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Lost decade: the Russian economy lagged behind the world in 8 times

While the Russian state propaganda encouraging the public belief in the greatness and power, the Russian economy is sinking in a swamp of stagnation.

By the middle of 2018, Russia’s GDP was finally able to return to pre-crisis levels, estimated by experts of Higher school of Economics. After rising 1.5% last year and 1.3% and 1.9% for the first two quarters, he for the first time exceeded the levels of the beginning of 2014.

Although output plus served as a victory over the crisis, in fact, the last 10 years has been lost to the economy. The current size of GDP higher than 2008 a little more than 4%, follows from the data of the HSE.

Having gone through two recessions in 10 years, the average Russian has grown by 0.4% per year – 8 times more slowly than the world economy as a whole, adding, according to the world Bank, to 31.2%.

Gap with the US was a 4-time – the U.S. GDP has grown over 10 years is 16.2%. The Chinese economy has increased by 101%, ahead of Russia’s more than 20 times.

“This year Russia will be the 166th place in the world in terms of growth”, – says head of Department of capital markets IMEMO Yakov Mirkin: IMF predicts 1.7 percent and slowing to 1.5% in the next 5 years..

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This is a third slower than the rising developed countries (2.4% and 2.2% in the 2018-19 biennium), half the performance of the world economy as a whole (3.9 per cent for the next two years) and almost three times worse in developing countries, the growth of which the Fund estimates 4.9% this year and 5.1% next.

Deteriorating infrastructure, the excess of the state and regulation, coupled with the weakness of public administration – all this reduces competition, increases the concentration of assets and inhibits the growth, says the IMF. Oil on the fire pour the sanctions, ended the flow of private investment and rejecting Russia on the sidelines of global technological progress.

The share of innovative companies in Russia is less than 1%; for 10 thousand employees accounted for only 1 of the industrial robot against 531 in South Korea, 176 – in the US and 49 in China, according to Boston Consulting Group.

Although the country desperately needs skilled workers, almost 80% of the population do not have the skills and competencies to work in today’s markets. With 50% of Russian scientists 52% of senior managers, 54% of IT professionals and 49% of employees are engineering graduates would leave the country and work abroad.

Annually leave the country, 100 thousand people, of which 70% is an “intellectual migration” highly skilled, calculated in Ranepa.

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By the end of 2017, funding for science has been reduced to a minimum of 10 years, until 377,9 billion. This is three times less than the state spends on providing government officials and restriction of state power (1.2 trillion roubles), and 13 times less than the expenditure on the army and police (almost 5 trillion rubles).

“The Russian economy is, in fact, a derived function of demand and world prices for raw materials, says Mirkin. We fed, till we’re dripping from the oil tap, the pipelines. All set to the braking, to backup, to carve a shrinking pie.”

The number of people willing to share has doubled over the past 20 years: the army of bureaucrats has grown from 2.4 million people in 1995 to 5.3 million, according to BCG. While in the small business employs only 15% of the population against 40% in India, 52% in Brazil, 63% in Germany and 80% in China.

“Too much risk, taxes and administrative pressure, explains Mirkin. – We have created florizoone economy in which the business prefers to withdraw money. In 25 years Russia has become a country of net export of private capital. During this time it has gone “outright” about 800 billion dollars.”

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