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A solution was found in drastic reduction of the previously imposed requirements. The USE results in 2009 2010 can be regarded as a severe defeat, not so obvious though, of the USE concept. A total of 2.76 2.1 and 3.0 3.5% grades of 2 in Russian and mathematics school graduate in 2009 and 2010, respectively, is an evidence of a drastic reduction of the requirements to the examined rather than improved situation in the secondary education, in particular, when these figures are compared with the dynamics of those who were assigned a grade of 2 for the above mentioned subjects at the USE (under the traditional 5-point grading scale) in 20062008 (Table 14).

In addition, the rules fail to show how the secondary school diploma and USE grades are linked with the results which school graduates showed throughout the entire period of secondary education.

RUSSIAN ECONOMY IN trends and outlooks Table Secondary school graduates who were assigned a grade of 2 for USE compulsory subjects under the 5-point grading scale in 2006 2010, % a grade of 2 (under the 5-point grading scale) Subject 2006 2007 2008 2009 The Russian language 7,91 8,81 11,21 2,76 2,Mathematics 19,99 21,14 23,48 3,04 3,However, the USE should not be criticized indiscriminately. This appraising tool for secondary school graduates meets the modern development stage of higher education in the Russian Federation transition to a more accessible higher education, when nearly 70% of the age cohort enter higher institutions. However, this tool needs to be developed so than the society feel confidence in it. Too bad that many of its inherited weaknesses were detected or neglected at the USE experimental stage.

Autonomous, new state-financed and public institutions Federal Law On Autonomous Institutions (FZ No. 74) was adopted on November 3, 2006. It was recognized that introduction of a new form of incorporation would allow public and municipal educational institutions to be more independent and transparent.

However, the adoption of the Federal Law On Autonomous Institutions failed to result in any significant transition of public (municipal) educational institutions to AI. For instance, none of the federal educational institutions transited to AI in 2009. In this context, Federal Law No. 83-FZ On the Amendments to Specific Legal Acts of the Russian Federation in Connection with the Enhancement of the Legal Status of Public (Municipal) Institutions was developed and adopted in May 8, 2010.

The adoption of the new federal law created a conceptually new situation, because it allowed public and municipal educational institutions to operate as public, state-financed, and autonomous institutions, in which case new state-financed institutions became closer to autonomous ones in terms of their organizational and economic status (Table 15)1.

No effects or risks that may arise from the Federal Law No. 83-FZ in the educational system have been explored to date. At the federal level, public educational institutions may operate as state-financed and autonomous (save for special-purpose) institutions, while at the level of constituent territories of the Russian Federation and municipalities, transition of a part of educational institutions to public ones (e.g., low-numbered and ungraded rural schools will become public in many regions).

A variety of public and municipal institutions brings up a question of the criteria under which a public assignment and, consequently, budgetary funds will be distributed among the same. The answers that have been given to date it is the founder (an agency acting as the founder), knowing well its institutions, who will decide, or the public assignment will be distributed according to the quality of educational services fail to satisfy anyone. Before that, the founder distributed budgetary funds among institutions with the same status, and its main participants understood its choice given some transparency of procedures. Today, if the procedures and principles remain the same, it would be totally unclear why such a large-scale See also Tipenko N.G. Transition to the Arrangement of Provision of Services and Financial Support of Public Assignments. http://www.cmprog.org/docfiles/Tipenko_poryadok_perehoda.doc Section 5.

Social Sphere changes took place. If the procedures begin to change, it would be necessary to make clear the reasons behind such changes.

Table Basic differences between public (municipal), state-financed and autonomous institutions Public institutions State-financed institutions Autonomous institutions Status Non-profit organization Non-profit organization Non-profit organization Financing procedure Based on budget estimates As subsidies for execution of pubic As subsidies for execution of pubic (municipal) assignment (assignments) (municipal) assignment (assignments) Property To be assigned on the basis of op- To be assigned on the basis of opera- To be assigned on the basis of operational management (article 296 tional management (article 296 of the erational management (article of the Civil Code) Civil Code) of the Civil Code) Money transaction pro- Through personal accounts opened Through personal accounts opened AI in compliance with the set procedure with sub-branches of the Federal with sub-branches of the Federal cedure may open accounts in credit Treasury.

Treasury. organizations Owners liability The owner of the institutions prop- The owner shall bear subsidiary li- The owner shall bear subsidiary erty shall bear subsidiary liability ability for the liabilities assumed by liability for the liabilities assumed for the liabilities assumed by the the institution by the institution institution State procurement Under the Federal Law No. 94-FZ Under the Federal Law No. 94-FZ Not governed by the Federal Law No. 94-FZ Entitlement to establish Not entitled to establish May establish subject to approval by May establish subject to control other legal entities the founder by the Supervisory Board (participation in jointstock capital) Entitlement to obtain Not entitled to obtain loans Not entitled to obtain loans Entitled to obtain loans loans New Draft Law On Education in the Russian Federation There is another problem a new draft law On Education in the Russian Federation, which was submitted for nationwide discussion. The law must replace the Federal Law On Education of 1992 which was made patchwork by multiple amendments thereto. Experts and the general public, however, were perplexed, to say the least of it, by the original decision on developing a new law collect all of the provisions existing in the legislation on education, add all of the documents regulating educational institutions, and then somehow streamline and name all that a law. The initial version of the law could be named law materials rather than a draft law. Their trend was of concern: it was the provision of support to educational institutions rather than satisfaction of the Russian citizens needs for education that became the pivotal motive in the new draft law.

