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Economic security of Russia: concept, structure, and comparative perspective assessment
Material posted: -Publication date: 08-12-2010

The changes in the international environment necessitate new approaches to comparative assessment of the level of political, economic and military security in different countries of the world community.

The relevance of this is confirmed by a number of circumstances, internal and external.

First, there is the desire of some States, especially the US, to complement its superiority and economic leverage over other countries to achieve their political interests.

Secondly, the increasing problem of balance between positive and negative sides of globalization from the point of view of national defence.

Thus, the primary task of any state of the world at present is achievement of such level of economic security, which would guarantee internal stability, active participation in the international division of labour and at the same time national sovereignty.

  

The concept of economic security of the state

In the Law of the Russian Federation "About safety" the concept of "<national> security" is defined as "the state of protection of vital interests of person, society and state from internal and external threats". The "vital interests" are represented as "a set of needs, the satisfaction of which reliably ensures the existence and possibility of progressive development of personality, society and state"[1].

Thus, economic security is an integral part of national security. The economic security can be represented as the state of protection of national economy from external and internal threats, which ensures the progressive development of society, its economic and socio-political stability, despite the presence of adverse external and internal factors[2].

The state economic security is a complex socio – economic concept, reflecting a wide range of ever-changing conditions of material production, internal and external threats to the country's economy.

In this regard, it should also be noted that for the state (and for society and for the individual) does not exist of absolute economic security, there are situations when there are no external and internal threats to the national economy.

It is obvious that the economic security of a nation is determined primarily by the condition of productive forces and socio-economic relations, the extent of use of achievements of scientific and technological progress in the sector structure of foreign trade. In this regard, it can be argued that the material basis ofeconomic security of the state are developed productive forcescapable of ensuring the expanded reproduction and the civilized life of citizens. The state's economic security is closely linked with the concepts of "development" and "sustainability" of the economy.

The development of the national economy is one of the components of economic security. If the economy does not develop, the state has dramatically reduced the possibility of resistance to negative external and internal influences.

The stability of the national economy as a single system means strength and reliability of its elements, economic and organisational links between them, the ability to withstand internal and external loads.

For example, in periods of history the USSR/Russia, characterized by high level of economic security, there was a progressive development of the economy, coinciding with steady growth in its macroeconomic indicators (Fig. 1).

It is obvious that the main factors of economic security of the country are: its geographical location; natural resources; industrial and agricultural potential; the degree of socio-demographic development and, finally, the quality of public leadership.

USA, Russia, Japan, China, the EU and several other countries in the world occupy a leading position in the world industrial capacity, agricultural production, natural resources, favorable geographical position, which helps to ensure their economic security.

However, they sometimes differ sharply on its industrial potential, mineral resources, socio-demographic development, as well as the nature of state regulation of the economy that largely determines the differences in the level of protection of their national economy.

 

The structure of economic security of the state

Composite structural elements of economic safety of the state are: technological, techno-industrial, monetary, raw materials, energy, environmental, information and environmental components (Fig. 2).

Technological component of economic security determines that the state of scientific and technical potential of the country, which ensures the competitiveness of national goods and services in the markets of knowledge-intensive (high-tech) products, but also ensures self development in shortest possible time the latest technological solutions that define the leading breakthroughs in the civil industries and defence production.

Fig.1. Dynamics of macroeconomic indicators of the USSR/Russia in the period from 1950 to 2005

 
  

Fig.2. Structural elements of economic safety of the state

World practice shows that the technological component of economic security is only possible if the national economy on the path of innovative development[3].

An effective innovation system is the USA. For this system characteristic: well-defined objectives on a national scale for innovative development of national economy; large in comparison with other countries spending on research and development (R & d) on creation of innovative technologies; public funding of a significant portion of these costs; protection of intellectual property within the framework of state innovation policy (promoting active patenting); the close connection between innovative companies and universities; a large share of venture capital in total R & d funding. R & d funding in the U.S. is carried out by industrial enterprises (over us $ 100 billion. per year), the Federal administration (2004 – 89 billion.) and other government agencies and private organizations.

