Possible%20Russian%20Development%20Paths%20%20An%20Analysis%20of%20Recent%20Trends%20in%20Policy%20and%20Performance%20and%20Some%20Back-of-the-Envelope%20Musings%20about%20the%20Future

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Possible Russian Development Paths An Analysis
of Recent Trends in Policy and Performance and
Some Back-of-the-Envelope Musings about the
Future

• Christian Gianella William Tompson
• Economics Department
• Organisation for Economic Cooperation
  Development
• Global convergence scenarios structural and
  policy issuesOECD, Paris, 16 January 2006Salle
  des Nations, Tour Europe, La Defense

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The usual disclaimer

• The views expressed in this presentation are
  those of the authors and do not necessarily
  reflect the position of the OECD or its member
  states.

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Contributions to GDP growth (not adjusted for
capacity utilisation rates)
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Natural resource sectors (mainly oil) have been
driving the growth of output.
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Non fuel TB and exchange rate
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Cumulative variation of the trade balance and
factors contributions
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Russias population is expected to continue
shrinking rapidly to 2050
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as the overall population grows older.
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The labour force is therefore set to shrink
markedly.
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Investment still contributes too little to
growth.
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Saving -investment balance (in GDP)
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A longer-term shift in economic policy may be
unfolding.

• The authorities are well aware that investment
  levels are too low. The question is how to boost
  them?
• A two-track strategy is possible
• Of course, it would be foolish to bank on
  consistency. . .

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A few observations on Russias choices

• Institutionally, Russia is not very well equipped
  for any of the more demanding options.
• The survey results are worrying, not least
  because they suggest deterioration in some of the
  areas in which Russia most needs to make
  progress.
• Many areas will require substantial improvement
  regardless of the strategic direction Russia
  takes.
• This implies that a very large part of the
  structural reform agenda should be relatively
  non-controversial. So why have we seen so little
  progress since 2003?