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MAIN DIRECTIONS OF ECONOMIC DEVELOPMENT IN THE 21ST CENTURY




A new program for the economic development of Russia based on the management of socio-economic safety


1. Introduction.

Many publications are proving the unsatisfactory economic situation. The concept of economic development, based on endless economic growth, causes great doubts. There are problems in economic management theory also. Management is performed, mainly, by "unwritten but well-known code of behaviour" and "give more money" principles, which inevitably leads to corruption. We need a new worldview and a new mathematical apparatus.

Groups of famous scientists and specialists are working for the President and elaboratong the program of economic development of Russia for 2018 - 2025. A large number of institutions and thousands of scientists and government officials participate in this work. But discussions and disputes with the absence of a scientific basis do not lead to results.

We propose the development and correction of the economic development program based on the management of socio-economic safety. Logical-probabilistic risk models and an event-based approach are used.


2. Programs of economic growth by Kudrin and Glazyev

The problem, however which is complicated,
will become more difficult
if it is not properly viewed.
P. Anderson

The State budget is spent for socio-economic systems (SES) and projects. Losses of the State also arise in SES and projects due to corruption, narcotization, "kickbacks", theft, decision-making "by unwritten but well-known code of behaviour", excessive spending for military projects. However, the authors of the economic development programs of Russia for 2018-2025 insistently do not consider the SES, but consider something ephemeral: investments, inflation, labor productivity, etc., operate with large-scale objectives and tasks which are incomprehensible solved. Their economic growth management programs do not have a scientific basis and are suggestions "by unwritten but well-known code of behaviour" with comments of diverse and conflicting statistics from different countries in different times.

A. Kudrin's program - the head of the Center for Strategic Research (CSR), assessing the current socio-economic situation in the country, notes: the old model of the economy does not work, low GDP growth, unfavorable demography, lack of investment due to sanctions, technological backwardness, low productivity and poor quality of public administration. He is proposing to begin the reform with a large-scale change in the system of public administration. The steps, that should be made by the government and the President, are extraordinary and serious:

  1. To reform the judicial system, change the system of personnel's selection and introduce independent arbitration. All this is impossible without the reform of public administration.
  2. Create the State as a high-tech "platform", which implies the digitization of all processes and the introduction of new management models.
  3. Develop a private initiative with a significant reduction of the State's share in the economics, pursue a competitive policy, develop small and medium-sized businesses.
  4. Create a system of continuing education for all ages, including for the elderly people.
  5. Develop regions and cities as technology centers, where infrastructure, intellectual and social resources are concentrated.
  6. In monetary policy, the benchmark should be the inflation below 2-2.5%. This is a reduction in the cost of financial resources and the creation of a basis for "long money".
  7. Taking into account the reduction of budget profits due to reduction of profits from oil and gas trading, we need find other sources of incomes, including changes in the tax system.
  8. To solve the problem of public confidence to Authorities. In the country there is low confidence to such institutions as parliament, police and ministries.

The program of S. Glazyev, the presidential adviser on economics, is stated in the letter "Eight errors of Kudrin" and this is good example of inconclusive evidences and arguments by "unwritten but well-known code of behaviour", even if the debate is conducted by the largest scientists and specialists. S. Glazyev believes that the economic program of A. Kudrin will lead to economic degradation and a drop in the standard of living of the population. He advises to run the money printing. The errors in the Kudrin program are following:

  1. Proposals to limit the deficit in 1% of GDP are based on the idea of a linear dependence between the increase of money supply and inflation. In reality, in the Russian economics, inflation decreases with the growth of money supply, and, vice versa, increases with its reduction. Reduction of inflation to 4% will not succeed.
  2. The inverse dependence between inflation and economic growth is also mistake. Studies prove the absence of such dependence with moderate inflation. For each state of the economics, there is an optimal level of inflation: the worse the quality of economic management, the higher this level.
  3. Proposals to reduce budget losses contradict the absolutely correct idea to increase spending on education and science. Expenses for these items should be increased at least twice.
  4. Based on the experience of developed economies, Glazyev believes that the problem of financing the budget deficit can be solved by money printing. World currencies, including the dollar, are not provided with gold or real values.
  5. Money is emitted under the state's debt obligations for financing of the budget deficit; money emission outstrips the growth of the economics, which corresponds to the meaning of modern credit as an instrument of advance payment. Jumps from backwardness to leaders are accompanied by a faster growth in credit emissions.
  6. At present, the transition to a new technological level is taking place which requires a sharp increase in investment and innovation activity. To ensure structural restructuring of the economics, advanced countries are rapidly increasing the amount of money emission.
  7. The opposite happens in the Russian economics. Ignoring the role of monetary policy in ensuring economic growth entails its closure in super-profitable branches of the extractive industry and the chemical and metallurgical industry while stagnation for others.
  8. Kudrin's team not made conclusions from the mistakes in the transition to inflation targeting in terms of freeing the ruble's rate. The Moscow stock exchange became the main center for generating profits by manipulation of the ruble exchange rate.
  9. We need to get rid of the above misconceptions, which are very common among our little-educated experts who hastily studied popular textbooks and blindly trusted the recommendations of the IMF.

In conclusion, we note that discussions and disputes about country's economic development programs do not lead to positive results because of the lack of a scientific basis for economic management. Calls to reduce inflation, eliminate technological backwardness, increase labor productivity, increase investment, run money printing, cannot ensure the growth of the economics.


3. Development and correction of the new program of economic development of the country

Mathematical methods for
management of economic and social
systems should be based
on sets, logic and probabilities.
Norbert Wiener, John von Neumann

The economics of the country is a complex system. The features of a complex system, as a object under control, include:

Decomposition. To manage a complex system in the economics, we propose to use decomposition - the division of the whole into parts. Decomposition is a scientific method that allows replace the solution of a large problem by solving series of smaller problems.

