"Real Estate and Investments. Legal Regulation", the journal

Issue 1 (2), 2000

Current Issues of Social and Economic Development of Russia

Gladyshev A.N., doctor of economic sciences, professor, Zholkov A.S., academic of the Russian Academy of Natural Sciences, Schutberg B.M., doctor of economic sciences, professor, Shevelkin N.P., doctor of economic sciences, professor

Russian Federation experiences today one of the most complicated and painful periods in its history. Enormous modifications in the society take place. For about 10 years already there is a change of the economic formation along with appearance of new forms of ownership on factors of production, new production relations. Privatization is carried out with the rates unprecedented in world practice, and practically all population of the country is involved in this process.

In this connection there is a quite natural question: how do different levels of the population perceive the privatization, whether all here is done correctly? Unfortunately, it is necessary to admit, that not all. Moreover, quite often there are situations that do not correspond to the world tendencies in countries with free business and market economy and to the common sense as well.

Strengthening of state regulation

We shall base on a deep belief and world experience, that a key reason of our troubles is the elimination of the state from the sphere of control, especially during the deepest crisis. Without belittling the advantages of market, its huge creative force, it is possible to state with all responsibility, that within an aspect of multifold strengthening of the role of a market the state is unfairly removed at a background. It has resulted in destruction of an integrated system of efficient control of social and economic processes including market and state regulation.

We are convinced that the way out of crisis is impossible without a deep strengthening of state regulation of economic and social development of the country. The practice of many countries testifies, that to exit from even less dramatic situations all power of a state, complex of measures of state regulation are used.

We are threatened with a most severe social blow-up characterized by universal depopulation, by unprecedented stratification at continuously increasing number of people being on the verge of degradation and extinction. Without a leading role of the state it is impossible to restore social guaranties, to prevent further split of the society.

To put an end to the crisis in Russia we need multiple rise of capital investments. Attempts to solve the problem by methods of financial stabilization on the macro level have been of no success. Without active involvement of the state both in a part of mobilization of the means available, and in a problem of ensuring of guarantees to the domestic and foreign investors this problem can not be solved no more.

The economic space of Russia becomes more and more differentiated, what results in increasing disintegration of the subjects of Russian Federation, to the separatism and threatens the existence of the Russian state. It is possible to stop this process only on the basis of the most rigid state control over keeping to the Constitution of Russian Federation and laws regulating bases of the federative structure of Russia.

In the conditions of shortage of financial resources the greatest effect is provided by selective policy defining priorities in development of particular branches and territories, realization of which provides the achievement of main public purposes. Only the state can work out such policy.

Being unprepared, Russia began to conduct the liberalization of prices and participate actively on the world market. It has resulted in the fact that the overwhelming part of firms of a manufacturing industry has turned to be noncompetitive and has lost commodity markets even in their locales. The major task in conditions of the market economy is to repair competitive strength of Russian production. Without state support, at most severe investment deficit the majority of firms are not capable to solve this problem themselves. The state bodies of all developed countries protect the producers from exterior competition on home markets and by all measures encourage their participation on the world market. It is obvious, that the similar policy is desirable in Russia.

Criminalisation of the Russian society has reached a serious level. Crimes, bribery, corruption, abuses privatization, hinder the development of business, undermine fundamentals of market economy, and harm the intellectual state of society. Nobody but the state being based on the support of people, can struggle successfully with this cancer tumour.

In Russia there is a big shadow economy, which makes, according to different calculations, from 20 to 40% of an economic turnover of the country. It decreases the incomes of the state, makes suffer retirees, children, servicemen, employees of budgetary companies, deforms labor relations, leads to mass violations of the workers rights. Aims of the state are as follows: firstly, to create conditions for transferring the shadow economy to the legal state and, secondly, to organize an effective system of preventing violations of the economic legislation.

It would be desirable to underline one more time, that we do not consider strengthening of a role of the state to be a necessity of the market relations restriction. We see the essence of the role of government in the presence of the state regulation balance and market methods of managing, which to the greatest degree matches the problems of putting an end to the crisis, transition to the development.

