Dismantling Russia's Nonpayments System: Creating Conditions for Growth
World Bank, Jan 1, 2000 - Business & Economics - 72 pages
One question preoccupies many scholars and practitioners: How can economic growth in the Russian Federation be reinvigorated? This report contributes to the current debate.Nonpayments in Russia evolved into a complex, inter-linked system over the latter half of the 1990s, becoming one of the most critical issues facing policymakers. This paper analyzes this system, including its origins, its evolution, the factors that now perpetuate it, and its costs, and identifies a minimum set of economic reforms needed to dismantle it. The paper also proposes answers to key questions about nonpayments, including: • How has its course been influenced by government policy at the federal and subnational levels? • What are the links with macroeconomic policy? • What is the role of the energy sector, and how has the system affected the way businesses operate? • What are the implications for economic growth? • How indeed, as part of Russia's transition to a monetized, market economy, did the nonpayments system come to exert a stranglehold on virtually every aspect of the economy? This report will be of interest to policymakers and economists interested in transition economies.
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Nonpayments at the Top of the Polic y Agenda
Real Interest Rate
A Universe of Federal Offsets
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30 percent accounts authorities barter billion bills budgetary cash collections cash revenues cash tax Chapter costs credible creditors disconnection discount dismantling nonpayments dismantling of nonpayments domestic EBFs economic eliminate energy companies energy monopolies energy sector expenditures export extra-budgetary funds federal budget financing firms fiscal adjustment gas and electricity Gazprom Goskomstat growth hard budget constraints implicit subsidies incentives increase industrial organization inflation targets infrastructure monopolies intermediaries investment KNOs Leningrad oblast macroeconomic managers meltdown Mezhregiongaz million rubles monetary offsets Nizhny Novgorod oblast noncash nonpayers nonpayments system percent of GDP power utilities profitable public debt raions RAO UES real interest rates regional rent seeking result rubles Russian share of cash share of NCS social soft budgets Source subnational budgets subnational level subsidies to enterprise suppliers Table tax arrears tax offsets tax payments transactions transfers transition veksels virtual economy wage World Bank