www.roscongress.org/materials/natsionalnye-proekty-rossii-problemy-i-resheniya/
Bednyakov A.S., Mierin L.A. 1
NATIONAL PROJECTS OF RUSSIA: PROBLEMS AND SOLUTIONS
Abstract. The article gives historical insight into application of national projects in Russia and abroad
for the development of national economies, analyzes effectiveness of national projects and state programs in
modern Russia, identifies a range of problems associated with investment attractiveness of national projects
and proposes ways to resolve these problems.
Keywords. State programs, national projects, federal target programs, infrastructure, public-private
partnership, investment attractiveness
National projects as a tool for implementation of national goals
The problem of implementation of national projects both in Russia and abroad is very topical, and at the same
time has a long history.
There is no generally accepted, established concept of "national project" today. As international
experience shows, national projects are understood as complex programs of national importance which require
large-scale investments of public funds: the development of space, nuclear and hydro-energy, upgrading entire
industries, such as health care, to a new level, recently – the development of artificial intelligence and other
strategically important areas in which it is impossible to provide 100% private funding at the initial stage.
Thus, national projects are a tool for the implementation of national development goals, which have
priority at a certain stage of development of the state and require significant resources, assuming a clearly
defined end result. For example, as it was during the industrialization of the country.
Depending on the stage of development of the state, the state of its budget and the level of development
of entrepreneurship, private investors may be involved in such projects, which is expressed in the development
of projects using models of public-private partnership.
Speaking about cooperation of the state with private investors in the implementation of large-scale
national projects, representing the most important aspect of the development of the Russian economy at the
current stage, we can provide many successful examples of such a partnership from the history of other
countries. For example, in the seventeenth century France has resorted to the use of the concession for the
construction of canals (Canal du Midi). Around this time, public-private partnership models are beginning to
be applied in the UK and the North American continent. In Russia, this form of implementation of major
infrastructure projects begins to be actively used at the turn of the XIX-XX centuries, especially in relation to
the construction of railways (for example, the Trans-Siberian railway).
In the XX century, the theme of national projects receives special meaning, associated with tectonic
changes in the political systems of countries, including Russia, the two world wars and the need for huge
investments to restore the national economy, often unbearable for countries. For example, thanks to the launch
of national projects with the participation of private capital (NEP program), during 20s of the XX century young
Soviet state was able to modernize all sectors of its industry, to raise the level of qualification of its labor force,
to reduce unemployment.
In the 80s of XX century the USA implemented a major upgrade of its energy industry thanks to the
"agreements on purchase of electricity" (the prototype of one of PPP models "Build-Transfer-Operate"). In UK,
the PFI (private finance initiative) infrastructure project model is beginning to be widely used, which has
rapidly spread to other developed countries – the European Union, the United States, Canada, Japan, Australia.
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© Andrey Bednyakov, Larisa Mierin, 2019
1
Nowadays, the topic of national projects abroad is no less relevant and affects both sectors of the economy
that have become traditional (the development of space, energy, social sphere) and new areas (such as the
development of artificial intelligence). At the same time, in many countries, the role of attracting private capital
through PPP mechanisms is increasing. In this regard, it is important to find the optimal balance in the
distribution of costs between the public and private partners, which will provide financing for projects and
which can vary from country to country, from industry to industry, taking into account the ratio of risks and
profitability of the launched projects. In projects close to market conditions, the role of the state may be lower.
In projects that do not allow to extract the required private business profitability, the role of the state increases.
For example, government funding for national projects in India is at 90 per cent. In other, more advanced and
less risky markets, it can be significantly lower.
Practice of application of state programs and national projects in present Russia
During the period of development of the Russian Federation, after the collapse of the Soviet Union, the
theme of national projects took different shapes and organizational forms of management. The state constantly
tried to find the most optimal forms of investment in large-scale projects and to attract private investors to these
projects.