Structuring is the process of dividing the system into parts and establishing a connection between them. To the end of process we get a system that is foreseeable for management.

The event-based approach to the system, its elements and connections is the basis for management of a complex system based on logical-probabilistic risk models. Each system, its subsystems and their parameters are associated with event-statements and corresponding logical variables. Logical functions from initiating events are written for derivative and final events. Probabilities of derivative and final events are calculated under probabilities of initiating events.

Objects of decomposition, structuring and management. They are:

  1. The safe space of mankind, countries and regions;
  2. Socio-economic systems (SES) and projects. The state budget is spent for SES and projects. State losses arise in SES and projects. The following SES groups are distinguished:

Group SES-1. Includes SES of the highest importance for the State, aimed to reduce losses and increase profits:

  1. Management of innovations in the country, regions and companies,
  2. Management of the risk of banks and capital reservation by Basel requirements,
  3. Quality management in systems and products by WTO requirements,
  4. Monitoring and management of the crediting process in banks,
  5. Counteraction to corruption and bribery,
  6. Counteraction to the narcotization of the country,
  7. Evaluation of the quality of management systems.

SES-2 group contains complex SES for the state and regions, depending on several ministries and departments:

  1. Risk of the education system's failure.
  2. Risk of failure of the health care system.
  3. The failure of decision of informatization problem, etc.

SES-3 group contains local SES for companies and firms whose success depends mainly on their desires and capabilities:

  1. Management of risk and efficiency of the restaurant.
  2. Management of the company JSC "Tranzas" and others.

The SES' connection is provided by repeated initiating events that are included in the LP risk model of different SESs.

LP-models for quantitative evaluation, analysis and management of SES and projects are built on the basis of the logical-probabilistic approach and the introduction of event-statements for the economics: invalidity (quality), a hybrid model of the risk of problem's decision failure, a conceptual model for predicting the invalidity of the system, an indicative model of system's danger, a model for assessing the quality of the management system, special software. The core model is the model of invalidity (quality). Other types of models are used for comprehensive system analysis.

Consistency of development of the country's economic development program:

  1. Make a list of simulated and explored SESs and projects for the country.
  2. To adopt the same type of the core risk logical-probabilistic model for all SESs, for example, the LP-model of invalidity (quality);
  3. To accept uniformity of event-statements for all elements of all SESs, for example, invalidity rather than success of events.
  4. To construct structural and logical-probabilistic models of risk (invalidity) for all SESs.
  5. Select other types of models for comprehensive analysis of each SES in addition to the core model of invability.
  6. Calculate the invalidity (quality) of each SES on the logical-probabilistic model of invalidity and perform an analysis of their quality by contributions of initiating events.
  7. To build logical-probabilistic model of the country's quality, combining logically all or some logical-probabilistic models of risk of SESs.
  8. To assess, as a whole, the invalidity (quality) of the integrated logical-probabilistic model and perform analysis of contributions of initiating and repeated events.
  9. To allocate available resources in order to reduce the invalidity of initiating events that make the greatest contribution to invalidity.

We constructed and researched more than ten logical-probabilistic models of risk of different SES.

Correction of the country's economic development program is performed in real time on basis of monitoring parameters of the external and internal environment and changing logical-probabilistic models of SES's invalidity. Correction is performed on signal events when new statistical data about state of the system, event-statements in the economics, politics, laws, innovations, staff qualification, changes in the situation on the world market, reforms in education, science and economics, are appeared. Probabilities of initiating events in logical-probabilistic models of SESs are changed and new estimations of the quality of systems and contributions of initiating events are obtained.

The emergence of a new scientific approach to management in the economics is associated with certain difficulties caused by the use of the new apparatus: logical-probabilistic risk models and special software tools. The basics of such technology are not studied in universities. Therefore, it is necessary to train students and retrain economists, including senior government officials.

The list and content of organizational arrangements for the formation of a new effective scientific trend in the economics are following:

  1. Train students on the new discipline "Management of Socio-Economic Safety" with lectures and laboratory work on the computer, for example, at the Moscow State University and the Higher School of Economics.
  2. Certify the developed software for solving scientific problems. The majority of control tasks have a high computational complexity and without software are practically not solved.
  3. Identify the lead specialists for development and implementation of management technology for management of safety in socio-economic systems which have primary importance.
  4. Establish the departments "Management of Socio-Economic Safety" in economic universities and, accordingly, include in training programs the discipline "Management of Socio-Economic Safety."
  5. To include in the priority topics of scientific research of the Russian Academy of Sciences and the State the theme "Management of Socio-Economic Safety". Due to the absence of this topic, the completed studies did not have financial support about 10 years.
  6. To allocate a presidential grant and funding to complete and formalize works on the creation of a new effective scientific trend "Management of Socio-Economic Safety".

The team of scientists who created the new effective scientific direction in the economics "Management of Socio-Economic Safety" offers cooperation for state structures and can provide consultations.


Literature

  1. Kate Raworth. DOUGHNUT ECONOMICS: Seven Ways to Think Like a 21st - Century Economist / Pages: 284. Publisher: Cornerstone. Publication Date: 06.04. 2017. Category: Economic theory & philosophy.
  2. Solozhentsev E. D. The Management of Socioeconomic Safety. - Cambridge Scholars Publishing, 2017, 255 p.
  3. Соложенцев Е. Д. Топ-экономика. Управление экономической безопасностью. 2-е изд. СПб. Троицкий мост. 2016. 272 с.



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Intelligent Integrated Systems of Automated Designing Laboratory", IPME RAS
E-mail: esokar@gmail.com