Russian Foreign Policy

The conclusion is that for large countries, which include Russia, the national competitiveness includes the country's ability to maintain their subjectivity in the context of globalization. For Russia this means the need to remain one of the world's centers of development, one of the great powers of the world leaders in twenty-first century. This seems to make sense and it is assigned as the task of Russian political leadership - to bring Russia into a the number of these world leaders. However, solving of this problem requires serious measures that would ensure preservation of Russia "core self" - a set of machine-building industries, capable of a modern technological basis to reproduce themselves and play the other branches of engineering, is not involved in self-development, especially for the defense industry, the growth of human capital - the quality and quantity, and strengthening social cohesion, foreign support for the position of world leader (open and hidden).

The main thing is that this problem requires policy makers, with the horizon of vision that goes beyond the election period. Competitiveness is a complex phenomenon, for the understanding of which the standard univariate approach s not applicable. It is necessary to create a competitive advantage of a high level. At the same time an abundance of traditional factors of production is not a sufficient condition for long-term success, only the constant innovation and increasing productivity are critical conditions of the country's competitiveness. The competitiveness of goods and services is understood as the ability to sell them at market prices with a normal profit. External competitiveness is mainly supported by the Russian oil, gas and metals.

Most of its finished products, except weapons, are not competitive on world markets. With the products available the position of Russia holds partly in the CIS markets. Exports of services does not match the scale of the economy. As for the internal competitiveness, what was preserved to date in the domestic economy produces goods that are competitive in the domestic market. Adapting to the market conditions has occurred at a high price. But the prospects in general are not very optimistic it is impossible to accept the the current state. Vigorous efforts are needed in order to make a difference. Russia is one of the richest countries in the world on natural resources. Thanks to them this state now has an excellent balance of trade and can offer competitive commodity and energy prices on the world market. And this is meant for the long term: the high share of exports of such kind of goods would be characteristic for Russia forever. But in this situation has its drawbacks: the dependence on the situation of unstable world markets and, more importantly, the weakening of incentives for the development of innovative economy, the structural and institutional changes that are important to maintain a high level of adaptability and the development of the country's citizens.

