Russian Presidential Adviser Andrei Belousov has proposed a model for boosting the country’s economic growth, including plans for cheaper borrowing and improving the country’s business climate, Izvestia reports.
According to Belousov, the plans include making loans cheaper by reducing the Central Bank’s key rate to about five percent, along with efforts to improve the investment environment and shield businesses from law enforcement pressure and measures to increase businesses’ access to technologies.
The implementation of these initiatives could indeed allow Russia to increase its GDP growth rate, experts interviewed by Izvestia commented.
Out of all the measures proposed by Belousov, the most important ones are aimed at improving the investment climate, says Vladimir Nazarov, director of the Russian Finance Ministry’s Research Institute of Finance.
If the government succeeds in carrying out a series of profound reforms to that end, Russia’s economy may start growing by at least three percent a year. In addition, the Bank of Russia has taken a more active stance on changing the key rate in 2019, Nazarov added.
Alexander Deryugin, a professor at the Russian Presidential Academy of National Economy and Public Administration (RANEPA), agreed that the implementation of measures proposed by the presidential adviser would indeed make it possible to bolster the economy. However, in his opinion, it would be too optimistic to expect reforms on all three tracks to be launched at the same time. The government cannot influence the central bank’s decisions on the key rate while increasing the GDP growth rate is beyond the regulator’s responsibility, the expert explained. According to him, the Bank of Russia is unlikely to be prompted to reduce the rate to five percent anytime soon.
It will also be very difficult to quickly reduce law enforcement’s pressure on businesses, Deryugin added. Legal amendments won’t solve the problem because it is more about law enforcement agencies’ overall intolerance of businessmen than about legislative flaws, the professor pointed out.