis of legitimacy. Germany recognized that some intervene to Greece was necessary. Social tension in its majority was against intervene, but policy under public pressure begun hard relations with finance elite. Similar crisis in Greece appeared between elite recognizing international regulations and nationalists[14]
.
So there was in Europe double crisis. As in USA there was crisis in relations between financial and political systems. This crisis was not so intensive as in USA because of traditional integration of these systems in Europe. But tension in relations between mass and elite is quite intensive .The second part of crisis is crisis of European Union and growing feeling that European Union is a problem and not a salvation.
As, for example, in USA grows distrust to national and international mechanisms[15]
.
United States of America and Europe are not only regions of the world, which face to legitimacy crisis. For example, in China growth of suppression of dissent comes from serious questions regarding financial expansion benefits for last 30 years.
It is interesting to mention that Russia suffers much more than China from this crisis, having its crisis earlier.
Global legitimacy crisis has many aspects and it could be viewed.
But to the moment more important is to understand that Europe and USA faced fundamental problems. Geopoliticalmeaningforthiscrisisisobvious. If Americans and Europeans think how enter the period when management by intern balance becomes a problem. Therefore there is a task to re-view possibilities and regional balances[16]
.
We see in USA a predictable process. A political elite tries to stabilize the situation entering the contractions to financial elite. It makes this to prove that political elite differs from financial. There is a precedent – a stronger control over financial system from governmental party and moral fairytales for population.
European process is less obvious. Andclear. Lack of clearance is a problem for Europe Union. This is not just a crisis in the national elite, but in international. If it leads to delegitimisation of EU we would enter unexplored territory.
The most important moment is that almost two years after normal financial panic government didn’t successfully absorbed results of this event.
According to Adam Smith, markets are not physical persons but as a result of political decision, appears political system distributing risks that helps markets to function.
To sum up, let’s consider the graph of economic cycle and stock market cycle, which one can be adjusted to any economy of any country. There are four phases: expansion (increase in production and prices, low interests rates); crisis (stock exchanges crash and multiple bankruptcies of firms occur); recession (drops in prices and in output, high interests rates); recovery (stocks recover because of the fall in prices and incomes). So, the world and Russian financial crisis were parts of this economic cycle, which is inevitably for any economy.
2.2 Impact on Russian economy
After 10 years of a strong rise of Russia, it felt an impact of global finance crisis that makes a new task in a sphere of macro-economical policy. After perfect results achieved by Russian economy during 1999 – 2007 years (7% a year) and higher temps in the first half of 2008 year (8%),there begun a gradual stagnation of economic growth[17]
.
In the first half of 2008 year there were still high temps of gross domestic product – about 8%, that partially reflected good fundamental macro-economical conditions (table. 1.1). These temps were higher than long-term potential of Russian economy (according to estimates, it reaches about 6—7%), signs of worsening are obvious.
Growth of inflation rate, shortening of unemployment and the fact that growth of a real salary if further more than productivity growth. All these signs show that we can see the worsening of situation with limits (mainly infrastructural), that stops offer.
Good fundamental macro-economical conditions of Russia, good budget policy and absence of American crisis’s effects protected partially Russian economy and limited impact of global finance crisis.
Therefore with low volume of governmental external duty, to a double proficite, good estimations of rating agencies a great number of international investors viewed Russia as a good place for investments till 2008. Making good budget and reserves in comparison to the other countries Russia could stop and limit coming of global finance crisis
One more important thing is that government had less time and resources, possible variants of economical policy and freedom to limit the crisis to a real sector[18]
.
Global crisis had a negative impact to Russia and was represented as four correlated shocks[19]
:
1. Developing of a global crisis, that lead to sharp stop of income and later to outflow of capital as a result of investors’ flow. They begun to change the direction of their investments to more safe actives (not Russia and developing countries).
2. Global crisis of a credit system has an impact to Russian banking system. There appeared problems to liquidity during short-term offset of debts.
3. Sharp falling of prices for oil leads to loweriong of proficites in budget and lowering of a great gold and currency reserves of a country.
4. On the national stock market appeared a falling (it reflects loose of investors’ trust all over the world and expecting of sharp falling of oil prices). To the middle of November of 2008 it means less than for 5 months it has lost more than 2/3 of its cost.
These shocks limit an internal demand that is the main factor of growth in Russia, that makes new economical goals for Russian government in comparison to the situation of last months.
The main task of economical policy is to limit inevitable impact of crisis to the real sector, preserving macro-economical stability and especially stability of budget system.