Since 2002, Federal Target Programmes have been prepared and adopted. In 2005, the launch of four
Priority National Projects "Affordable and comfortable housing for Russian citizens", "Development of agro industrial complex", "Health" and "Education" was announced. In 2010, the Federal Programs were
transformed into the State Programs, including due to failure to implement many of the objectives of the Federal
Programs. In 2012, 11 "May" Presidential Decrees were signed, aimed at developing priority areas for the state
with defined targets to be achieved by 2018 or 2020. In 2016, there was a reorganization in the field of strategic
project management in the form of the creation of the Council for Strategic Development and Priority Projects,
the Department of Project Activities of the Government of the Russian Federation and the abolition of two
other advisory bodies. The list of 11 main directions of strategic development of the Russian Federation for the
period up to 2018 and up to 2025 served as the basis for the preparation of 29 Priority Projects. Management
of a number of previously adopted state programs had been reshaped to comply with project management
principles.
An analysis of the implementation of the national projects and state programmes described above shows
that, regardless of the format in which they were prepared and the organizational structures established to
manage these projects/ programmes, the set targets were often not achieved or were achieved with long delays
[1]:
• the increase in annual volumes of housing construction in Russia up to 80 million square meters per
year was reached only in 2014 and not in 2010 as planned
• National Project "Development of agriculture" was not implemented across all three areas and was
transformed into the State Program of Agricultural Development
• Life expectancy at the end of 2018 was 72.84 years while established target was 74 years
• The share of high-tech and knowledge-intensive industries in GDP was supposed to be 30% in 2018,
and was equal to 21.7% in 2017
• The number of high-productivity jobs is expected to reach 25 million in 2020 and accounted for
only17.6 million in 2017
Treasury implementation of national projects and state programmes has been and is irregular, which also
affects the results achieved and the quality of work performed.
Of course, we can not completely deny the positive contribution of state programs to socio-economic
development of the country and to improving its defense potential [1]:
• the share of modern weapons and equipment in the Russian army has increased many times
• the share of Russian scientific publications in international scientific journals exceeded the target
• at the end of 2018, Russia ranked 31st in the world Bank's business environment ranking (in 2012 it
was 120th), which can be called successful, despite the fact that the target was 20th place
• the level of equipment of educational institutions and healthcare institutions, social support of the
population in these areas has also significantly improved
The analysis of the implementation of national projects and state programmes is extremely important in
terms of improving the efficiency of public administration and shows that there is still great potential in many
areas. In this regard, it is interesting both from a scientific and practical point of view to study the factors
influencing the level of success of certain national projects/ state programs. Such factor analysis will allow to
reach a significantly higher level of state planning and management, which should have a positive impact on
the socio-economic situation in the conditions of internal and external restrictions, and to improve the standard
of living of citizens, regardless of these restrictions.
Analysis of success of government programs and their investment attractiveness: problems and solutions
In our opinion, there are three main groups of reasons for non-fulfillment of state programs/ national
projects in the Russian Federation:
1) Systemic management problems.
The transition of the public administration system from the planned mechanism to the market model was
spontaneous, the changes were carried out spontaneously. The current management system requires periodic
intervention of the country's top leadership, as a result of what it was called "manual control system". Therefore,
the successful implementation of national projects requires an understanding of how this institution should
interact with other existing institutions of governance, how to "embed" it in existing management relationships.
As noted above, the Council for Strategic Development and Priority Projects, as well as the Department
of Project Activities of the Government of the Russian Federation were approved as permanent bodies of
project management in Russia on October 15, 2016. However, it requires not just the addition of new links in
the management system, but its radical reconstruction, taking into account both own previous experience of
large-scale projects management (obtained during the existence of the USSR) and foreign experience (for
example, the experience of China).
The lack of a full-fledged cross-cutting strategic planning system that takes into account inter-sectoral and
inter-regional linkages is now demonstrating a clear institutional weakness in the management system.
2) Poor quality of planning during establishment of a system of indicators of programs and projects.
Speaking about this reason for the non-fulfillment of state programs/ national projects, we can say that it
is methodological in nature and with a systematic approach can be easily remedied. It seems appropriate to
make a reference to the study on this topic, conducted by K. Ya. Serkova [2], which adequately describes all
the components of the problem and provides suggestions for their solution. Also, these issues are discussed in
[3,4,5].
3) Motivational issues.
The success of national projects, as experience shows, is directly determined by how they are perceived
by the main groups of actors: the national elite, the population and business.
The specifics of the current situation in Russia is that, in contrast to developed countries with actively
formed netocracy, the intellectual elite is poorly represented, dominated by the business elite, not associating
themselves and their interests with the development of the country. This is what the process of brain and capital
drain out of the country demonstrates.
