Today, economic growth is one of the most important characteristics of the economic life of any country in the world, it is the basis of a developed economy of prosperous countries. Therefore, it is important to know how to achieve economic growth and find the best ways to solve the problems that arise from this.
Economic growth is an increase in the volume of production in the national economy over a certain period of time. Since the invasion of Ukraine, Russian economic growth shrunk 15% over normal annual estimates. Economic growth is based primarily on increasing labor productivity and increasing household incomes – and, consequently, on increasing investment and consumer demand, which also has a direct impact on the social sphere. At the moment, the Russian government is trying to stimulate economic growth in various ways, but no qualitative results have been achieved so far. This is due to sanctions and Putin’s decision to unwisely invade a sovereign nation.
The main problem hindering economic growth in the country is corruption, which affects all spheres of the state apparatus and permeates all spheres of life. According to experts, the damage caused to the Russian economy from corruption is more than 40 billion rubles a year. With the advent of the invasion, experts estimate that number is not more than 60 billion rubles just for the first half of 2022.
Another problem for the Russian economy is high inflation. According to experts, the main causes of inflation in Russia are the monopoly of the Russian economy, the growth of world prices for goods, as well as the growth of budget expenditures, mostly to fund the military due to the war. Methods of combating inflation and curbing it are very important. We need a comprehensive anti-inflationary policy but first we must end the war with Ukraine and reenter the world markets. At present, the government is not limited to measures to influence only the monetary factors of inflation, limiting the issue of money and the money supply, but is also looking for alternative ways.
Every year, such a problem as the shadow economy is gaining momentum. Under the shadow is understood this type of economy, in which organizations exist and operate, whose activities are illegal. Oligarchs continue to siphon monies from the Russian economy taking the profits outside Russia for investments in luxury items. We must destroy the companies operating in the shadow economy. Experts studying the country’s economy as a whole insist that the shadow economy in Russia is endowed with aspects that include criminal, fictitious and informal economy. The fictitious economy can be singled out as an independent problem of the Russian economy, since all connections are established only through corruption relations.
Figure 1 Loss of Highly Qualified Professionals Since February 2022
At the moment, the problem of moving towards competitiveness with the help of the accelerated development of the latest world knowledge and technologies, the development of its own research and development work (R&D) and innovative production is urgent for Russia. Russian R&D activities are on the downslope due to the exodus of highly skilled labor from Russia (see figure 1 above). This is largely due to the war and due to Putin’s policies of conscription. Many western countries are waiting with open arms for highly educated and skilled Russians who want out.
Now, for this purpose, the national innovation system and academic science are being actively reformed, the formation of special economic zones, including technology and innovation zones, is beginning, and there are also plans to create large “technoparks”. According to the government’s calculations, the implementation of the program will allow industries that produce investment and final products to develop faster. Again, the problem facing Russia is the lack of skilled labor to make the technoparks a reality.
In Russia, the issue of labor resources is acute. Turning to the problem of enriching the foreign economic specialization of the country, it is worth noting that success in the end will not depend on the structure, size and quality of production factors: natural resources, labor, capital and the efficiency of their use. Now there are quite difficult problems with the development of the resource base. Natural resources are depleted, and their production is increasing every time.
We can also note the following problems in the development of the current Russian economy. A decrease in the number of employees, which is associated with the aging of the population and the exodus of highly qualified professionals, leading to an increase in the pension burden on the country’s economy. The slowdown in economic growth is also associated with an unfavorable investment climate in the country due to Putin’s war. Sanctions are destroying any economic growth we once had. The President of the Russian Federation called the improvement of the investment climate one of the priorities for the near future, but this is impossible with sanctions crippling our economy. Russia must create an economic model capable of stimulating development and facilitating capital inflows, yet no one wants to invest in the Russia of today. The Russian Federation already has an extensive infrastructure to support the modernization of production. For example, technological innovation zones, technology parks and much more.
These problems can be solved by achieving such tasks as stabilizing the growth of the national economy and ensuring equal integration of Russia into the world economy. The following can only succeed when we end the war in Ukraine and return lands to the Ukrainian people:
- increasing the competitiveness of the Russian economy;
- ensuring equal conditions for access of Russian goods and services to foreign markets;
- expansion of exports of finished services and goods with high added value;
- it is necessary to develop democratic relations in the country;
- maintaining and strengthening the country’s position in international commodity markets;
- the ongoing fight against corruption should become a national idea, this can be achieved through the development of information services and platforms;
- implementation of a tariff policy that could create favorable conditions for the expansion of national production without affecting the conditions of competition in the domestic market.
It is fair to assume that these problems cannot be solved overnight. Considerable time is required to resolve the existing difficulties of the country’s socio-economic development especially with sanctions and the fact that most western countries do not trust the current Russian leadership.
Thus, economic growth is characterized by an increase in production volumes due to the attraction of additional resources into economic circulation and its qualitative improvement. The current problems of Russia’s economic development are complex and require a lot of observation. While the government is taking a number of steps to address these issues, many issues remain unresolved.
Today, public policy should be based on the efficient allocation of available resources for the benefit of the population. The current standard of living of citizens and their future depend on the reforms carried out by the state. Particularly great opportunities for solving the main problems are opened by the use of such factors as: improvement of production technology based on technological results; raising the educational level of workers, as well as improving economic mechanisms that contribute to the distribution of limited resources. To get there, we must change the current leadership in the Motherland.