We are inclined to nominate this brilliant essay from the Moscow Times by Vladislav Inozemtsev, the director of the Research Center for Postindustrial Society and the publisher and editor-in-chief of Svobodnaya Mysl magazine for the title of most devastating critique of Putinomics ever written by a Russian. Just goes to show there is still some hope left, while great patriots like this have the courage to speak out:
Russian experts and policymakers have increasingly raised the question of productivity, stressing that the country’s lag behind leading global economies has become an acute nationwide challenge. On May 15, President Dmitry Medvedev addressed the issue at a meeting on modernization and technological development and emphasized that “we must not forget one simple, unfortunate fact: Labor productivity in this country is currently equivalent to only one quarter of the labor productivity in the United States.”
According to the World Bank, every employed Russian contributes only $16,100 to the country’s gross domestic product, compared with $38,100 in South Africa, $48,600 in Greece, $59,400 in France and $74,600 in the United States.
But these numbers alone do not reflect the true scope of the problem. Russia’s low productivity is exacerbated by the fact that the country is dominated by natural resource extracting with relatively little industrial development in the real sector. Although the overall productivity in Thailand ($12,500 of GDP for an employed person), Brazil ($16,700) or Malaysia ($22,900) do not differ from Russia’s in a dramatic way, in these countries’ high-tech industrial exports account for 16.2 percent, 22.4 percent and 36.7 percent of all exports, while in Russia they constitute a meager 2 percent. Thus, Russia suffers not only from a low level of productivity but also from a counterproductive economic structure, slow technological progress and outdated labor relations.
Continue reading →