Considerable attention to the development of knowledge-intensive industries pays China. In recent years, the country has made significant progress in its quest to attain technological parity with leading States of the world, announced in 1985. So, in 2004 the share of R & d expenditures amounted to 1.2 % of GDP.

Chinese priorities in science and technology are large-scale integrated networks, software and information security systems, machine tools, etc. While the emphasis is on creating joint ventures and acquiring foreign firms that allows the use of advanced
foreign technology[4].

European States also played an active role in the process of formation of innovation systems national and regional levels. In the framework of the Barcelona agreement of 2002, European heads of state and government agreed for 10 years to increase funding for R & d from 1.9 to 3 % of GDP, which will allow to 2014 to reach the technological level the U.S. and Japan[5].

Of great importance for the economic security of the state is its technical component. It is understood as the ability of the national economy in case of violation of foreign economic relations, or internal socio-economic shocks quickly to compensate for their negative consequences, and steadily to carry out expanded reproduction, to meet the public (including defense) needs. It is closely connected with logistical and social factors of production.

A particular threat to national security is dependency on foreign supplies. In case of aggravation of economic, or the outbreak of a direct military confrontation such dependence can lead to significant economic difficulties and even loss of economic independence.

The most self-sufficient countries are Japan and USA. The percentage of imports to GDP is 8% and 13% respectively.

At the same time in Russia, Germany, France, the UK and Italy the range of values of the ratio of imports to GDP varies in the range of 20 – 30 %. In General, we can say that Russia is on a par with economically independent countries of Europe.

The country, the national economy which is in the orbit of someone's influence, have the ratio of imports to GDP of 40 – 70 %. In Europe this group is Austria (45 %), Belgium (73 %), the Netherlands (56 %), Ireland (73 %), Portugal (40 %), Czech Republic (62 %), Hungary (55 %), Slovakia (67 %). Going beyond this range speaks about the economy, which can no longer live independently. An example is Estonia, which has the characteristic indicator is at 80 %.

Monetary component can be defined as the ability of the state to get, to place and use domestic and foreign loans and investments, and to pay him within, ensuring sustainable functioning of its monetary system and the satisfaction of public needs in unfavorable external and internal economic conditions.

World experience shows that the sustainability of economic growth and economic security of the state is possible only if the type of investment development of national economy. Each country has its own implements this type, but almost always respected optimum ratio giving maximum effect to the state's economy:

  • the investments are expected to be 20 to 25% of GDP (capitalization);
  • the share of foreign direct investment should be not less than 15 – 17 % of the internal volume;
  • the degree of wear of fixed assets should not exceed 30 – 35 %.

Thus, for example, for Russia doubling GDP is not possible without a steady influx of large volumes of investment (not less than 1,11 trillion. $ including direct foreign investments – not less than 170 billion. 2004 – 2013[6]).

In this regard, the problem of investment attractiveness of the state. The main components of investment attractiveness are generally considered two characteristics: investment risk and investment potential[7].

In this regard, it should be noted that Russia has great investment potential, whose realization is still constrained by available investment risk[8].

Foodandraw materialsinvolve the security of the country's economy respectively food and raw materials in the sizes required for the effective functioning of the national economy.

The provision of food to population is the most important factor of economic security of the state. For example, in the U.S., according to the Law on food security (FoodSecurityAct, 1985), the critical level of food stocks is determined by 40 % of average annual consumption. As the most important events, providing the population with food, called support stability of sales in the domestic food market of national production and implementation of food aid programmes for the poor[9].

The most important measure to ensure food and raw material component of the economic security of the United States, Canada and other postindustrial countries is the financial support of the agriculture from the state budget, support and lobbying of agricultural exports.

