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RUSSIAN ECONOMY IN trends and outlooks in particular between the USA as a focus of spending and consumption, and China as a focus of money saving and production. The term Chimerica (China + America) suggested in by N. Ferguson1 has become a symbol of the issue of global misbalances. As a result, the process of modern globalization produced a regime that is opposite to the model typical of the turn of the 20th century: if a century ago capital was moving from the center (the developed countries) towards the periphery (the then emerging markets), now it is the developing markets that have become the savings centers, and the USA and other developed countries are predominantly the consumers of commodities manufactured in the developing countries.

The category of structural misbalances also includes the growing controversies between short-term and long-term interests of companies that manifest themselves in a conflict between capitalization and production growth. In recent decades the attention of shareholders and managers alike was focused in the main on a companys capitalization, which was viewed as the principal indicator of its commercial success. The possibility to easily get rid of stocks (much easier, in fact, that in the times prior to the information revolution) is yet another argument in favor of rapid capitalization growth a goal that may be quite contrary to the goal of ensuring a companys long-term stability. Consequently, that criterion becomes the main one when estimating management efficiency and elaborating a corporate bonus policy.

Meanwhile, the goal of maximum capitalization comes into conflict with the real foundation of socio-economic progress growth of labor productivity. It is, of course, linked to capitalization growth, but only in the final analysis. However, shareholders must receive annual reports, and attractive annual reports and current capitalization growth are produced by factors other than those that ensure productivity growth. Nice reports require mergers and takeovers, because asset growth is conducive to capitalization growth. Naturally, it is not advisable to shut down outdated enterprises, because this will result in a lower capitalization level in a current period. As a result, many big industrial corporations continue to keep old inefficient production entities going.

A systemic crisis always implies the emergence of a new regulation model, including a basically altered economic role of the State. The Great Depression of the 1930s led to a dramatic expansion of state interference in the economy; the crisis of the 1970s produced deregulation.

At the onset of the current crisis, the theme of an inevitable departure from economic liberalism and a return of Big Government actively interfering in societys economic life once again gained popularity. However, there also occurred a rapid realization of the fact that that crisis could be equally explained both by market failures (excessive deregulation) and by government failures its ineptitude in ensuring stability of economic growth. Gradually, it was becoming clear that government regulation was indeed necessary, but primarily in the sphere of financial markets. In fact, it was the financial sector that had first introduced those institutional innovations that initially produced an unprecedentedly high rate of economic growth that later gave way to an unprecedented crisis. It is a financial crisis (encompassing both the private and public sectors) that generated the current economic problems, and the governments task is to make it a priority to overcome that crisis.

Another specific feature of the new regulation model is that it must necessarily be created as a supranational if not a global one. There is no sense in carrying on regulation on a national level alone in the presence of modern information and communications technologies.

However, it is very difficult to create supranational regulatory institutions. There exist as yet Ferguson N. The Ascent of Money: A Financial History of the World. L.: Allen Lane, 2008.

Section Socio-political Context no mechanisms for ensuring their functioning, including universal decision-making mechanisms.

When developing a modern regulation model, one must give consideration to the qualitatively new global economic process that sometimes is called financialization1. There exist several types of markets (and exchanges) in the world: the monetary market (the stock market), the currency market, the commodities market. Until recently, they functioned quite independently of one another, were developing under different laws, and were operated by different agents (specializing in a given type of markets). Now we are witnessing the processes of their coming together: the markets have begun to influence one another, and capital is flowing between them. As a result, the logic of pricing the relevant products is undergoing a certain transformation. On the one hand, this seriously hinders the analysis and forecasting of further development of the situations on these markets and throughout the entire world economy. On the other hand, economic agents have obtained some new instruments for their functioning, including for hedging risks. From the point of view of the specific issues of the Russian economys development, especially interesting is the transformation of oil from a typical product traded on a commodities exchange, whose price is determined by the demand/supply ratio, into a financial market instrument, whose price is influenced by speculators in oil futures, and through that mechanism also by currency speculators. This significantly increases the degree of uncertainty with regard to the price of oil as one of the most important factors applied in forecasting the prospects of the Russian economy.

The current global crisis is evolving against the backdrop of a demographic crisis that has spread to a greater part of the developed world and also to some developing countries. That crisis, in its turn, has given rise to two sets of problems, which must be solved in order to launch a trajectory of stable development. On the one hand, there is the issue of the mechanisms of economic growth, because until now such growth has always implied an increase in population. On the other hand, developed countries, having succeeded in ensuring a high level of social welfare, are now faced with increasingly grave budgetary problems. The social welfare load per worker was constantly increasing throughout the entire 20th century, and in the situation of a demographic crisis this pressure become fraught with very high danger for financial stability and consequently, for growth. In 2011, European countries became acutely aware of this circumstance; for them, the exit from the macroeconomic crisis will mean a significant restructuring of their budgetary obligations. Russia will be faced with similar problems not only in the event of a substantial decline in oil prices, but even if these prices remain at a stable level.

This situation has pushed to the fore the task of restructuring all the branches of the social welfare sphere first of all the educational, public health care, and pension systems. Here we mean specifically structural reforms and the elaboration of new models for the functioning of these sectors, and not only the necessity to save budget resources. It should be emphasized that a financial crisis is a reflection and manifestation of a structural crisis. It can be overcome through in-depth reforming of the relevant sectors and bringing them in conformity with the new technological base and new social structure of postindustrial society.