In our opinion, the increasing economic inequality of different segments of the population hinders the
effectiveness of national projects.
At first glance, the existence of a unifying national idea could solve this problem. As history shows, the
unifying power of the national idea is particularly strong in critical moments for the state, such as revolutionary
situations, and periods of military conflicts with other states. It is unlikely that today, in the era of globalization,
despite international tensions, this tool can be applied to the issue of improving the effectiveness of
implementing national projects. At least, an attempt to actively develop a national idea, undertaken in the last
decade in the Russian Federation, with the involvement of a large group of representatives of the general public,
despite the publication of a multi-volume work on this topic, eventually failed [6]. The statement "Russia must
exist forever" put forward as a national idea can hardly be considered a successful result.
In this regard, high importance in the success of national projects and government programs is the
motivation for business, being an integral and one of key participants, which in turn depends on investment
attractiveness of these projects and programs.
It is worthwhile mentioning that low investment attractiveness of both the country and state investment
projects is deep and strategic. These are the issues that were discussed in detail at the St. Petersburg
International Economic Forum in 2019 and in previous years, during other summits, as well as in scientific and
periodic literature.
Taking into account the whole array of available knowledge and the analysis, it seems reasonable to
identify the following five key groups of problematic factors affecting the level of investment attractiveness of
state programs/ national projects, which should be subject of active work by the state:
1)
2)
3)
4)
5)
Legal and judicial issues
Problems in project preparation and launch
Problems related to state influence
Problems affecting the development of entrepreneurship
The problem of negative geopolitical situation
Speaking about legislation, in the context of attracting private investments to participate in projects of
public importance, first of all we are talking about the regulation of public-private partnership. The quality of
legislation in this area requires significant improvement in such fields as rights of investors, flexibility of the
approved PPP models and public authorities, efficiency and speed of launching new projects, competitive
procedures, procedures for the conclusion, amendment and termination of agreements and others. Often, the
adopted legal acts contradict already adopted norms creating legal conflicts and economic disputes, increasing
the overall risks of working on the Russian market. The expert community is quite active in this area and has
repeatedly made proposals to legislators on the essence of this issue. These proposals are presented in sufficient
detail in the study of A. S. Bednyakov [7]. Unfortunately, despite the fact that many of the proposed changes
are positively evaluated by practitioners and state authorities, very small part of them is reflected in new
legislation.
Turning to the Russian judicial system, it is no secret that it is not reliable in the eyes of investors, and
therefore many transactions are regulated by foreign law. This is impossible or limited in PPP transactions,
which significantly reduces the interest of private investors to participate in national projects. The institution
of law is replaced by an "administrative resource", without which most projects cannot develop. Without
serious efforts to develop institutions that regulate relations between economic actors, no amount of investment
and human resources will lead to the achievement of the goals for which projects are launched.
In the same series of problems there are such questions as power pressure on businessmen and, as a result,
trust between business and the state. As Kirill Dmitriev, Director General of the Russian Direct Investment
Fund (RDIF), noted at the St. Petersburg International Economic Forum 2019, "the Business climate, the
confidence of entrepreneurs in the future, the power pressure, which has increased dramatically recently, are
big problems that we see... Trust is a key story that we need to work on in the near future" [8]. To address these
issues, it is necessary to revise the rules of criminal prosecution of entrepreneurs, which will increase business
confidence in the future, as well as narrowing the boundaries of responsibility for specific violations in order
to avoid corruption temptations. Business should be treated as an equal partner. This attitude should be
manifested in everything from the development of normative legal acts to judicial disputes.