At the same time, Russia still has not reached the Soviet level of providing citizens with food[10]. At the same time more than 70 % of food products supplied to Russia from EU countries, USA and Canada[11].

Provision of essential commodities is also one of the main factors of economic security of the state. Thus the problem of ensuring food and resource security is the dependence of national economy on imports of food and raw materials.

The energy component of the economic security of the state implies the physical stability of energy supplies for domestic consumption and the national economy to adapt to the new world prices on them.

One of the main problematic issues here is the creation of a diversified structure of energy imports and energy resources and introduction of energy saving technologies. The solution to this problem at the state level makes it possible to prevent the threats associated with energodefitsita in the national economy.

The example of the formation of a diversified structure of energy imports and energy, and the introduction of energy saving technologies is the U.S. leader in the consumption and import of oil and oil products[12].

At the same time the US continuously reduce the energy intensity and the oil capacity of its GDP. Special attention is paid to the development of energy-saving technological processes and high technology, the support of activities aimed at improving the country's energy balance the share of renewable and alternative energy sources. As a result, for 1970 – 1980 energy and the oil capacity of the GDP of the USA decreased respectively by 17 and 12 %, in 1980 – 1990 – another 19.5 and 25.9 per cent. In 2000 the energy intensity and the oil capacity of the GDP was 0.417 and 0,171 t of fuel equivalent for 1 thousand dollars. respectively[13].

In addition, under the energy policy Act and energy savings 1975, the U.S. created the strategic petroleum reserve (CNR) and developed a program for the warehousing of crude oil.

The goal of the program is the establishment of crude oil storage capacity of 750 million barrels (120 million tons) in large underground salt caverns at six locations on the Gulf coast (Louisiana to EA. - Bay-Choctaw, Sulphur mines, and weeks island and West Hackberry; in TX - Briant-mount and big-hill)[14]. Except for emergencies of a national character, when President decides on the removal of oil from CNR, this reserve is also used to solve local problems. So, in mid-2000, had twice taken a decision on the allocation of the Ira for 500 thousand barrels of oil two oil refinery companies in Louisiana, the delivery of raw materials which was blocked because of an accident in the shipping channel.

The energy efficiency of the Russian economy is also one of the main priorities of the Energy strategy of Russia until 2020 approved by the Russian Government in August 2003. According to this strategy almost ¾ of the required consumption growth should be achieved through energy saving measures[15].

Regulation No. 796 of 17 November 2002, the Government approved the Federal target program "energy efficient economy" for 2002-2005 and in prospect till 2010" – the most important instrument for the implementation of national energy strategy. The main goal of the program is the creation of socially-oriented energy management, providing due to the restructuring of the energy producing and energy consuming industries, energy saving, reliable supply of energy industries, energy intensity of GDP reduced by 2005 to 13% by 2010 26% compared with 2000[16].

The energy component of the economic security of the state also involves the definition, identification and classification of events the occurrence of which is directly or indirectly likely to prejudice the development of the fuel and energy complex (FEC). In this regard, among other problems, decreasing the energy security of the state, include: depreciation of capital assets, the gap of domestic and world energy prices, the pace and scale of nationalization and privatization in industry, the growth of accidents at the enterprises of fuel and energy complex of the country.

In this regard, for example, the Energy strategy of Russia provides for the restructuring of a number of energy producing industries[17].

The environmental component involves the state of the national economy, which are prevented or timely resolve contradictions between society and the environment, do not apply the damage to the economic potential of the state.

The solution to the problem of environmental pollution is closely linked to the restriction of human activities and primarily with neutralization of anthropogenic impacts on natural ecological systems, the ozone layer of the atmosphere, the earth, its bowels, superficial and underground waters, atmospheric air, forests and other vegetation, fauna, microorganisms, genetic Fund and natural landscapes.

In this regard, the government's role is to ensure the preservation of the natural potential of the country (region, world) for ensuring the possibility of their economic growth[18].

