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This report investigates the predictability of cyclical turning points in Russia. For years, anyone interested in Russia had access to a full set of common tools for business cycle analysis, such as several composite leading indicators, a purchasing managers’ index, enterprise and consumer sentiment indexes, and so on. However, the 2008-09 world financial crisis spread throughout Russia quite unexpectedly for most politicians, businessmen and experts alike. Is it possible that none of existing indexes were able to say anything about the approaching decline? Using a simple “rule of thumb” proposed in this report one may easily see that that in reality this was not the case. So then why did a more or less definite forecast provided by some indexes have no consequences for common economic sentiments in Russia? This report gives some answers to this question.

Keywords: recession; growth cycles; cyclical indicators; leading indicators; turning points; Russia
JEL classification: E32

This paper examines the development of Russian industry in comparison with that of Ukrainian industry during 1995–2004 in an effort to ascertain to what extent, if any, Russian manufacturing showed signs of succumbing to ‘Dutch disease’. Ukraine and Russia began the market transition with broadly similar institutions, industrial structures and levels of technology, and the economic reforms implemented in the two countries were also similar, although Ukraine was reckoned to lag behind Russia in many areas. The main difference between them is Russia’s far greater resource wealth. It follows that differences in industrial development since 1991 may to some degree be attributable to differences in initial natural resource endowments. In short, Ukraine could provide a rough approximation of how a resource-poor Russia might have developed over the transition.

This article investigates issues related to industrial restructuring in Russia. Based on extensive sectoral data it examines, more particularly, levels and changes in labour productivity, unit labour costs and revealed comparative advantages for a large number of Russian industrial sectors. The main findings are the following. First, impressive increases in labour productivity have been achieved since 1997, especially during the post-crisis period. Secondly, this has been true for all major sectors, with the exception of those which are still predominantly state controlled or which suffer from strong state interference. Thirdly, there have been significant relative adjustments within the industrial sector, as labour productivity increased more in less productive sectors. Since the crisis, relative unit labour costs have also adjusted considerably, as less competitive sectors experienced relatively slower wage growth and larger labour force reductions. Fourthly, international ...

Since 1995 when OECD began conducting Economic Surveys of the Russian Federation many policy recommendations relating to structural reform and framework conditions have been made. This paper is an update of an earlier paper that described actions taken up to October 2011 (Vaziakova et al., 2011). It expands the Annex A.1 of the 2013 OECD Economic Survey of the Russian Federation and provides a summary table of the policies implemented. This Working Paper relates to the 2014 Economic Survey of the Russian Federation www.oecd.org/eco/surveys/economic-survey-russian-federation.htm

In the 16 years since the OECD began conducting Economic Surveys of the Russian Federation, a great many policy recommendations relating to structural reform and framework conditions have been made. This paper, expanding on Annex 1.A1 in the 2011 OECD Economic Survey of the Russian Federation, provides a summary tabulation of the state of implementation of a large number of these past Survey recommendations.

In the decade following the 1998 financial crisis Russia’s banking system grew much larger and stronger – indeed, growth rates were dangerously high – but even before the onset of the current global crisis it continued to play a limited role in intermediating savings and investment, especially for small and medium-sized enterprises. Moreover, despite important improvements, some weaknesses in prudential supervision remained, and the Russian banking sector continued to have too many very small banks doing little if any banking business. This paper discusses the policy imperatives in the short term, in the face of the ongoing economic crisis, and reforms that could be implemented over the longer term to improve the efficiency and resilience of the financial system and raise Russia’s potential growth rate. While the current crisis is painful for the banking sector as well as the broader economy, it may facilitate a restructuring of the system that will be positive in the long run, as well as new approaches to regulation that will make banking less crisis-prone.

The gas industry is perhaps Russia’s least reformed major sector. Prices are regulated, exports are monopolised and the domestic market is dominated by a state-controlled, vertically integrated monopolist, OAO Gazprom. Gazprom combines commercial and regulatory functions, and maintains tight control over the sector’s infrastructure and over information flows within it. The sector as it is currently constituted is highly unlikely to be able to sustain sufficient output growth to satisfy both rising export commitments and domestic demand. There is significant potential for accelerating the growth of non-Gazprom production and making gas supply in Russia more competitive, but this will require fundamental reform. The proposals for reform advanced in the paper address two sets of issues. First, there is an urgent need to increase transparency in the sector and transfer many of the regulatory functions now performed by Gazprom to state bodies. Secondly, there is a longer-term need for a ...