For the development of business and that firms feel well on the Russian market, the state should, from our point of view, provide: protection of the property laws and fair competition; social guaranties to all citizens, irrespective of their position in society; legislative regulation of the minimum wage irrespective of forms of ownership of firms; support of creation of market and financial infrastructure in all locales; guarantees to the businessmen and investors (including foreign) in keeping statutory rules of the business relations; support of forming of federal and regional systems of insurance, including insurance of business and investment risks; conditions for creation of regional and international securities markets, real estate markets, specialized wholesale markets and fairs.

The strengthening of state regulation is impossible without creation of an appropriate institutional environment and creation of new administrative structures. It is reasonable to pass the law on state regulation, in which the system of the basic documents, order of their development, coordination and adoption would be formed, state bodies responsible for their elaboration and realization would be defined.

From our point of view " the National strategy of revival of Russia ", which should be presented by the Government of Russian Federation, approved by federal Assembly and after the approval by the President of Russian Federation have the status of a federal law, could become such document. This document should contain aims for the period of 5-10 years, priorities of development of economy and social sphere, problems and methods of mobilization of resources, major directions of their usage.

Taking into account exclusive importance and the complex character of a problem, it is reasonable to create a series of control bodies having high superdepartamental status:

Political and economical Council of Russia governed by the President, where members of Presidium of the Government, principals of the largest subjects of Russian Federation and committees of State Duma are present; Commission on mobilization of financial resources headed by the Chairman of Government; Commission on the investments engaging, headed by the vice-premier for economy.

Control on keeping to "the National strategy of revival of Russia " should be effected by the State Committee or Commission not subordinated to the Government of Russian Federation. It is reasonable to elect the members of such Committee (or Commission) and principals of its regional branches by the State Duma on a period long enough. With this purpose it is possible to pass a federal law "On state control", which would define problems, principles and methods of control, order of creation and competency of bodies effecting it, measures applied to entities and organizations, who do not keep to the law " On the National strategy of revival of Russia ".

Strengthening of the role of state regulation shows heightened demands to the prognosis and justification of the most rational ways of development of economical and social spheres. In conditions of transition to market economy we talk not about creation of a system of planning, but about the development of methods of forecasting of possible results of using this or that scheme of development.

The system of forecasting, from our point of view, should include short-term (one - two years), medium-term (4-5 years) and long-term (10-15 years) forecasts.

Short term forecasts should form the basis for operating control and contain characteristics of all main aspects of reproduction: balance of working force, employment, financial balance, volume of investments with definition of their main sources, development of economy, supply and demand on major items of production, commodity turnover, rate of inflation, price indices and other indices giving a complete aggregate view on the development of all branches and spheres of economy. Besides, short term forecasts should define the instruments of economic policy: reinvestment rates, exchange rates of rouble, the system of taxation, customs tariffs, norms of depreciation etc. On this basis the draft of the federal budget for the next year is worked out.

The aim of the intermediate term forecasting is the detection of expected disproportions and gorges hampering social and economic development of the country, searching of ways of usage of an available potential of branches and locales, definition of new efficient directions of production development which are available owing to scientific and technical progress and evolution of the world market.

On the basis of an alternative medium-term forecast different ways of the competitive strength and investment attractiveness raising of national economy, and also branch and regional priorities, direction of scientific and technical, social and economic development of country, should be justified and economically considered. Forecast calculations can serve a basis for a state policy of social and economic development of country on a medium-term phase, which should be passed in State Duma after wide discussion in the society and coordination of main items with the subjects of Russian Federation. On the basis of the forecast data and state policy target programs can be worked out, and also directions of the economic mechanism perfecting can be defined.

Both short-term, and the medium-term forecasts should have the detailed regional context and should be worked out together with the subjects of Russian Federation, each of which can make similar forecasts on the subject of its economy.

Long-term forecasts have to take into account the global tendencies of scientific, technical and economic development, and also possible geopolitical modifications and their influence on the position of Russia in world community, to select the most perspective variants of specialization in a world-wide division of labour and to justify the ways of reaching the level of civilized countries in social development.

Taking into account the experience of before plan justifications of the Soviet time, it would be expedient to form a system of long-term forecasting consisting of four parts: the prognosis of macroeconomic indices and involvement of Russia in the world market; the prognosis of scientific and technical progress and its social and economic consequences; the prognosis of territorial development of Russia and social and economic development of locales; the prognosis of the population, its employment and habitation.