In this situation, the cautious Russia to ratify the Kyoto Protocol is clear: the fee for the performance of obligations to the international community may be for the economy of the state is too high.

The information component involves the mutual exchange of industrial, scientific-technical and other information within the business complex of the state and with foreign partners, which will be guaranteed: reliable information exchange; increasing the share of intangible assets in national wealth; the increase in "specific weight" of information in the final cost of the produced domestic product; and the secret of production technology.

An axiom is a proposition that a country that has superiority in the information support of the national economy, the forces and means of information warfare, can rely on leadership in economic and military-political fields, to have a strategic and economic advantage.

In 60 - 70th years of XX century the economy of Japan and some other countries of East Asia were able to carry out a rapid breakthrough due to the higher level of working with information – development of information management and the establishment of business information networks. This leadership remains today.

USA in 80 – 90s years of the last century has also achieved significant success in the economy based on electronic information technologies and the restructuring of the national economy with the use of information networks. In recent years, through the introduction of information technology provides 1/3 of the GDP of the country. The development of information technology in the United States is the main condition of transition to the new economy - "an economy based on knowledge and ideas".

In approved by the President of the Russian Doctrine of information security of the Russian Federation[19] as the priority tasks of the development of the national economy deals with the development of modern information technology, the domestic industry of means of Informatization, telecommunications and communications, providing the home market with its products and the entry of these products to the world market, as well as the accumulation, preservation and effective usage of domestic information resources.

It is obvious that in modern conditions only on this basis it is possible to solve the problem of creating high technologies, technological re-equipment of industry, enhancement of the achievements of Soviet science and technology. In this regard, in Russia today implemented the Federal target program "national technological base", "Electronic Russia", "Development of electronic technology in Russia" are aimed at strengthening the information component of the economic security of our country[20].

Thus, consideration of the structure and component parts of economic security of the state provides an opportunity to determine the factors influencing this type of national security in modern conditions.

In this connection also becomes obvious that the economic security is a critical function of the state. As the specific direction of state economic policy, it covers the system of relations between economic entities to meet the economic needs of the society and has the goal of finding optimal ways of solving economic problems[21].

 

The comparative estimation of level of economic safety of the state

The comparative estimation of level of economic safety of the state may be based on determining the values normalized relative to the threshold levels of particular indicators of economic security of the state[22].

The results of calculations of the normalized partial indicators, characterizing separate components of the national security services of Russia, USA, Japan, Germany, UK, Italy, South Korea and China in the period 1997 – 2006, allowed us to estimate levels of the various parties of economic security of those States of the world[23].

The results of calculations of values of common (integrated) normalized indicators of economic security of Russia, the USA, Japan, Germany, UK, Italy, South Korea and China at the same spaciotemporal security of the national economy in the period 1997 – 2006 are presented in table. 1. and in figure 3.

Table 1

 Integral indicator of economic security

 

 

 

 

 

 

 

 

 

Here a single valuee total (integral) indicator of level of economic safety of the state corresponds to the total (integrated) conditional threshold, which, nevertheless, gives an idea about some of the border between security and insecurity national economy from external and internal threats[24].

  

Fig. 3. Dynamics of changes in the values of the integral index of economic security in developed countries in the world (1997-2006)

The obtained values of the total normalized indicators of economic security of Russia, the USA, Japan, Germany, UK, Italy, South Korea and China in the period 1997 – 2006, in our opinion, adequately reflect the phenomena and processes that occurred and are occurring in the economy of these States and in the world economy as a whole. In particular, changes in the levels of economic security testify to their "fall" in the years of economic crises, and growth in periods of a favourable environment for the development of national economies of these countries and growth in the global economy.

Analysis of obtained values suggests that the proposed approach to comparative assessment of the level of economic security of Russia gives the opportunity, with one hand, to estimate the dynamics of economic security of our state, and with another - to compare the security level of domestic national economy to levels of economic security of different foreign countries.