From the July of 2008 growth of a global finance crisis and falling of prices to oil lead to sharp worsening of perspectives of world economical development that appealed to stagnation in Russian economy.
After the 3rd
of July in 2008 when prices for oil reached its historical maximum — 144,04 dollars for Brent and 139,52 dollars for Urals, — appeared the first signs of worsening of economy. At the beginning it was caused by limited number of producers and growing of expenditures for producing (moreover real strengthening of a ruble). But falling of world demand and lowering of oil prices accelerated a process of growths’ slowdown (see. "Worseningofworldconjecture")[20]
.
From the point of view of an offer lowering of growth temps first, took place in trade branches however now we can see lowering in non-trade sectors where earlier were registered very high growth levels.
Sharp growth of salary going ahead of productivity growth and strengthening of a ruble lowered the competitive ability of trade sectors. In tote, there is a growth in a trade sectors in the second quarter of 2008 is about 3, 4 % to the first quarter was 5, 2%. Moreover in non-trade spheres in the first half of 2008 there was growth 9, 5%, it was caused by high consuming demand especially in construction and retail trade. However growth becomes slower even in a strong developing construction sphere, for example, in the second quarter of 2008 shortened from 28, 3% in the latest quarter to 18, 7 %.
If appeared the signs of growth that there will be further lowering in construction sphere, it is connected with long toughening of crediting. The latest data regarding growth of production in the main spheres shows that the third quarter of last year there was a sharp shortening of growing temps, it made only 9,5% (for similar period of 2007 there was 15,7%)[21]
.
The manufacturing is an engine of industrial growth in Russia. It showed good results till the end of 2008, however in the fourth quarter there will be a lowering of temps.
According to the latest information regarding production indicators, growth temps of manufacturing are about 8,2% (to September of 2007 year), it could be explained by growth of hydroturbines (97,3%), tractors (74%), automobiles (28,4%) and pipes (26,1%).
During the first three quarters of 2008 production volumes in manufacturing raised to 7,7% (for the same period of 2007 to 7,8%). High growing temps in manufacturing are caused partially by previous orders (mostly from governmental organizations).
However, according to toughening of crediting conditions in the fourth quarter, the manufacturing probably will face the falling of demand that will have negative result in growing production temps.
Looking into the future we could suppose that worsening of financial conditions in the world and sharp falling prices for oil in the third and fourth quarters of 2008 will lead to further lowering of economical growth in Russia. Financial shocks caused growth of borrowing costs and have negative impact on liquidity and crediting. As a result, total demand was limited, it influenced also negatively on consuming and investments level.
It is expected that in the fourth quarter all these processes will be accelerated especially in spheres more sensitive to financial changes like construction and retail trade.
Shortening of internal demand is one of the main factors of short-term growth in Russia.
Lowering of investments temps in the first half of 2008 was a beginning of gradual growth lowering of consuming growth. After boom in the first quarter of. 2008, when volumes of investments being (together with consuming) the main growth factor in a short=term perspective, it raised to 19,1%, in the second quarter there was a reduction to 13% and in the third – to 9,9%.
The same investments lowering was related to governmental corporations and mining industry where, according to information of research of the 2008, investments growth sharply felled to 6,2% (in comparison to the first half of the year 2007), in the same time in 2007 it was 19,1%.
A contribution to developing of circumstances made limitation of offer, growth of global uncertaintes and changes of Russian and foreign investments. Because of growth of uncertainties there were limited investing horizons and long-term investments were revised.
As a result there were lowered growing temps of direct foreign investments. The total investments into gross domestic product are still about 22%, it is lower than level typical for actively developing Asian countries. Moreover worsening of crediting conditions, growing uncertainty and supposed unemployment growth have already influenced to consuming growing temps.[22]
.
In the future there will be problem: the investments are mostly concentrated in non-trade spheres. Account for non-trade sector has 2\3 of all the investments into the main capital that is reflected in the total growth structureMore detailed investments analyze (of each branch) shows that the main investments volume is still concentrated in mining industry and transport.
Growth of investments in a trade sector have shortened in the first half year of 2008 to 8,1% (in 2007 it was about 16,1%). As concerns a non-trade sector, we can talk about retail trade takes place the sharp shortening of investments into the main capital, it is a result of toughening crediting conditions.
In the same time, investments into the main capital in the railway system raised to 49,3% in the first half year of 2008, it is possibly could be related to large previous orders to locomotives and passengers and cargo wagons[23]
.
Growth of a real salary goes ahead the productivity that stops competitive ability of economy.
However the salary growth begun to stop while unemployment rate is lagging indicator of a real commercial activity.