Regarding the workforce and human capital Russia is in a relatively favorable position: it posses the high level of education combined with staff being unpretentious regarding pay level and working conditions. But at the same time there are usually claims to the discipline and rigor in execution of work. The demographic crisis will eventually increase the shortage of labor which would require the involvement of migrants. Free labor would not be available, competitiveness on the labor market should deteriorate. This means that large-scale investment projects aimed at increasing production, will experience difficulties with staffing or will introduce them in other sectors. Russia is doomed to rely on increased productivity and efficiency. Capital usually goes to the sectors which are considered attractive - oil, gas, trade, real estate, and even then subject to the availability of suitable borrowers or recipients of investment, credible, and those who are inclined to cooperate. In order to diversify it is necessary to investment in other sectors which are non-competitive and risky today, which often have to deal with non-cooperative behavior with people who are not ready to exchange controls on investment. Market mechanisms of capital overflow, which are virtually absent in Russia are in these cases prove themselves to be ineffective. The paradox is that the country needs large investments to upgrade but now is not able to accept and apply them in best possible way. In contrast to the recent past, when there has been a lack of financial resources, currently are growing risks of inefficient and insecure investments, pushed by the pressure of liquidity including the influx of petrodollars. At the same time, Russia today possesses basically just "short" money. "Long" money needed for large-scale long-term projects, including infrastructure, are not yet available and the national institutes of savings such as pension funds, insurance companies, etc. are just being formed. Capital formation in them will take at least ten years. It takes time for the development of financial intermediaries and to inculcate the culture of massive medium-sized investments to the public. The lack of a "long" money makes the large-scale foreign investment an appropriate involvement in the modernization of industry therefore providing them with a competitive investment climate. An increase in the use of these resources, including the capital itself, as happened in the past, will not provide the rapid growth and competitiveness. The main competitive advantages of the Russian economy are, in addition to natural resources and sufficiently educated and skilled labor force, the accumulated scientific and technical capacity, transport capacity, transit capacity, relatively large domestic market. However, the existing competitive advantage has not only failed to develop, but also degraded as a direct consequence of the destruction of the old economic system and the incomplete transition to a new one. And yet expert assessments of Russian competitiveness are overly pessimistic, and reflect to a large degree only personal views of experts. The country has a set of economic, social and political factors, reflecting the accumulated competitive potential, its material and intellectual wealth, and therefore Russia should define a strategy for enhancing competitiveness and to develop a mechanism for its implementation. In order to improve the competitiveness Russia should move to a new economic policy, a new economic program of modernization of the economy the core of which would be an innovative strategy and computerization. It is also important to reduce production costs, improve product quality, increase investment in high-tech sector of the economy and in science. Moreover, the competitiveness ranking is a not only an economic problem but also a branding one. Russia needs to develop its own strategy for inclusion in the global economic system that would cover a range of macroeconomic stabilization and structural adjustment. It is necessary to maximize the global experience of economic reforms aimed at creating an effective competitive economies which would be included in the global economic system. Indispensable prerequisite for an effective foreign economic activity in the country are creating of favorable business environment, ensuring the growth of purchasing power as a necessary factor in reviving the production and consumption. The degree of external openness of the Russian economy should be based on the assessment of readiness of its main sectors of the productive capacity to compete in the global and domestic markets. This involves carefully tuned interrelated combination of course on the liberalization of foreign trade activity with selective protectionist measures. Political and economic problems of the country at present are the development of external economic relations in such a way that they contribute to economic growth, greater integration into the world economy and efficiency and competitiveness of Russia in the world. In general, the limits of openness of the national economy in the process of integration into the international community lies in the sphere of protection of national interests and must have certain limits. In the context of globalization, Russia needs a new quality of strategic management and planning at the macro, meso and micro levels ensuring the creation of a modern financial and banking system, the institutions of a market economy corporate governance arrangements, which create favorable conditions for improving the competitiveness of domestic producers in both domestic and in foreign markets. Today there is a need to develop and implement the strategy of "rapid development" of the Russian economy. Currently it represents a symbiosis of different technological structures and the changes in dynamics of scientific and technological potential of the country would depend on ability of Russia to initiate economic growth, to implement a forced upgrade in order to ensure near-term competitiveness of the economy.

In an open economy, the imperative of its strategic stability is the presence of a competitive structural core - a group of technology-related industries, focused on domestic demand and exports. Moreover, reliance on domestic sources of growth strengthens the requirements for competitiveness: the expansion of domestic demand involves strengthening of the national currency, which, with all other things being equal, affects the competitive position of producers. Such a stable model of economic development can be defined as "a model of accelerated development," capable of ensuring the political image and competitiveness of the state in international relations. The implementation of the requirements of this model means that in the next decade it would be necessary to combine the growth of consumption (which depends on the expansion of domestic demand), with a large-scale modernization of production and technical staff, which requires a sharp, approximately double, increase in investment flows for compensation of depreciation of outdated production facilities and updating of infrastructure.

The unfolding situation requires a breakthrough investment, which is a key link in the modernization strategy aimed at forming strategic sustainable economy that would increase its competitiveness in the global arena. Estimation of the overall competitive potential of Russia suggests that it has a major economic factors of competitiveness, as the long-term (industrial, scientific, technical, labor and natural potentials) and short (opportunistic) type (the situation with the exchange rate) for the implementation of the proposed concept of "advanced development" based on the inclusion of countries in the international division of labor based on the priority development of its existing competitive advantages of a high order. The combination of the existing production and scientific-technical potential of highly skilled and relatively cheap labor force the colossal in its scale and diversity natural resource base, in the aggregate represent a unique competitive advantage. Thus, all prerequisites for the modernization breakthrough and ensuring a competitive edge to Russia are available at the moment. Russia's population in general is characterized by relatively high levels of education and culture. Among the employees is high proportion of skilled workers and professionals. In other words, Russia is a developed country on the industrial and post-industrial stage of development, elements of which have ripened in the depths of the military-industrial complex of the former Soviet Union. Russia's productive forces are qualitatively different from the productive forces of the Third World and, conversely, not fundamentally different from those that are in the West. In Russia, the same type of skills, the same class of machines.

