The economy in transition. Overviews of the economic policy of postcommunist Russia. 1998–2002

Publication date
Thursday, 27.11.2003

Ye. Gaidar V. Mau S. Sinelnikov A. Ulyukaev N. Glavatskaya L. Lopatnikov S. Batkibekov S. Drobyshevsky O. Izryadnova P. Kadotchnikov I. Trounin O. Lugovoy M. Dombrovsky G. Malginov A. Radygin A. Gontmakher R. Entov N. Shmeleva Yu. Simachev Yu. Bobylev S. Tsukhlo Ye. Serova I. Dezhina N. Volovik N. Leonova S. Prikhodko I. Kolosnitsyn A. Surinov I. Rozhdestvenskaya S. Shishkin I. Starodubrovskaya

IEPP monographs

The book which is being offered for the readers’ attention represents the continuation of the work published in 1998 under the title “The economy in transition. 1991 – 1997”. The 1998 financial crisis marked the borderline after the first phase of postcommunist transformation – the phase during which the macroeconomic and institutional prerequisites for a renewed economic growth were created. This predetermined the subject addressed within the framework of this book, which deals with the new phase of economic growth in Russia and the economic policy which could provide the most appropriate conditions for such growth.



INTRODUCTION (Russian lang)


Section I
Political and economic prerequisites and consequences of the August crisis of 1998
Introductory remarks

Chapter 1. Political nature and economic sources of the financial crisis
1.1. Budget deficit as a political and Constitutional problem
1.2. Political weakness of the executive branch and the public debt crisis
1.3. Economic prerequisites of the crisis
1.4. Pre-crisis phenomena in the Russian financial system
Chapter 2. The Government of S. Kiriyenko and the fate of the anti-crisis program
2.1. Replacement of the Cabinet of Ministers: the grounds and first consequences
2.2. Culmination of the crisis and the program of anti-crisis measures
2.3. The fate of the anti-crisis program
2.4. Political problems of devaluation
Chapter 3. The crisis and economic and political alternatives. A Communist Government in the capitalist economy
3.1. Inevitability of choice between the inflationist and anti-inflationist policies
3.2. The Government of Ye. Primakov: elaborating the economic program
3.3. Gradual overcoming of the crisis
3.4. The post-crisis recovery of production: export oriented industries and import substitution
3.5. Social consequences of stabilization policies

Section II
Russia’s economic policy at the outset of the new phase of post-socialist reforms

Chapter 4. The post-crisis political and economic stabilization
4.1. The new alignment of political forces
4.2. The strategic program of social and political development of Russia
4.3. The economic program and economic policies

Chapter 5. State finances and budgetary policy in the situation of the post-crisis economic growth
5.1. Budgetary policy at the background of favorable economic conditions in 1999 through 2002
5.2. The public debt dynamics in post-crisis years
5.3. Budget of the enlarged government in 1998 through 2002 
Annex. Expenditures of the federal and territorial budgets in 1998 through 2002 (in % of GDP)

Chapter 6. Key provisions and prospects of the tax reform
6.1. First attempts at a large scale tax reform
6.2. Major changes in the Russian tax system in 2003 through 2003
6.3. Major outcomes of the reform
6.4. General international trends of development of tax systems
6.5. Tax legislation: prospects of further development
Annex. Tax systems of France and Italy

Chapter 7. Financial federalism
7.1. Economic reforms of the early 1990s and transition to the new principles of federative relations
7.2. Reforming budget federalism: 1998 – 2002 
7.3. Further prospects of the reform: developing the system of division of power among authorities of different levels

Chapter 8. State monetary policies and the RF balance of payment
8.1. Inflation and money supply
8.2. Money supply and demand
8.3. Exchange regulation and exchange control
8.4. The state of the balance of payment
8.5. Monetary regulation
8.6. Inter-enterprise payments

Chapter 9. Russian crisis lessons in the international context: five years later
Introductory remarks
9.1. Immediate consequences of the crisis: profound shock and fast recovery
9.2. Sources and prospects of economic growth and fiscal equilibrium
9.3. Business and investment climate
9.4. Fighting inflation: inconclusive outcomes
9.5. How may future exchange crises be avoided?
9.6. Changes in the international environment
9.7. Conclusions

Section III
Transformation of ownership relations and institutional problems of development of the corporate and public sectors of the economy 