Following numerous comments, the draft law was refined and posted on the website for discussion which ended on February 1, 2011. It is obvious, that the new version was found to be much better than the previous one, but the draft law retained its general intention regulate educational institutions in the first place rather than protect interests of the Russian citizens in the field of education. In general, the draft law is still raw and indistinct: its general idea is obscured by numerous details. Unlike the Federal Law On Education of 1992, the draft law fails to give a clear signal to the general public as to which way and how education should develop in Russia.

RUSSIAN ECONOMY IN trends and outlooks 5.5. The State of the Research and Innovation Sphere Last year, the subject of innovation development formed one of the top public policy priorities. That manifested itself in the rise of new initiatives on support of university research, development of interaction between science and business, and encouragement of the latters innovation activities. The focus shifted onto huge projects, with Skolkovo being atop the list.

But from the perspective of earmarked resources, there also are other large-scale measures: a project on engaging leading researchers in forming new laboratories at Russian universities and an initiative on establishment of state-sponsored cooperation between universities and industrial corporations on hi-tech production projects.

5.5.1. The State of the Research Despite the government increasingly centering on innovation development, there were no notable changes in the research sphere. Reform of the public research sector has not kicked off, the general ageing of the cadres was still under way, while a more vigorous support of university research has so far failed to yield visible results, because the processes of its transformation have been nascent.

The state budget remained a major source of funding of research, but the share of businesses in the support of R&D rose slightly. The specific weight of spending on fundamental research was on the upsurge, which can be ascribed to growth in budget appropriations on respective activities by leading universities and research centers.

Overall, within next three years the public spending on science should be substantially lower than public expenditures on innovation development1.

(Table 16).

Table Funding of Main Socio-Economic Policy Priorities, as % of GDP Estimated Priority 2011 2012 INNOVATION DEVELOPMENT 0.91.1 0.91.1 0.91.including:

Development of fundamental and applied research 0.20.4 0.20.3 0.Source: Consolidated background reference paper to bill 433091-5 On the 2011 federal budget and the planned period of 2012 and 2013 . P.5.

In 2011, the budget spending on fundamental research should increase by 9% and the one on applied research - by 50%, with a 32% overall increase in budget appropriations compared with the 2010 figures. So, the governments sharp turn towards applied research is evident, and, from the perspective of the task to encourage innovation development in the longer run, this trend may prove an ambiguous one.

The tender-based funding of research, including projects run in tandem with businesses, forms an officially announced government priority. However, it has been consistently shrinking over the past three years. More specifically, the volume of budget allocations on imple According to the RF Ministry of Economic Developments definition, public spending on innovation development is formed by types of expenditures that help develop (create, introduce) new products, services, technologies, form competencies in priority spheres of economic development, advancement of the knowledgebased economy. Innovation expenditures comprise both direct expenditures on support of innovations and those exerting an indirect influence through private demand, intensification of motivation, and other factors. (Source:

Strategiya innovatsionnogo razvitiya Rossiyskoy Federatsii na period do 2020 goda. Proekt. M.: MER, 2010.

Wording of 31.12.2010.

Section 5.

Social Sphere mentation of federal target programs slid from Rb. 903.8 bln. in 2009 to 730.9 bln. in 20101.

Tender mechanisms and procedures became target for the academic communitys criticism, because of their opacity and problems with application of Federal Act 94-FZ2, in compliance with which it is the bid price, rather than the applicants qualifications and quality of the project, that forms a main projects assessment criterion.

The other kind of tender-based funding is formed by grants awarded by public research foundations. It de facto appears stagnant, as originally cash-strapped, such foundations see their public funding contract. In 2011, their budget should increase by meager 5.7%, while it should have increased at the same rate as the overall appropriations on civil research - that is, by 32%. According to the budget plan for 2011-2013, the Russian Foundation for Fundamental Research should receive Rb. 6.0, 4.3 and 4.3 bln., respectively. For reference: MSU and SPSU should receive far greater volumes of funds on research: MSU Rb. 10.6 bln. in 2011, 10.7 bln. in 2012 and 9.9 bln. in 2013, while SPSU 5.4 bln., 8 bln. and 8 bln, respectively3.

Notwithstanding the above challenges, the financial standing of the research sector has lately relatively stabilized. This, however, is not true, as far as the state of research cadres is concerned. They have constantly decayed. The outflow of the cadres engaged in R&D activities was on the upsurge, while all their structural indicators were aggravating. More specifically, the researchers average age was on the rise, as was the bust bay of the middle-aged (35-55 years) researchers; the young practice a quick call on science, while auxiliary and technical personnel are washed away at a rate greater than researchers.

A critical aspect of the research complexs functioning also is the state of its material and equipment base. A poor material provision of research affects the state of its human capacity and effectiveness of research activities. Quantitative characteristics of the material base of research in value equivalent collected by the official statistics fail to provide an adequate idea of its state, so much for problems associated with renewal of the equipment stock and its use by research organizations and universities.

The year of 2010 saw completion of the inventory check of unique scientific equipment placed with research organizations and universities of the public sector for science. The data collected across nearly 400 objects of the research infrastructure allow a series of qualitative conclusions. The main finding is that the material base of research is basically obsolete; a radical renewal of equipment takes place chiefly at individual universities, while the average equipment effectiveness rate is fairly low. Meanwhile, academic institutions tend to use equipment more efficiently than universities and other scientific organizations.

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