Depending on a form of ownership, the technologies of planning of various rigidity degree can be used. In relation to public firms, where the state has complete liability, it is necessary to apply procedures of directive control according to the purposes of their development, established by the state. In relation to firms, where the state bears limited liability, the procedure of planning should be less strict and include mainly the decision making on assets control and investment policy.

Plans of the public sector development should be combined with programs of social and economic development of country as a whole. And the state sector has to perform a role of the locomotive in accomplishment of priorities of economic development. It is impossible to reduce its role to functions of social procurement and support of unprofitable firms. In today's conditions the state will still have to accept the responsibility for development of high technology industries forming main potential of economic growth.

The public sector should become a source of stability of the economy, and this fact demands seriously enough the accurateness of the prognosis of its development. In particular, the appropriate state bodies should watch forming of the investment program of firms of a state sector, including these of them, where the state owns only part of the stock capital. Thus it is impossible to allow the move of demand of state sector firms abroad as placing of orders on manufacturing of equipment, capital construction, and deliveries of spare parts and raw material should be linked mainly to a home market. For this purpose it is expedient to introduce the procedure of protection and affirmation in appropriate government departments of industrial and investment programs of firms of a state sector. The latter have not just to control formal correspondence of these programs to the demand of placing of orders on a home market, but also to encourage their optimization, executing of demands of competition and effectiveness of appropriate purchases, to help firms in installation of favorable cooperation connections.

Programs of placing of orders, plans of production and investments development, usage of funds of depreciation of firms owned (including partially) by the state should pass through the procedure of affirmation in competent government departments. First of all, it concerns natural monopolies, such as the RSS " UES of Russia ", "Gazprom", Ministry of transport, "Sviasinvest" and others. Besides, the financial and accounting maintenance of publicly owned firms should be conducted by state commercial banks, which will thus extend their possibilities. Among other tasks the state control over these firms should hinder ineffective and no-purpose usage of their assets, placing of orders abroad at presence of domestic analogs, and to promote optimization and complete usage of available possibilities of development.

Activation of the state investment policy

The raise of investment activity is the major state problem today. Only multiple growth of capital investments in real economy will allow reviving of competitive branches on a new technological basis, creating centers of growth of the high technology production, raising of agriculture, re-equipment of transport and other branches.

Indispensable condition of the investment activity growth is the step-by-step stabilization of social and political situation in the society, creation of the effective mechanism of mobilization of the domestic finance (firms and population), engaging the foreign capital. Thus the state has to provide: lowering of the profit taxes, raise of norms of depreciation and control over correct usage of depreciation deductions by firms; creation of federal and regional guaranty funds, concentration in them of a part of means of the federal and regional budgets, and assets of state firms and grant of pledge, concession or rent rights for the investors of the state-owned property, lands and natural resources at the agreement with appropriate state standards; support of the insurance companies and financial and insurance associations specializing on securing investment risks; development of a system of specialized federal and complex regional leasing companies providing first of all agriculture and small and medium firms of different branches with modern technique on favorable terms; adoption of measures against investors who acquire the shares of privatized firms on conditions of investment competitions and who do not keep to their obligations; wide introduction of mortgage crediting, issue of financially provided loans and other measures of the mobilization of money resources of the population on the housing construction financing.

An important part of investment policy is encouraging of the foreign investment inflow. The huge investment capital is accrued in the world, and Russia represents the vast and favorable market of its application. However for its increasing inflow, the state should provide necessary conditions and guarantees to the investors.

Stress on the following measures of state regulation is important today: adoption of the national development strategy which would clarify what branches, spheres of economy and locales will be supported by the state first of all and what economic mechanisms will act in a long-term perspective; making legislative and normative base in an investment field correspond to the world standards; ensuring of strict and equal guarantees to the domestic and foreign investors; receiving of credit lines for the purpose of delivery of modern equipment, new technique and technology, for the purpose of re-structuring of economy and industrial locales and depressive branches; encouraging the creation of international financial and insurance companies, and also consulting centers acting in an investment field; ensuring of privileges to the domestic and foreign investors, investing in priority branches and crisis locales.

11 Bases of the raise of economy - scientific and technical progress

Serious destruction has taken place in scientific and technical potential of the country, which is a main source of modern growth. Volume of research and development, experimental and designer engineering decreased more than 10 times. Taking into account, that the main part of the national income growth is embodied in scientific and technical progress, its weakening leads to the loss of possibilities of the future social and economic development of the country, growth and competitive strength of its economy on the world market.