Development and launch of projects: decisions on many investment projects are made in a "manual mode"
potentially leading to a suboptimal selection of projects and unnecessary spending of the state, there is no
transparency in launching new projects, the level of preparation of many investment projects is low and does
not meet the expectations of investors, there are no other sovereign funds similar to the RDIF. To solve these
issues the following measures are necessary:
• more active work on preliminary analysis and market promotion of "priority" projects, market testing
• creation of a mechanism for coordination of work with projects in different ministries, departments
and regions, creation of a single information portal, which will present materials on projects
implementation
• creation of new mechanisms to support project initiatives, including the creation of seed funds that
would finance development of new ideas and projects
• creation of new infrastructure funds, including those which would be based on leading financial
institutions with participation of the state
Speaking about the state influence on the launched projects and private investors, we are talking about the
insufficiency/ suboptimality of state support measures and the high tax burden. It is necessary to introduce
more systematic approach that takes into account the mutual influence of state support in various sectors, using
models of inter-sectoral balances, which should lead to more optimal distribution of state support and greater
economic effect. It is impossible not to agree with Kirill Dmitriev, who noted that "in order to attract private
investments in such projects, the state should provide a level of support that would provide a minimum level
of return to investors" [8]. It is also worth optimizing the tax burden for new investors and balancing the tax
system.
The next group of problems - problems affecting the development of entrepreneurship, include a high
level of corruption, low level of entrepreneurial activity, lack of leadership and team approach to project
implementation. To solve the first problem, it is necessary to introduce more stringent anti-corruption
legislation and its systematic application. In order to develop entrepreneurship it is necessary to carry out
systematic work related to education of new generation of citizens who would seek to become entrepreneurs
and will be ready to take responsibility for decisions.
From the point of view of negative geopolitical situation, as Dominique Strauss – Kahn, Ьanaging Director
of Parnasse SARL, said at the St. Petersburg International Economic Forum 2019, the trend of "fragmentation
of globalization" will not end in the foreseeable future" [8]. Despite this, it is necessary to continue the dialogue
with all parties, it is necessary to develop new solutions that can remove artificially created restrictions. At the
same time, it is necessary to develop and launch new tools and technologies of international economic relations
that ensure their development, despite the restrictions imposed – such as, for example, avoiding dollar
dependence in international settlements, the development of FINTECH technologies and other steps aimed at
increasing financial sovereignty, which can radically change the balance of power in the world market of trade
and investment.
Conclusion
The analysis of the success of state programs and national projects in Russia conducted by the authors of
the article shows that despite the positive contribution to the development of the economy, there is a huge
potential for increasing the success of implementing strategically important initiatives for the state. As the
history of Russia and foreign countries shows, business should play an important role in this. To attract it,
certain conditions should be created that make participation in such projects profitable and safe. In order to
increase the investment attractiveness of national projects and programs, the state needs to solve the following
tasks: to improve the quality of legal acts, radically improve the judicial system, improve the quality of project
preparation, reduce the negative impact of the state and optimize state support, develop entrepreneurship and
increase the level of financial sovereignty of the country.
LITERATURE
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(Accessed: 18.06.2019)
2. Serkova K.Ya. Problems of implementation of state programs and ways for their solution //Journal of
Economy and entrepreneurship. 2016. №12 (p.4) (Vol. 10 Nom. 12-4)— URL:
http://www.intereconom.com/archive/355.html (Accessed: 18.06.2019)
3. Gourtoueva F.A. Analysis of the problems of implementation of state programs in the Russian
Federation // Economics and business: theory and practice. 2017. №5 — URL:
http://economyandbusiness.ru/analiz-problem-realizatsii-gosudarstvennyh-programm-v-rossijskojfederatsii (Accessed: 18.06.2019)
4. Toulyakova I.V. Evaluation of the effectiveness of state programs: problems and prospects //
Fincontrol. 2017. №4 – URL: http://rufincontrol.ru/article/332551/ (Accessed: 18.06.2019)
5. Konchenkova T.N., Shanin S.A. Problems of implementation of state programs: evaluation and
practice of application // Problems and mechanisms of evaluation of efficiency of the system of state
and municipal management: theory and practice. — М., REU after G.V. Plekhanov, 2016.
6. National Idea of Russia / Under the general editorship S.S. Sulakshin. In 6 v. V. I. — M.: Scientific
Expert, 2012. — 752 c.
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Russian Federation. — M.: Publishing House "Biblio-Globus», 2017. — 150 p.
8. Investments into Russia's future: how to make national projects more attractive for investors Analytical System Recongress [Electronic resource]. URL: https://roscongress.org/sessions/spief2019-investitsii-v-budushchee-rossii-kak-sdelat-natsionalnye-proekty-privlekatelnymi-dlyainvestorov/translation/ (Accessed: 18.06.2019 г.)