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Parlamentskaya Gazeta
No. 151
August 2002
[translation from RIA Novosti for personal use only]
PUTIN'S FORMULA AND THE SURVIVAL OF RUSSIA
Acad. Nikolai SHILO, Russian Academy of Sciences
"In the next few years, sustainable development of the Russian economy should be based on a plan-based growth, primarily at the expense of the mineral-resource potential. Meanwhile, with reference to mineral raw material resources, sustainable development means ensuring the country's guaranteed economic security through the creation of a reliable mineral raw materials base for meeting Russia's current and future requirements, with due account taken of ecological, social, demographic and other factors."
This formula proposed years ago by the future Russian president Vladimir Putin (see the Mining Institute's Notes, St. Petersburg, 1999) brings into focus a certain pragmatic approach to the problem of Russia's survival.
With our desire to live better being combined with laxity and inability to concentrate the nation's efforts on new guidelines for reforming the national economic complex, Russia will continue living at the expense of its mineral-resource potential for decades to come. A larger portion of these resources going to countries with better technologies and labour organisation will serve as the main source of currency earnings (foodstuffs, technologies, plants).
This is exactly what has happened, and there's no getting away from this. I assert that, contrary to the claims made by some critics, the USSR's economy of the past 70 years was not spendaway or inefficient. All those years, A group industries (production of the means of production) were rapidly developing, albeit not always rationally.
Today's Russia is in a disastrous situation. Mineral raw materials and metals account for more than a half of Russia's total exports, and articles thereof - for less than 3 percent. It is clear that the main revenue sources are profits from the sale of raw materials and semi-finished products. This means that proven reserves of mineral raw materials are being mercilessly exploited, and the total potential value of proven reserves (estimated at 28,560 billion dollars) may be "eaten up" over the next 20 years.
Naturally, Russia, which is striving to develop its national industry according to a new vector, is facing a top-priority task now - to replenish accessible sources of raw materials, including through the restoration of millions of hectares of burnt forests, mineral wealth prospecting within rationally accessible limits, and the recultivation of once fertile lands. Usually, from 10 to 12 years passes from geological prospecting operations for most mineral raw materials to the start of commercial development of the deposits. Therefore, we must shorten the lead time in this case.
Meanwhile, over the years of reforms the geological service has lost more than half of its production facilities and skilled personnel. Being a geologist is no longer prestigious. The 2002 budget cut federal spending for the reproduction of the mineral raw materials base by nearly a half, as compared to the far from good year of 2000.
As a result, an increase in reserves dropped by 3 times as regards oil, 5 times - as regards gas, 12 times - coal, 19 times - copper, and more than 25 times - tin. The reproduction of the mineral raw materials base on non-ferrous, alloying and noble metals is at the level of 30-40 percent now. Meanwhile, investors are interested only in major projects promising high and quick dividends. However, the deposits near major enterprises have been partially exhausted by now. New ones should be searched for in little developed areas, on the basis of well-grounded scientific forecasts. Investors will not busy themselves with this task. This is a matter for the state and the budget.
However hard the country's situation is today, we should not forget about a search for new profitable mineral raw material deposits. This is that very coefficient to the formula proposed by Vladimir Putin, Cand.Sc. (Economics), which will help us to resolve the problem we are facing today, not just the task the Russian president is confronted with.
The conversation was recorded by Anatoly MOSTOVOI.
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