Still present scientific and technical potential, within the framework of an economic policy carried on, remains dead, important discoveries and technological solutions lay on shelves like a lifeless weight for years. The ignoring of achievements of our scientists and technologists dooms productive forces of country to dependence on other countries, economy - on stagnation and degradation.

Today it is necessary to look in a new way at scientific production, which requires tens billions of roubles on its creation. It is necessary to conduct fundamental inventory control of scientific engineering, discoveries and inventions, to define works matching a world level, to conduct their licensing and to present them at the market of scientific production. The most simplified calculations show, that the income of the budget from scientific production (including the world market) is comparable, for example, with all oil and gas complex of the country.

The scientific and technical progress has a key role in state regulation of scales and directions of development of the economy. The modern system of state regulation of economy includes a choice of priorities of long-term development, creation of the mechanism of its encouraging.

Profound improvement of control over state property

It is time to put an end to confusion in control over state property - unitary firms, shares in the capital of joint-stock companies, real estate. Today state firms should know precisely, what would they do to have profit. These firms should be managed by competent people, which know what state task they should fulfill. They should bear responsibility for losses produced by managers, it is necessary to eliminate the possibility of transfer of money, received for the production sold, to the income of private firms, framed at state enterprises.

Representatives of the state in joint-stock companies with involvement of the state capital should also understand their tasks: whether to augment the dividends transferred to the budget, or to promote the growth of industrial investments. Both should have a task: to get profit and to augment tax transfers to the budget, or to accumulate industrial investments.

Some years after completion of the campaign of mass privatization chaos remains in what concerns property, there are no authentic registries, where it would be fixed, there are still vagueness and arguing concerning units of state property between Federation and its subjects. Lawfulness of privatization and efficiency of control over keeping to its conditions are in many cases doubted. The mechanism of reprivatization is not worked out at all. All these problems deserve prior attention of the state.

Lowering of costs excessive for the state on maintaining of the huge country territory

Russia is a unique country. It is unique because of sizes of its territory (17 millions square kilometers, almost twice as much as any largest country in the world), length of boundaries (tens thousand kilometers), natural and climatic conditions (2/3 of the territory is located in a zone of extreme natural and climatic conditions - permafrost, low temperatures, bad soils, not enough suitable for normal vital activity of the man); huge length of communications (railways and highways, gas and oil pipelines, electric-power transmission lines, voice circuits); low density of population, presence of a great number of small settlements rather remote from each other; volume of the basic vitally necessary natural resources for all mankind (land as vital space, forests reproducing oxygen in planetary scales, fresh water, hydrocarbon raw materials) and, at last, it is unique because of diversity of national composition of the population (more than 100 peoples and nationalities).

Russia has to spend huge resources on the economical development in these unique conditions, and these expenses are a heavy burden for the state and do not help to achieve vitally necessary aims. To decrease this burden excessive for our state, it can be offered: first of all, to create the mechanism and forms of co-operation of Russia with other countries in the field of usage by the world community of our unique resources, reservation of territories for habitation, introduction of policy of the life-providing resources saving. All countries should participate in expenditures on reviving, maintaining and saving of resources of planetary value necessary for life of all people on our Earth; the World community, interested in safety of forests and fresh water resources, should pay Russia at least part of expenses for the policy of resources saving; secondly, to resettle people from extreme districts, where the expenditures on ensuring of vital activity are excessively high, and the life conditions are rather severe. We are for the practice of only local forms of assimilation of the most efficient resources in northern districts providing normal production in market conditions. Certainly, the resettlement of millions people is a rather complicated and capital-intensive task, but we do not have another way, as their maintenance at the expense of the budget during many years will turn to be even more expensive to state and doom the Northerns to the life full of privations. thirdly, to complete and legislate the mechanism of leasing of particular parts of the Russian territory to foreign states, having thus precisely defined conditions of their development and character of usage.

Radical improvement of regional policy

For the last years the regional problem has become one of the main problems of public development of Russia. Unlike other problems this one is not localized in economic, social or political sphere, it penetrates all parts of the Russian life, increases crisis processes, aggravates the critical situation with an ethnic question, and complicates political contravention.

