Russian Society and the Economic Turning Point: opportunities - - PowerPoint PPT Presentation
Russian Society and the Economic Turning Point: opportunities missed, opportunities taken Mikhail Dmitriev President, Business partnership New Economic Growth Chatham House London, 13 April 2016 Foreign debt deleveraging: 2 times larger
2
Source: Development Center of HSE, CBR
Total Government CBR Banks Non-financial companies
3
Fixed investments
Yoy (LHS) 3 month av.
Gross foreign debt redemption goes down
but refinancing ratio for non-financial sector has been shrinking (~70% Q3 2014, ~ 50% Q4 2014, ~ 30% Q1 2015)
4
Source: Institute of Economic Policy, Development Center of HSE % YoY Retail trade Fixed capital investment GDP 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Retail trade Real wage 21 month 43 months
Corporate profits, real terms (%) Real wages (2012=100%) Total Industry Manufacturing Actual Seasonally adjusted
Source: Institute of Economic Forecasting of Russian Academy of Sciences
Source: Institute of Economic Policy, Development Center of HSE Food consumption fell to the level of the beginning of 2008 Food and tobacco retail sales (2012=100%) Non-food retail sales (2012=100%) Actual
Actual Seasonally adjusted Seasonally adjusted
Do not know Can afford everything (second house, car, etc) Can afford consumer durables (fridge, TV, furniture, but not car) Can afford food and clothing but not consumer durables Can afford food but not clothing Even food is a problem
Source: Institute of Economic Forecasting of Russian Academy of Sciences
Source: IEP
% Machinery and equipment (average import substitution ratio - 17%) Materials (average import substitution ratio - 57%) Food Textiles and clothing Construction materials Machine-building Steel Wood Non-ferrous metals Chemicals Food Machine-building Textiles and clothing Chemicals Wood Construction materials Steel Non-ferrous metals Import substitution ratio Import reduction
Loan to deposits ratio Household savings Non-cash savings FX purchase Consumption
Source: Institute of Economic Forecasting of Russian Academy of Sciences
Fiscal deficit (-) in percent of GDP CPI Federal budget Regional and municipal budgets
CPI Base inflation
(plan) (fact)
Source: Institute of Economic Forecasting of Russian Academy of Sciences
Source: Institute of Economic Forecasting of Russian Academy of Sciences
Dependency ratio, % (rhs) Working age population, mln Labor participation, mln Employment, mln
Source: Development Center of HSE.
$35 p/bl $50 p/bl $35 p/bl $50 p/bl Source: Development Center of HSE.
Regulatory reforms for infrastructure Retirement age increase Enhancement of territorial labor mobility Public sector restructuring Elimination of barriers in construction and development Urban planning modernization Reform of municipal finance Enhancement of commercial rental housing supply Long-term finance development Facilitation of exit an entry of companies M&A regulation and infrastructure and protection of minority shareholders Law enforcement reform Reform of judiciary
Source: the World Bank.
19
Source: Daniel Treisman
Война с Грузией
20
(VTSIOM survey)
Source: JPMorgan on VTSIOM data.
Economic sentiments Trust to V.Putin
%
21
Source: Rosstat
GDP, 1990 =100 GDP, 1998 =100 Gross fixed capital formation, 1990 =100 Gross fixed capital formation, 1998 =100 Household consumption, 1990 =100 Household consumption, 1998 =100
Source: Human development report – 2014. Analytical Center of the Government of Russia.