The problem is that Russia has long been dominated (though most of the historically conditioned) by a different mentality, a culture of labor relations, other industrial relations and other social organization and these factors interfere with the goal of reaching productivity level of the west. To catch up with the U.S., Germany, France, in per capita GDP would require probably decades. But as for countries such as Spain, Ireland, Greece, Portugal, Chile, that is, countries that are essentially at the same stage of development of productive forces as Russia, their GDP per capita (respectively - the level and quality of life) in case of successful structural economic reform (and they have not yet begun) can be achieved in the foreseeable future, perhaps by 2020.

This should be a sensible, realistic economic outlook in Russia for the next 10-12 years. All this allows to characterize Russia as a great power, which is undergoing large-scale temporary economic difficulties caused by changes in the economic, geopolitical and geo-economic situation and the transition to a new type of social development. Preservation and rational use of available internal resources provides the potential for early recovery and transition to a model of innovative (post industrial) development. In general, positive changes in the world provides opportunities for solving this problem. If and when Russia would adopt new social relations, finally improve the labor moral in the perspective of the absolute size of the production it will be well able to once again achieve the highest international standards, or even surpass them. Then Russia will be attractive to its neighbors, which can stimulate the integration processes in the former Soviet Union. If we assume that there would formed an economic community of the largest among the newly independent states around Russia, it opens the possibility to recovery of the economic potential of the class which the Soviet Union has had. If it will not happen soon or not happen at all, the situation should not be overly dramatized. Loss of the status of "superpower" does not deprive the country of opportunities for social progress and prosperity, in fact, may stimulate the growth of these opportunities. The collapse of the Soviet Union, as emphasized by President Putin, was certainly, "the greatest geopolitical catastrophe of the twentieth century." First, the exhaustion catastrophe during which the civilized community had worked out its potential and civilizational fate occurs or the death of civilization. Secondly, there is a shift catastrophe during which the mechanisms of society influence on the elite and nomination of minority control by society become ineffective. And thirdly, catastrophe of inversion in which there is degeneration of the control systems with preserving the national identity. The collapse of the USSR it's a shift catastrophe to some extent and the inversion one to another. But it is the exhaustion type. So it's a disaster which is recoverable. Now Russia has all the facilities to ensure not only the survival of the Motherland, national security, social development, but also the dignity of the individual and his fundamental rights and freedoms, a well-being for an individual and his family. For one thing is the struggle for world domination, which was fought between the Soviet Union and the United States and demanded enormous expenditures and another thing is provision of its national security and development, which requires from Russia much lower cost and effort, but that determines its very physical existence.

The idea of global expansion in the geopolitical and territorial aspects is depleted to the bottom by the Russian people. Thus, the question of whether or not Russia should claim the great power, should be answered - yes, it should. But it should not be the role of a superpower, competing on an equal footing with the United States (with the end of the Cold War, this concept is indeed a thing of the past), but rather, as an equal partner among the "top five" world's leading powers, which corresponds with the task appointed by V. Putin and Dmitry Medvedev. It is an objective process which is natural for Russia it is simply impossible to ignore that. It necessary to be aware of the great difficulty of solving this problem as well as new risks, challenges and threats that Russia would face on its way and fierce competition with other power centers of the modern world. It is also clear that without a strong and friendly Russia West would be unable to create a stable and predictable world order of the next century.

If Russia would be mindlessly repelled into the camp of marginals, the entire international system will hangs in the air, deprived of a solid support. Reliance of Washington on its military force will not work (and no longer works, as shown by events in Iraq). The weakening of Russia will inevitably lead to a sharp deterioration of the military-political situation in the CIS countries, Baltic countries, Eastern Europe, Central Asia, the Middle East, and as a consequence, in Western Europe and around the world. It will then become a real threat of total geopolitical instability in Eurasia. A weak Russia is the subject of the expansion of Islamic fundamentalism, the booming China and some short-sighted representatives of Western countries. Those who are now seeking to destroy the Eurasian geostrategic monolith and relegate Russia to the status of third-rate power in Europe and Asia are leading most dangerous game.

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