Chapter 10. Transformation of ownership relations: 1998 – 2003
10.1. Privatization process in 1998 through 2003: dynamics and applied problems
10.2. Redistribution of ownership rights in the second half of 1990s through early 2000s: dominating owners, concentration, performance of enterprises
10.3. Shifts in the structure of joint stock capital and corporate governance trends in transitional economies

Chapter 11. Modern trends towards consolidation, integration, and reorganization of large corporations (groups)
11.1. First steps in the general consolidation logics
11.2. New trends in 1999 through 2001: integration, transition to complete control, and “legalization” of groups
11.3. Differentiation of strategic motives depending on the group “maturity” (as based on the developments in 2002)

Chapter 12. Corporate governance: economic limitations, factors, and mechanisms
12.1. Importance of the problem
12.2. Dividing ownership and management, or the agent problem
12.3. Dividing management and finances, or the source of financing problem
12.4. Contradictions and specifics of legal regulation
12.5. Corporate governance, reliable obligations, and  “institutional environment”

Chapter 13. External mechanisms of corporate governance
13.1. Corporate stock market
13.2. Bankruptcies
13.3. Corporate control market

Chapter 14. Problems related to the management of state unitary enterprises
14.1. General characteristics of the sector
14.2. Certain avenues of the SUE reform

Section IV
 The real sector of the economy: post-crisis development

Chapter 15. Development of the real sector after the crisis of 1998: general trends
15.1. Dynamics of key macroeconomic indicators
15.2. Dynamics and structure of final demand
15.3. State of the fixed assets across the sectors of economy and industries
15.4. Changes in the sectoral structure of investment in fixed assets
15.5. Problems of financing of investment expenditures

Chapter 16. Sectors of the economy under new conditions
16.1. General changes in the structure of production in the real sector of the economy
16.2. Oil and natural gas complex in the post-crisis period
16.3. Development of the metallurgical complex
16.4. Mechanical engineering complex

Chapter 17. Russia’s industrial enterprises after the default of 1998
(as based on the results of business surveys)

17.1. Dynamics of effective demand
17.2. Dynamics of non-monetary types of demand
17.3. Finished stocks: evolution of utilization
17.4. Development of competition

Chapter 18. Development of the agri-food sector
18.1. General characteristic of the agri-food complex after 1998
18.2. Trends of development of the Russia’s agri-food sector at the background of trends observed in other post-socialist economies
18.3. Financial situation of agriculture
18.4. Changes in the agricultural policy
18.5. Accession to WTO: possible consequences for the Russia’s agri-food sector
18.6. Development of land relations in agriculture
18.7. Growing effectiveness of utilization of production factors in agriculture
18.8. Rural social problems in relation to the new stage of development of the agrarian sector
18.9. Prospects of development of the agri-food sector

Chapter 19. State policy in the sphere of development of innovation activities
19.1. The scope, sources, and avenues of innovation activities in modern Russia
19.2. Development of the organizational and financial infrastructure of innovation activities
19.3. Institutional environment of the development of innovation activities: changes in the legislation

Chapter 20. External economic activities
20.1. Business situation on world markets
20.3. Regulation of foreign trade
20.4. Regulation of EEA in the sphere of economic relations with CIS member countries
20.5. Market status of the Russian economy and foreign trade
20.6. Accessing to WTO
20.7. Russia and EU: prospects of economic relations

Section V
Social sphere

Chapter 21. Household incomes and expenditures
21.1. Dynamics of real incomes, wages and salaries
21.2. Poverty problem 
21.3. Differentiation and concentration of incomes

Chapter 22. Certain aspects of implementation of market reforms in sectors of the social and cultural sphere (1998 – 2002)
22.1. Introductory remarks
22.2. Reforming the public education system
22.3. Health care: factors hindering the reform

Chapter 23. HPU reform: seeking new approaches
23.1. Five years (1998 – 2003) – major outcomes
23.2. The crisis of the HPU reform concept
23.3. Searching for an escape from the deadlock 
23.4. Implementing the reform: the pattern and limitations of possible transformations
23.5. Conclusions and prospects

Russia on the threshold of a new stage in post-communist development

1. Certain specifics of the recovering economic growth
2. Is a new economic “breakthrough” necessary and possible?
3. Russia and other countries at the background of long term historical outlook
4. Leading and “catch up” developing countries
5. The Russia’s demographical dynamics: a specific legacy of socialism
6. Immigration problems
7. Long term foreign exchange policies

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