In the basis the regional problem has deep character, because it is stipulated by natural and historical peculiarities of Russia. One of the profound mistakes of the reformers consists in the fact that in their programs of transition to market economy they have simply overlooked its regional aspect. Meanwhile the transition to democratic principles of public life and real federalism shows heightened demands to the regional state policy, requires activation of the state activity aimed at coordination of regional and national interests, on development of the territorial strategy responding long-time interests of all peoples of Russia.

The lack of precise, constructive regional policy has caused the great damage to the country: the gap between rather well-off and "poor" locales increased tenfold, inter-regional economic connections are destroyed, certain locales are planning to separate, interethnic conflicts take place in different parts of the country, some of them develop into armed conflicts. All this not only aggravates a crisis situation, but also directly threatens the wholeness of the Russian State.

We consider the forming of new, strong regional policy, which is based on the most active involvement of the state in the solution of regional problems to be a major problem. The crisis occurrences in a regional sphere have resulted in the fact that today economic space of Russia is so inhomogeneous, as in no one developed country of the world.

Unreasoned deeds of authorities stimulate destructive process as well. Despite of the provisions of the Constitution of Russian Federation on legal equality of the subjects of Federation (item 5), about free move of goods, services, financial assets (item 8) and series of other provisions aimed at strengthening of the state, the Government of Russian Federation has been concluding the exclusive agreements with the subjects of Russian Federation and giving them individual privileges until recently. The governors of the subjects of Russian Federation establish their rules of trade and export limitations. Process of allocation of competency between federation and its subjects including on major questions of the property on natural resources is far from completion till now.

Disintegration in the juridical sphere augments. According to some official data more than 20 thousand legal acts (laws, the orders of governors etc.) are passed in locales, which do not correspond to the Constitutions of Russian Federation and Federal laws. Therefore the ideas of our old "friend" Bsjesinsky about the division of Russia into three parts (European, Siberian and Far East) or recommendation of the ambassador of the USA in Russia about creation "of the special status of Siberia" have appeared. All activity (or more correctly divergence) of the reformers in regional sphere of the state policy leads to it.

The brightest example of the lack of purposeful regional policy is the appearance of extensive crisis zones, where the most deep collapse of industrial and agricultural production takes place, with mass unemployment and poverty of the population, critical interethnic relations.

According to the combination of these factors on the territory of Russia several crisis zones have formed: Northern zone, where hundred thousand people lost their jobs and do not have the possibility to move to other locales; the center of the European part, where crisis of firms of the military and industrial complex and light industry has deprived of job and minimal means of existence millions of people; northern Caucasus, where along with common economic troubles millions of people suffer from the war in Chechenya. The locales of the south of Siberia not possessing necessary financial and economic potential are also in the crisis situation.

The reasons for a distress of tens millions citizens living in crisis districts, are various, but there is a common one Ч lack of a rational regional state policy. The fact that the state should solve regional problems is obvious, as pure market methods lead to their aggravation.

The crisis of the negative tendencies can take place under condition of the carefully planned state policy and constructive forces of the society.

Scientifically justified strategy of territorial development of Russia, which is formed at the influence of global world processes in view of place of Russia in intercontinental communications and role of macro-regions in the territorial division of labor should serve a basis of such policy.

Taking into account fast economic growth of the countries of Southeast Asia, global processes can result in isolation and withstanding of principal world economic groups: integrated Europe, Northern America and Southeast Asia. In this case, if Russia keeps to the present policy of an economic openness and almost unrestricted independence of locales, the weakened interior integration forces will hardly manage to resist powerful forces, different in the view of exterior influence, tearing economic space of the country.

Alternate development of the situation is an amplification of integration between contesting world economic centers. In this case Russia can be an integrator. For this purpose it is necessary, in particular, to realize the grandiose drafts on creation of transport corridors between Europe, Eastern Asia and North America.

It is obvious, that the second variant of development of the global situation is more preferable to Russia. But in any case we can receive positive results at the condition of an active and purposeful state policy.

Other global worldwide process is the transition to the paradigm of steady development, main purpose of which is care of the creation of necessary conditions for life of the future generations. Russia having huge territory, one third of wood resources of the planet, one fifth of fresh water resources, is a main strategic reserve for survival of the entire mankind. In the rather near future one of our main oversights - weak development of the territory - can turn to a powerful additional resource of development. However for this purpose the state should control the usage of various natural resources.