The proposed approach to comparative assessment of the level of economic security of Russia does not apply for universality and comprehensive detailed coverage of all factors affecting the security of the national economy of our country. However, the simplicity of the calculations of private and General indicators of economic security of different countries of the world gives seems to be able to assess the dynamics of changes in levels and the prospect of ensuring their economic security and compare the security levels of the national economies.

 

Prospects for economic development and improve the economic security of Russia

On behalf of the President of the Russian Federation Ministry of economic development and trade developed the Concept long-term socially-economic development of our country for the period up to 2020, the aim of which was to identify sustainable ways of improving the welfare of Russian citizens, strengthening the economic security of the country and development of economy of Russia. The main strategic economic benchmark was called the restoration of Russia's status as a world economic power[25].

The strategic goal proclaimed the transformation of our country into one of the global leaders of the world economy, its output is at the level of socio-economic development of highly industrialized countries. By 2020, according to this Concept, Russia should: sign in the top six of the world's leading economic power – gross domestic product[26]; to ensure the well-being of the population relevant to developed countries[27]; and to achieve scientific, technological and financial leadership, ensuring the specialization of countries in world economy[28].

System solution of such problems is the transition of the Russian economy from export-raw development to innovative type[29]. This will drastically enhance its competitive potential by increasing comparative advantages in science, education and high technologies and on this basis to involve new sources of economic growth.

In the context of global competition, it is proposed to provide rapid "breakthrough" development in the sectors of Russian economy that define its specialization in the world economy. This, in turn, necessitates the implementation of four strategies for economic development:

  • firstly, the use of global competitive advantages of Russia in the spheres of energy, transport and agricultural sector;
  • secondly, the formation of a powerful scientific-technological complex, providing the global specialization of Russia in hi-tech markets;
  • thirdly, structural diversification of the national economy and,
  • fourthly, the development of market relations, democracy and the protection of the rights and freedoms of entrepreneurship.

However, the implementation of these strategies will occur in terms of the long-term conservation of the high growth rate of the world economy[30], the progressive development of globalization and strengthen its regional component.

World economic growth will be achieved mainly at the expense of developing countries, especially China and India, which will determine the 45 – 50 % growth of the world economy[31]. The accelerated growth rates of R & d expenditures in China and India will lead by 2020 to become one of the leaders of scientific and technological development in the world.

Thus, trends in the development of the world economy in the long term and create new opportunitiesbut also new risks for the Russian Federation to ensure its economic security.

New opportunities to increase the economic security of Russia will be concluded in the utilization of existing strategic resources, primarily in the implementation of energy, transit, environmental and high-tech potential of our country and its economy. At the same time, a new wave of high-tech developments on the basis of nano - and biotechnologies offer opportunities for Russia "impulse" to world markets[32].

At the same time, the instability of world markets of energy carriers, diversification of oil and gas supplies to the European and Chinese markets bypassing Russia will inevitably have an impact on the change in its position as one of the leading suppliers of these types of energy[33]. At the same time the globalization of financial markets may increase risks of loss of the Russian financial system, its independence and its transformation into a peripheral segment of the European and American financial markets.

Thus,the prospects for economic development and improve the economic security of Russia will be determined by both objective conditions and factors of development of world economy, subjective economic, social, but most importantly – political processes taking place in different world regions and in our country.

* * *

An effective system of ensuring economic security – a matter of life of any state. This is even more important for today's Russia, seeking to take its rightful place in the global geopolitical and economic space.

Analysis of tendencies of development of world economic relations, scientific-technical transformations in the economy, global integration processes and the impact of these factors on the economic basis of national security States of the world community allows you to identify the main directions of ensuring economic security of the state. Thus, it is obvious that the evaluation of the effectiveness of the security of the national economy is unthinkable without the determination of the retrospective, current and prospective levels of economic security of the state.


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