According to Rosstat’s information, during the first 9 months of 2008 the real growth of salary is 12,8% (for the same period of 2007 there was 16,2%)[24]
. Unemployment rate lowered to 5,3%. This shows that economical developing temps still didn’t touch the labor market.
However, situation will change in 2008, big non-trade branches and labour-intensive branches like construction and building will open a realizing of already existing and new projects, adopting to higher cost of borrowings, lower availability of credits, undefended demand and, therefore, lower profitability. The similar situation we could expect: number of unemployed will grow as effect of restructuring of bank sector.
2.3
Methodsofworldcrisisdischarge
Held by Russian government anticrisis policy in 2008-2009 helped not only to prevent deep falling of economy, but also lead to positive growing temps.
The main indicators of economy (January – February of 2010 in per cent in comparison to similar period of the last year)[25]
.
gross domestic product – 104,5 (90,2);
Consumer price index to the end of period -102, 5 (104,1);
Industrial productivity index -105, 8 (85,4);
Investments into the main capital – 92,02 (82,8);
Productivity index of agriculture – 103,2 (102,2);
Real monetary income of population— 108,1(98,3);
Real salary — 102,0(99,6);
Turnover of retail — 100,8(101,3);
Export, mlrd dollars – 57,11(36,5);
Import, mlrd dollars. – 27,21(23,9);
Average price for oil Urals, dollars. США/barrel – 74,3 (42,6).
According to calculations of Ministry of economical Development of Russian Federation strengthening of ruble (in February 2010) in estimation to dollar was 0,1%, to euro – 4,4%, to pound – 3,1%. Strengthening of a real effective ruble rate is estimated for the first two months of current year, it makes 5%.
At the beginning of current year inflation is quite moderate. In the February of 2010 inflation was 0, 9% (1,7% – the last year), according to results of last two months prices raised to 2,5%, that is lower than during last two years (last year — 4,1%).
At the beginning of the year an important contribution to inflation have done traditional rising of tariffs. Housing and communal service for two months became more expensive to 11, 6%, but this is lower than in the last year (17,7%). Price growth raising in the beginning of 2010 year was caused by growth of monetary aggregates during the last months and irregular expenditure of budget[26]
.
Beginning positive trends of economy, that helps to suppose that growth even not strong is balanced and not based on appearing of new “bubbles” in different markets. Specialists of Ministry suppose that there is no any obvious backgrounds for the beginning of a new crisis wave which will take place according to estimations of some world experts.
Stable situation is in a social sphere – as a result of held anticrisis policy they could shorter the growth of social tension. In comparison to January of 2010 in February the situation has improved.
Total number of unemployed lowered to 6,4 mln. people and unemployment rate was 8,6% from economically active population (against 9,2% – in January). Moreover there is growth of a employer’s need in workers, this need was declared to governmental organizations of placing services[27]
.
In the same time, positive trends still not have constant character. Russia as the other world economies is in difficult economical conditions.
External factors have an active impact to the Russian economy. This is caused by circumstances that while temps of economical growth are high during last ten years, structure of our modern economy is still not ideal and it is not able to correspond to demands of dynamically developing country.
It differs from structure of economy in developed countries where specific weight of education, science and medicine is very high.
Conclusion
World economy crisis begun from USA, came to Russia at the end of summer – beginning of the fall an 2008. The last 2009 was difficult for Russian economy, it touched all the spheres.
In the beginning of 2010 Russia is still situating in hard conditions of a great number of great number of indefinite world economical factors. According to estimations of regional economical commissions UNO Russia (due to data of 16.02.2010г.) is still near to the ending crisis stage , therefore Russia is did not reach the bottom after which economy rise will follow.
In the end of 2008 – beginning 2009 Russian economy entered the new developing phase: production, public income and capitalization of companies are lower than earlier.
Crisis made to re-view the priorities in budget and finance-crediting policy to make some changes into legislation.
In a budget message of Government of Russian Federation about budget policy in 2010 – 2012 years (from 25.05.2009 г.) it was noted that budget policy should be oriented to adoption of budget system to changed conditions and to preparing the backgrounds for stable social and economical development of the country during after-crisis period. Conservative budget policy supposes control of governmental expenses, but harming strategic purposes of development.
In a middle-term perspective there appear limits to a budget expenses for the concrete directions of governmental expenditures. Moreover Ministries in charge should be interested in growth of expenditures productivity and not their rise.
There is no information in message regarding concrete offers, but there was mentioned that purpose of budget policy is not only to shorter the expenditures but also to create an active instrument for exiting from crisis and public producing support.
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