Oleg Sapozhkov on the basis of long-term development plans for the Russian Federation

The Kremlin’s extensive work on formulating new economic plans for the development of the Russian Federation until 2030 in the form of instructions to the government (see “Kommersant” on April 2) following the results of Vladimir Putin’s message to the Federal Assembly (see “Kommersant” on March 1) arouses interest in calculations for which it was built. The find of the past week for me was the release of “Problems of Forecasting” (No. 2 for 2024), published by the Institute of Economic Forecasting of the Russian Academy of Sciences, with the title article “Russia 2035: a new quality of the national economy” by mainstream economists – the head of the institute, Alexander Shirov, as well as Dmitry Belousov, Andrey Blokhin , Mikhail Gusev, Andrey Klepach and Marat Uzyakov. In terms of its model, it is close to the ideas of messages and instructions to the government – and at the same time reveals their internal relationships in a little more detail.

Let us recall that the authorities’ plans involve significant government participation in supporting the population’s demand for the products of industries least dependent on external supplies (construction, agriculture) – mainly through infrastructure injections, support of domestic output with this demand, restructuring of the financial market to transform long-term savings into investments, investments – in the growth of supply and labor productivity (the latter should also remove the structural shortage of workers), as well as in R&D, which should provide the isolated economy with its own technologies, on which it will grow in the long term, according to the authors of the INP publication, at an average rate of 3 .5% per year until 2030 and 3.3% per year until 2035.

The text, however, describes this scenario in two intonations simultaneously. The first is speculative: the authors’ goal was to show that such a scenario is theoretically possible. The second is imperative: investments “must” grow, science must develop, the state must invest in transformation, regardless of current profitability (even at the cost of increasing public debt), and the population must invest in processes now through demand and in the long term through savings. These assumptions, however, raise questions. What happens if at least one of these “connections” does not work? What if construction stimulation turns out to be unclaimed, as in China? What if technological limitations cannot be circumvented, like in Iran? If instead of productivity growth in the Russian Federation it does not stop wage race in conditions of zero labor supply? What if the long-term savings system triggers a crisis of “misguided” investments? If, if… In the end, the dam in Orsk also “should have” held back the water, and the windows in the offices of the Ministry of Economy and the Ministry of Digital Development in the City, knocked out by Ukrainian drones in the summer of 2023, “should have” already been glazed. Reality, however, does not always correspond to expectations – and after the departure of the expert structures remaining in the Russian Federation into the power corporation, there is no one to discuss the reasons with.