Interests of the federal center and locales

Process of the coordination of interests of federation and locales should be the core of regional policy. Articulated plans of the reforms accents transference in locales have turned to be false and incorrect. The form was false because competences on managing financial resources were not transferred in necessary amount to locales. And incorrect in essence because the growth of economic independence of locales without appropriate growth of funding effect of the state leads to its weakening and decay. At disposal of the state there should be economic "stress", base and infrastructural branches consolidating all locales, despite of their diversity. And consolidating not by administrative coercion, but with the help of economic interest.

Such centers of consolidation can be a fuel and energy complex of Siberia, non-ferrous metallurgy of Ural, Eastern Siberia and Far East, a high technology machine industry of St. Petersburg, Central region, Volga and Ural. The industrial centers of these districts been formed during many decades as a result of efforts of all the country now should work for the value of all locales, to become that supporting structure, on which creation of the federated state can be based.

In conditions of Russia the extremely important role is acquired by a state policy of prices and tariffs in electric power generating systems, on a railway and water transport, which in many respects define production costs, influence inter-regional connections and life conditions of the population. The maintaining on all the territory of our country of uniform economic space requires appropriate transport and communication policy. In particular, for the regions of North and Far East it is expedient to repair the bounties for transport carriages and communication services. The appropriate policy in electric power industry, restoration of a uniform electric power generating system of country is necessary also for ensuring uniform economic space. Only real regulating of the key economic branches and natural monopolies can provide to the state the possibility to influence actively policy of the locales which have obtained large independence, and to provide their necessary integration within the framework of common economic space. And it will be neither return to a former common national economic complex, nor reintegration, but the new integration, shaping of a new economic complex of the country on the basis of combination of national and regional interests, state and market methods of managing.

Active state policy is impossible without selection of priorities. In programs currently in force the tasks of support of the underdeveloped and depressive locales are set, the mechanism of financial and budgetary reallocation of resources incoming as transfers in locales with low budgetary security is also aimed at it. It is policy of the favorites, who need to solve the most acute social problems, to hold on for power some more time. But what such policy can give in the long-time plan? Under our calculations, that economically weakest subjects of Russian Federation have achieved average European level at least, 30-40 years are required provided that their rates of development are twice as high as average Russian. It makes us understand, that the underdeveloped locales will stay with the scarce budgets, and the locales - donors will begin to hide their incomes from the state in every possible way, who does nothing for them. It is necessary to plan state policy in such a way that conditions for the rapid growth are created for basic locales, possessing good potential and favorable natural and economic characteristics.

Today these are: investment risks insurance on the basis of the warranty funds system, state support of leading enterprises on the world share and commodity markets, involvement of the state in financing advanced scientific directions. Different aspects of the state support should be provided first of all to those enterprises and locales, which play a key role in ensuring economic safety of the state and raising of national economy.

The support of locales possessing good potential possibilities will not demand large financial expenditures, but will allow achieving stabilization and raising of economy of all the country faster. Thus the possibilities of an inter-regional reallocation of resources and conditions for self-development of lagging locales will increase.

Thus, the regional policy in conditions of Russia can not be restricted to allocation of meager subsidies to lagging locales. Its principal task - to mobilize possibilities of usage of richest resources and various conditions of locales for receiving maximum economic effect and to minimize negative developments of regional crises.

On the territories, which are found in especially complicated conditions due to objective reasons of their geographical position (in particular, regions of Far North and regions, equaled to them, radioactive zones, Kaliningrad area, other remote locales) the following is important: privilege conditions of economic activities, including lowering of the rates of value added tax, grant of tax "vacation" to new firms and under certain conditions - creation of the free economic zones with customs privileges.

One of major conditions of speeding of process of the underdeveloped locales economy raising is the fiscal policy revising. Everyone understands that the acting tax system kills any production, including small businesses, which could develop in any underdeveloped locale. But some authorities do not want to make an important modification - to redirect a tax system on rental payings. Rise of the rent for the natural resources usage and its paying on the place of their extraction would provide fairer territorial allocation of the budgetary incomes. Besides we think, that it is necessary to introduce territorial rent depending on the location of firms into a system of such payings, alongside with the rent on natural resources. It is proved that firms and corporations of large cities have the additional income not less than 10 % in an industrial sphere and more than 20-25 % in the sphere of services. As all the infrastructure of these cities have been forming with involvement of the state within many decades, it is quite reasonable to withdraw a part of this excess profit and to transfer it to the Fund of regional development, the means of which could be spent on creation of the infrastructure of underdeveloped regions.