23
Source: FOM, Levada-Center
28 1 4 6 10 11 12 21 41 5 10 15 20 25 30 35 40 45
Other questions, no questions Crime and terrorism International issues Education and science Infrastructure and local problems Housing and utilities Corruption and resentment against the authorities Econommic problems and inflation Income level, social protection and pensions
26 1 1 2 2 5 16 25 33 5 10 15 20 25 30 35
No answer, irrelevant answer Personal wishes Restore Russia's might Put an end to Chechen war Address problems of housing and utilities Address problems of culture, science, health and education Stimulate economic growth and employment Improve the effectiveness of public management Rise the living standards and resolve social problems
Source: CSR Source: CSR
24
13 15 21 22 22 28 29 33 35 36 39 40 41 42 42 43 45 46 46 46 47 48 48 48 48 49 51 52 53 53 56 57 58 58 60 62 62 64 66 67 70 75 81 94
Earthliness Confused Ignorance of the history and culture of their ow n people Prow estern view s The fact that democracy in the country is in danger as show n by the latest elections Do not know w hat needs to be done Irresponsibility , hollow promises Managerial incompetence – unprofessionalism Inability to build a professional army , w eak army Ever-lasting lies
ith any body Ongoing inflation in the country that eats up pensions and w ages, and child benefits Creating life conditions that make people think how to let their flat in Russia Inefficient economic policy Only good at promoting their ow n image The fact that Russia is given a raw
Longing to enj oy a better life than common people, caring for themselves only Demagogy , only slogans and promises The fact that this policy is only beneficial for the rich Enslaving terms of mortgage lending Beadledom Good at stealing and pay ing to remain in pow er Uncertainty
The fact that civil servants are better off than entrepreneurs Robbing the people No care for the old people A lienation from the people Endarkenment of the people Improper police actions Inefficient social policy Transferring their money abroad Disrespect for their ow n country law s Reduced number of government-paid university students Seeking benefits only for themselves A ctive only during elections Poor follow
Inability to improve the enforcement of law and order in the country Introduction of Unified State Examination Seeking to get every thing for themselves and their relatives, clan sy stem Seeking to retain their pow er in any w ay possible Ever-lasting talk about anticorruption campaign w ith no real action taken Collapse of the economy and agriculture Bad solutions to the housing problem Ongoing increase in utility prices
Source: Center for Strategic Research
Breakdown of responses to question: “What do you think is the biggest threat to Russia now?”, %
25
Source: Levada-Center
Feb. 08 Jan. 09 Jan. 10 Jan. 11 Jan. 12 March 13 Jan. 14 Jan. 15 Price rise, general impoverishment of population 51 55 47 62 58 55 49 54 Economic crisis 22 59 39 30 38 26 29 49 Drawing Russia into military conflicts outside the country 14 8 7 6 9 6 12 33 Rising unemployment 30 56 43 42 40 30 31 26 Growing tension in relations with Western countries 12 5 3 3 5 4 7 22 Increased uncertainty regarding the future
14 17 20 22 12 16 Conflicts with neighboring/CIS countries 8 13 5 6 6 4 9 13 Increased dependence on the West, Russia’s transformation into a third-rate power 15 7 11 12 16 15 11 11 Weakness, incompetence of country leadership 14 7 15 14 20 16 13 9 Arbitrariness of authorities 20 8 17 18 19 18 12 9 Russia’s colonization, plunder of national wealth by foreigners 17 6 10 14 12 14 12 8 Civil war
2 3 8 4 5 7 Breakup of Russia into separate regions 18 5 9 10 10 14 12 6 Other 6 7 9 8 6 6 5 3 Difficult to answer 10 5 8 4 5 9 7 6
26
10 20 30 40 50 60 70 80 90
Approval of V.Putin Approve Disapprove
Source: Levada-Center .
27
Source: Levada-Center .
10 20 30 40 50 60 70
July 00
Approve Disapprove
28
Source: Levada-Center .
10 20 30 40 50 60 70 80
July 11
Do you approve the activity of the State Duma?
Approve Disapprove
29
Source: Levada-Center .
10 20 30 40 50 60 70
Approve Disapprove
30
Source: Levada-Center .
10 20 30 40 50 60 70 80
Approve Disapprove
31
Source: FOM, Levada-Center
28 1 4 6 10 11 12 21 41 5 10 15 20 25 30 35 40 45
Other questions, no questions Crime and terrorism International issues Education and science Infrastructure and local problems Housing and utilities Corruption and resentment against the authorities Econommic problems and inflation Income level, social protection and pensions
26 1 1 2 2 5 16 25 33 5 10 15 20 25 30 35
No answer, irrelevant answer Personal wishes Restore Russia's might Put an end to Chechen war Address problems of housing and utilities Address problems of culture, science, health and education Stimulate economic growth and employment Improve the effectiveness of public management Rise the living standards and resolve social problems
32