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The same duties that are effective for all the rest of the countries spread on goods (sugar, spirit and tobacco) imported from the Ukraine. In addition, duties are prolonged for Ukrainian fittings. The Ukrainians always insisted that all the withdrawals were canceled within CES. But now withdrawals from the free trade regime will fully depend on the terms on which our countries will join WTO.

The terms on which the Ukraine and Russia are going to join WTO seriously differ. Several years ago Russia tried to synchronize with Ukraine the process entry the World Trade Organization. However, after the new team came to power, which announced the course on integration with the West, it became clear that those attempts were self-defeating. In Spring this year the ukrainian government brought in the Verkhovna Rada of Ukraine a parcel from 14 bills, which opened many of the markets.

despite numerous discords, practically all the bills except for the three, were adopted. In particular, the Ukraine canceled export duties for the scrap of ferrous and non-ferrous metals, import ones for meat and crow, and permitted foreign banks to open branch offices. All those issues is a subject matter of the talks about Russia WTO accession, Russian position is in that not to open those markets. And Russia and the Ukraine plan to enter WTO until the end of the year or in the second half of 2006.

Nonetheless, Russia, Byelorussia and Kazakhstan are going to fully standardize their customs tariffs until the end of 2006. final unification of the tariff rates will simplify running of trade and will decrease producer's costs. However, such a union has almost been created between Russia, Byelorussia and Kazakhstan, but within the framework of Eurasian economic community. According to the latest data, the common customs tariff of those countries covers over 60% of commodity nomenclature: out of 11 thou. line items the rates of import customs duties are agreed upon for almost 7 thou. of goods.

In parallel with that the Ukraine one of the basic elements of quadruple union, so, CES will not be full-fledged without it. The main objective of forming CES was a drive to attract the Ukraine to integration. However, there is no point to hope that Kiev will join soon the Customs Union. If the Ukraine standardizes tariffs, it may not be allowed to entered the European Union, where she so aspires to.

N. Volovik Dynamics of the output and productivity in the RF regions The report presents the results of computations on decomposition of the output growth in industry by regions in 1991-2003.

Decomposition of the economic growth by factors in the economy as a whole and in sectors, studied in IET, testifies that during the transitional period the output dynamics in industry was determined predominantly by the existing capacity utilization and intensity of labor employment. alongside with that, the balance that cannot be explained by the dynamics of production factors, which most often is interpreted as total factor productivity (TFP), made about 20-50% of the output growth in industry.

With regard to GDP, the economic growth unexplained by major factors (labor and capital) amounted the greater value about 30-70%.

Similar computations were also made at a regional level. Their difference from general economic and sectoral computations, is expressed in less details and more rough measuring of growth factors, which can be explained by insufficiency of the regional statistical base provided by the Federal State Statistic Service. Thus, as a measure of factor costs were used an index of actual volume of fixed assets, computated on the basis of the information on investments, and actual number of employed.

Alongside with that, some results deserve attention. Decomposition was carried out for growth of gross regional product (GRP) and the physical volume of industrial output.

For the majority of federal okrugs the dynamics of output index (GRP) is similar to the dynamics of GDP index for Russia as a whole. In 1997-1998 the reduction of indices is observed (largest decline is observed in Siberian federal okrug, fall in the output of which in 1998, compared with 1996, makes - 12,5%) and change in the trend in 1998-1999 (starting from 1999 the output was constantly growing in all federal okrugs). In parallel with that, in the Central federal okrug the output remained higher than the level of 1996 during the whole period in question. In Privolzhsky, North-Western and South federal okrugs the level of 1996 after the decline was already achieved even in 1999, in Uralsky okrug in 2000, while in the Far Eastern and Siberian ones only in 2001.

In the dynamics of regional indices we can single out the two stages: downfall and growing of growth. In a number of regions changing of trend happened before 1999. thus, in Astrakhan and Oryol regions the growth of output is observed in the course of the whole period under consideration - 19972002: in Kabardino-Balkarian Republic, Republic of North Ossetia-Alania, and Tver the output growth began even in 1998. On the other hand, in Bryans, Magadan, Tulsa region, KarachaiCircassian Republic, Republic of Altai, Ingushetia, Kalmykia, Komi, Sakha and Khakassia the change of periods occurred in 2000 (Fig.1).

In Belgorod, Moscow, Murmansk, Perm and Tambov regions, Moscow-city and Republic of Mordovia, despite decrease in output in 1998, its value was not lower than the level of 1996 during the whole period in question. While in Jewish Autonomous Region, Irkutsk, Kamchatka and Magadan regions, Republics of Adygeya, Mariy-El and Khakassia the level of 1996 output was not achieved to 2002.

See in greater detail Growth Factors in Russian Regions, IET-CEPRA, 2005.

The more precise estimation of services provided by major factors of production, presumes accounts capacity utilization and in practice abandoned time occupied at a minimum.

GRP index is computated on the basis of the index of physical volume of GRP provided by the Federal State Statistic Service.

1996 . 1997 . 1998 . 1999 . Fig. 1. Histogram of the Moment of Change of Trend in the Dynamics of the Regions Output.

Graphically we may present regional differentiation of changing the output volumes with the aid of sun-rise-charts. As is seen from Figs. 2 and 3, the growth of GDP in the federal okrugs during 19972002 may be considered a relatively more uniform than in regions. This can be explained by the fact that in all the federal okrugs we can observe positive growth rates during the whole period in question.