Federal target programs are one of the main items in the list of the currently in force methods of territorial development regulating. However they imitate the activity of Government rather than bear real administrative functions. At first, the financing of planned measures is made within the limits of 10-20% that destroys the program in the first year of its existence. Secondly, the numerous branch, social and ecological programs are not coordinated. As a result diverse measures even in case of their realization do not promote complex development of the economy of a locale and can do harm instead of favor.

It is necessary to change this faulty practice and to proceed to working out target programs providing complex economic and social development of locales including the mechanism of engaging the investments primarily at the expense of the means of firms and credit resources.

Regional problems cannot be solved, without knowing a long-term perspective and without having calculated possible long-term consequences. Therefore scientific justifications of development and the productive forces allocation as in scales of the state and each subject of Russian Federation should be basis for regional policy.

At the same time with the liquidation of planning the system of before plan justifications which have been defining ways of solution of the locales development problems for 15-20 years was destroyed. We shall be based on the necessity to repair a system of forecasting scientific justifications of social and economic development. It should include regional researches, considering different variants of long-term territorial development of Russia and defining most expedient directions of economic and social development of each locale of the country.

Financing of such works is a business of the state; it can not be given to the market elements. At the same time drafts themselves should be made by scientific organizations on a competitive basis.

Strengthening of the state regulation of territorial development can not be provided without profound reorganization of the system of state control bodies. Effective vertical of power is absent today, and the Ministry of finance of Russian Federation is the main federal center tightly interacting with the subjects of Russian Federation. Such situation results in further growth of the role of a financial sphere.

We think, that on the basis of the Ministry of economy of Russian Federation an institution of power should be created which would consider problems of reproduction in a whole on the macro level and could work with locales accordingly. Thus we talk not about directive scheduling restoring. To define main proportions and priorities providing rapid economic growth, social development and national safety is a principal task of this body. The methods of realization of such priorities can be different, including pure market methods.

Precise differentiation of authorities between federal and regional governments in the part of economic activities regulation and social guarantees ensuring is necessary. Respecting already articulated by the legislation principles of ensuring of common economic space existence on all territory of the country provided by the concentration of appropriate functions in the Center, it is expedient to extend authority of regional and local (municipal) authorities on the land use system, protection of the rights of customers, regulating of the real estate market having regional specificity and immediately connected with ensuring of needs of the population. In the whole the structure of vertical administration and the allocation of functions on regional levels should be created being based on interests of the state and citizens of Russia, which should be provided on the territory of all the subjects of Russian Federation.

Changing of administrative - territorial structure of Russia

Having proclaimed federated state, the reformers have made nothing to perfect the territorial structure of the state. In the conditions of centralized economy a big number of administrative units did not hinder their economic development, as the locales had no serious rights in economical and financial sphere, and the majority of budgetary resources was distributed by the center, being based on national problems. With the transition to market relations and delegation of authority on development of the whole social sphere in locales the situation has changed completely. Now it is required, that each subject of Russian Federation should have sufficient tax base for the incomes of its budget, but for this purpose an appropriate economic potential is necessary.

Other aspect - political - is not less important. In conditions of the unitary state the electoral quotients of territorial formations in national bodies had no principled value, as representative bodies had in essence formal functions. Now the chambers of parliament pass the laws causing immediate effect on the economy of this or that locale. In these conditions the situation when the electoral quotients of locales are tens times different among themselves depending on size and status of the subject of Russian Federation is completely absurd.

We consider, that the state consisting of 89 subjects of federation of six types (republic, krays, area, autonomous area, autonomous region, city of federal value), which differ greatly in what concerns population, economic potential and possibilities of development, can not exist and develop successfully for a long time.

Our program is based on the fact that Russia will become more controllable, if 20-22 territorial units with a population from 5 up to 10 million people each and approximately equal economic potential are created on its territory. It will allow liquidating huge gaps in levels of development of locales, decreasing the necessity of an inter-regional reallocation of resources, creating the conditions for a civilized solution of interethnic problems, turning on the mechanisms of self-development of each locale. The wholeness of the state will only win, the society will become more consolidated.