This term was used by UNCTAD in its Trade and Commodity Report (2009), which contains a chapter entitled The Financialization of Commodity Markets. Also see Gaidar Ye. Golovokruzhenie ot uspekhov. [Dizzy from Success.] // Ekonomicheskaia politika [The Economic Policy]. 2008. No 3.

RUSSIAN ECONOMY IN trends and outlooks It will be even more difficult to find solutions to the most pressing social problems because a prominent feature of the current crisis is that the leading developed countries have reached critical levels of sovereign debt. In part this is the result of the irresponsible financial policies of the previous decade, and in part the consequence of the anti-crisis struggle that involved some measures designed to create budget incentives. The undermined trust in the financial situations and policies of the leading countries, a drop in the credit rating of the USA that has hit its 50-year low, the decline or threat of decline in the credit ratings of the world leaders and their global banks have all been pointing to a profound crisis of confidence in the existing economic and financial institutions. The key to exiting from the global crisis in the foreseeable future will be reestablished confidence.

And finally, the current crisis has some political consequences, although so far these have not yet acquired a more or less radical character. The events of 2010 2011 have made it possible to define some of these repercussions.

First, there has occurred a general shift to the right in the political mood of a number of important countries: center-right parties have won parliamentary elections in Germany, the UK, Poland, Spain and Portugal. The Republicans have significantly strengthened their representation in the US Congress.

Second, Europe has embarked on an experiment of sorts designed to find an optimal anticrisis political anti-crisis model somewhere between a technocratic government that lacks a voters mandate (Italy, Greece) and a party government winning an election (the new centerright governments in Spain and Portugal).

Third, there is the deepening conflict within the US political elite that has already triggered a downgrade of the USAs sovereign rating, previously deemed to be impregnable. The choice of an economic model (between raising taxes and cutting budget expenditure) in that country has turned to be a purely political problem whose acuteness is further enhanced by the approaching presidential election of 2012. In such a situation, it is only natural that no simultaneous movement in two directions in order to reduce budget deficit becomes possible.

Fourth, numerous large-scale protest actions have taken place mainly in developed countries. So far, however, such mass protests have had no significant impact of the formation of the governments economic and political courses. In any event, in spite of their openly leftist (and sometimes extreme left) slogans, it was the right parties that won last years elections.

1.1.3. Russias Economic Policy: the End of the Old Model So far the crisis has had only a limited influence on the situation in Russia. Naturally, the rate of economic growth became slower, thus making it impossible to set the goal of doubling this countrys GDP over the next decade. However, the doubling of Russias GDP is by no means a task of critical importance. It is much more important to ensure the realization of progressive structural shifts that can serve as a foundation for the modernization of the Russian economy and policies, including the goal of making this country less dependent on the fluctuations of the world economic situation. That is why the global crisis has revived discussions on the possible ways of Russias modernization. In late 2010 early 2011 Vladimir Putin set for the experts community the task of elaborating the possible scenarios and this countrys development strategy until 2020.

Strictly speaking, there exist two sets of causes that have put to the fore the need to elaborate a new strategy. First, there are the consequences of the global crisis which, as noted earlier, has made it necessary to rethink the current socio-economic policy. You never want to Section Socio-political Context see a serious crisis go to waste, said White House Chief of Staff Rahm Emanuel, and these words very accurately describe the goals that the governments of developed countries are now faced with.

Secondly, there also exist some specifically Russian causes for the renewal of the economic course. Last decades economic policy model was shaped by the powerful intellectual, political, and even psychological impacts of the post-Communist transformation of 1991 1999 in general, and the 1998 financial crisis in particular.

The Economic Policy of 19992009: The Demand Economy The principal features of the economic policy model applied over the pre-crisis decade are as follows:

- to ensure political and social stability as a sine qua non condition;

- to gradually increase the role of the State as the source of that stability. This role has become manifest in at least three forms: state property growth; growth of budget revenues and expenditures (in absolute terms and as a share of GDP); compensation for the insufficient trust in financial institutions through developing state financial structures (which was typical of the countries involved in catching-up industrialization);

- to maintain a well-balanced budget against the backdrop of increasing budget revenues and expenditures. However, this situation is unstable in face of a large-scale budget expansion. Any interruption (or even a significant slowdown) in revenue growth will result in a budget deficit;

- to implement a policy aimed at moderating the process of the currency exchange rates strengthening alongside a high inflation rate and high interest rates. This was viewed as a source of incentives for domestic producers;

- to grant broad access of state, quasi-private and private companies to the international capital market. The high credit value inside the country was counterbalanced by the possibility to borrow on the world market;

- to make the government a major source of demand in the national economy. First of all, this helped to maintain demand on the part of the medium-income and poor strata of the population that depended on the state budget: pensioners, unemployed, government employees and the military, as well as the employees of state corporations attached to them.

A prominent role was played by the funding allocated to the power structures both for the upkeep of the military and arms purchases. It was further enhanced by the evolution of the global crisis in 20082010;

- to limit government investments in infrastructure. Being aware of the high corruption level in that sector, the government was very prudent in its policy with regard to it in contrast to social expenditures;

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