Apart from size of population and GDP, China and Viet Nam have a good deal in common. Both are economies in transition from socialist central planning to the market. Both were largely agrarian societies on the eve of their reforms and, in both, unleashing the productive forces of agriculture was an important early reform result. Indeed, a rapid improvement in rural living standards is among the outstanding achievements of both countries.

In the case of industrial development, the differences in their post-reform experience are more striking than the similarities. In both countries, industry has grown rapidly since reforms, much more rapidly on average than agriculture. Yet, the motor force of industrial growth has been different in the two countries. In China, rural township and village enterprises (TVEs) — first collectively and more recently privately owned — have led industrial growth, with state enterprises lagging far behind. In Viet Nam, growth has been comparable in state ...

This paper explores the differences, similarities and synergies between voluntary and binding approaches to international rules. Voluntary efforts to ensure that firms adhere to appropriate standards of business conduct have been an important recent development in international business. These efforts have included the publication of codes of conduct describing the nature of a firm’s commitments in such areas as environment, labour, product safety and bribery as well as implementation of specialised management systems designed to help firms honour these commitments. Yet, some NGOs and labour unions question the credibility of these efforts and wonder whether initiatives that do not have the force of law can ever be effective.

This paper notes that all approaches to the social control of business organisations – voluntary and legally binding -- have distinctive shortcomings. These include problems of: credibility arising from imperfect monitoring and enforcement; capture of the control ...

The routing system plays a fundamental role in the operation of the Internet and its security is of critical importance to the digital security of communication networks. However, there are many examples of accidental and intentional routing disruptions and security breaches that disrupt the Internet and impact networks’ digital security. This report analyses available data to quantify the scope and scale of routing incidents occurring on the global Internet, presents some of the available security techniques to limit these incidents and considers their effectiveness. While the routing system transcends national borders, the report offers policy makers a series of concrete actions to improve routing security.

Since the revolution of December 1989, Romania has returned to democratic traditions, a multi-party system and a market economy. Democratic parliamentary and presidential elections were held in 1990, 1992 and 1996. The latest parliamentary elections of November 1996 were won by the Democratic Convention of Romania (CDR), an alliance of the National Peasant Christian Democratic Party, the National Liberal Party, the Romanian Ecologist Party, and organisations and formations of civil society.

Agri-food sectors have been going through a remarkable transformation worldwide. This process has been accompanied by an increasing use of contracts, which raises concerns about market transparency, possible consequences for actors of the food supply chains and the role a government in this changing environment. This paper provides a brief overview of structural changes in the sector and main incentives behind the increased use of contracts in agriculture, together with identifying some emerging policy issues.

As Poverty Reduction Strategy Papers (PRSPs) are the driving force behind the overall development strategy of many developing countries, it is essential to consider the role of infrastructure in this important poverty reduction process. This document is, therefore, presented to contribute to the discussion on infrastructure and pro-poor growth of this second workshop. Participants are invited to provide comments in preparation for the third workshop. Furthermore, this document aims at facilitating discussion among donors to improve their inputs to the ongoing PRSP revision process by providing an overview of the role of infrastructure for economic growth and poverty reduction.
The present document summarises the findings of a background research paper that analyses the role of infrastructure in the PRSPs of 33 countries that completed their report as of 1 December, 2003.  The background paper offers a stocktaking of the contribution of infrastructure interventions to poverty reduction and pro-poor growth in each of these PRSPs (see Annex 1 for the summary findings of the PRSP review by country).
The present document has two main sections: the role of infrastructure in economic growth and poverty reduction in PRSPs (see section II) and enhancing effectiveness of aid to infrastructure development (see section III)...

The increase in market access that the expansion of the road network and the growth of Europe created between 1990 and 2012 raised GDP, employment and attracted population. An increase in market access by 1% increases GDP in a region, on average, by 0.2%, employment by 0.7% and population by 0.6%. The positive effect of market access appears to be the strongest over long-distances, most likely based on trade links that are aided by better access to regions in other countries. Predominantly urban, intermediate and predominantly rural regions benefit equally from improvements in access, however, the investment required to create the same degree of improvement in the three types of regions varies substantially. Northern, Western and Central Europe benefited consistently from market access improvements. Southern European regions with better market access gained population and employment but lacked clear GDP improvements. Conversely, Eastern Europe lost employment and population for market access improvements that occurred in a 3-hour travel time radius but had the highest economic gains in GDP and GDP per capita, 1.7% and 2.2% respectively.