While among regions there exist subjects with negative growth rates (the Republic of Adygeya, Khakassia, Mariy-El, Ingushetia, Jewish Autonomous Region, Irkutsk, Kamchatka and Magadan regions). Reduction of GRP of these regions (that provided in the initial period (1996) about 3,9% of GDP) made - 1,7% of the total growth of GDP.

Unexplained growth percentage of GRP of regions in the period in question (1997-2002) makes rather a big value. In the first considered sub period (1997-1998) we can explain on average about 3050% of growth. Worst of all with the use of factors dynamics can be explained the growth in the period from 1999 to 2002, where their input is close to zero and has rather a wide scatter by regions. In other words, in this period the growth is largely determined by factors not considered in decomposition of growth. Among them: intensity of use of capacities and actual average length of the working day, short- and medium-term changes of price dynamics. The intensity of use of resources is not checked in the model due to absence of relevant statistical information by regions. Changes of price dynamics may have most strong impact on the dynamics of cost indicators without changing physical values in the short- and medium-term period.

Decomposition of growth of cost indicators, which is GRP, by regions gives rough and often contradictory (in the use of varying methods) estimations of productivity gain. Note that in interpreta A particular case of Lorentz curve. Definition Sun-rise- chart is used in Harbergers paper (Harberger, 1998) foran analysis of irregularity of lowering the real cost reduction of production in industries. The charts are constructed as follows. On horizontal axis (in our case) it is presented the regional structure of the accrued GDP.

Regions are ranked according to their growth rates descending, so that the first is the region with the largest growth rates, and the last the least. On the vertical axis the growth rates of relevant regions are laid over. The more convex is the curve that unites the points, the more irregular is growth in regions. Accordingly, the regular growth will be presented by a straight line.

It is apparent that the causes for such a low percentage of the explained growth, particularly on the sub period after 1998 and over the whole period in question is, on the one hand, in the low quality of statistical information, on which basis estimations are made; on the other in hard suppositions of the model, which may fail for Russian transitional economy. The most strong supposition, apparently, is an assumption about the equality of price factors to their marginal products and fulfillment of the condition of a long-period equilibrium, which is doubtful in the case of Russia. Indeed, as was shown in the papers of Khsu for the developing countries that supposition of the cost indicators across Russia (GDP, gross value added branches), in decomposition of growth rather a large unexplained balance (about 70%) was also observed. The IET paper (2003) shows also that decomposition of growth on the basis of actual indicators gives lesser remainder in the breakdown even in conditions of the use of aggregated expenses. In contrast to physical quantities, price indicators are more volatile and depend on rapidly changing price dynamics. An illustrative example is oil prices and profits from the oil sector. Profits may be changed by an order in the constant actual volume of production.

Unfortunately, employment of physical volume indicators is impossible at the level of countrys economy or region as a whole. The indices of actual volumes may be computated (rather accurately) only for some industries that produce homogeneous products, which quality is constant in time. An approximation to such index may be an index of actual volume of industrial production (Index of industrial production).

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Fig. 6. Dynamics of Industrial Production Index in the RF Regions in 1990-2003 (1990 =100) It is seen that the turning point of downtrend in the industrial production occurred, on average in Russia, in 1998. In a number of regions the trend turning point occurred in 1995, in the others in 2000. However, fall in the beginning and growth in the end of the period in question is observed in all regions. It is to be noted also that the level of output of 1990 was reached and exceeded only in five regions (Arkhangelsk, Belgorod, Leningrad, and Tomsk regions, and Nenets Autonomous Area) in 2003. On average in Russia, the volume of output made less than 70% of the volume of 1990.

More optimistic is dynamics of the performance rating (labor intensity of industrial production output to the number of employed in the industry ratio) in regions (see Fig. 7).

tion is, apparently, stronger than for the developed countries, which manifests itself in distinction of estimations of the direct and dual methods of growth decomposition.

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Fig. 7. Dynamics of Labor Productivity Index in Industry by RF Regions in 1990-2003 (1990 = 100).

As computations show, change in the trend of labor productivity in industry from fall to growth occurred, on average, in 1994, which is on average by four years earlier than changing of the output trend. In a number of regions labor productivity had a positive trend during the whole period in question.

An important result is the fact the labor productivity in industry exceeded the level of 1990 in most part of regions. On the one hand, the growth of labor productivity (labor intensity of production) at a regional level may be caused by growth of efficiency of production, on the other by changing the structure of industrial output. The growth of efficiency may be caused by more efficient organization of production, involving in the production of more productive capital, by economies of scale. If dynamics is determined by changing of the output structure, then the signs are becoming clear that most labor intensive productions are displaced by those that require less employment of labor.

The obtained results of productivity trends are in accord with the computations at a level of branches and the economy as a whole (IET, 2003). The productivity growth trend appeared much earlier than the growth of output, which points out to the predictive properties of labor productivity index in the same way, as in the case with TFP (total factor productivity).

E.Astafieva, O.Lugovoi Socio-Economic Outcome of the Reform of Manning System of the Military Organization of the Russian Federation The present publication continues representation of the results of mathematical modeling of processes taking place in Russia in transition to the new manning system of its military organization. But if in previous publication of IET (May 2005) the focus was on military-economic consequence for the State of such a transition, and concerned evaluations of combat effectiveness of the army and federal budget expenditures, this time it debates about the economic outcome for the society which, as is known, sends part of its citizens for the military service. Conclusions are substantiated that in terms of economics, the earlier decisions of the Russian Federation Government are positive for the society, but in a slight degree. Alongside with that, there is still considerable and not yet used possibilities to make the military reform attractive for both the society and citizens.

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