Kornai János: “Excerpts from Ten Years After ‘The Road to a Free Economy’. The Author’s Self Evaluation,“ Transition, April 2000, Vol. 11, No. 2, pp. 3-5. Original: 6.72, in English: 2001.
the Russian economy to be stronger in five years, while about 40 percent expect performance to be the same as it currently is. • Moderate economic growth is likely over the next 10 years. In contrast to the short run, respondents are relatively sanguine about Russia’s economic growth over a 10-year horizon. Very few expect past declines to continue, twothirds expect the average rate of growth to be about 1-3 percent a year, and 21 percent expect the annual rate of growth to reach 3-6 percent. The experts polled thus predict that Russia is likely to resume moderate to respectable economic growth in the next decade. • Putin may be good for Russia’s economic growth. Fully 60 percent of the respondents believe that Vladimir Putin will be a positive change agent for Russian economic growth. This is a strong but not unanimous endorsement by the experts: 30 percent of those polled hold the opposite view. • The new Russian president should focus on establishing the rule of law, eliminating corruption, collecting taxes, and encouraging private firms. M ost respondents identify the establishment of the rule of law as by far the most important priority. Yet 70 percent of them also indicate that it is unlikely that meaningful reform will be carried out in this area. The elimination of corruption and the institution of an effective system for collecting taxes are also deemed to be important policy initiatives by a majority of those surveyed. Interestingly, while almost all respondents indicate that the elimination of corruption is unlikely, half think that Russia will probably institute an effective system for collecting taxes. • Russia represents a good investment in the natural resources and telecommunications sectors. Overall, the experts are by and large neutral on Russia as an investment opportunity. However, in the areas of natural resources and telecommunications, they tend to view Russia as a good investment opportunity. Consumer goods production and sales are viewed as a neutral investment opportunities, while financial services and producer goods production and sales are rated as areas that represent somewhat unfavorable opportunities. • Increasing incentives for FDI is the most productive form of external assistance. Almost two-thirds of the respondents identify increasing incentives for FDI as the most productive form of external assistance for Russian economic growth. More than a third are in favor of technical (but not financial) assistance, and more than 20 percent believe that maintaining financial assistance through the international financial institutions would be most fruitful. Very few experts favor direct financial assistance from the United States or significantly higher levels of financial assistance from the international financial institutions. • Russia will be relevant for global political stability but not for global economic stability or growth in the short and medium term. The experts believe that during the next five years Russia’s political and economic stability will be relevant, though not highly relevant, for global political stability. However, they do not see Russia’s stability as being relevant for either global economic stability or global economic growth. In the short term, Russia is hence viewed as having the potential to destabilize the world politically, but its economy is considered too unimportant to affect the global economy. • Russian economic growth and stability should be a high priority for the next U.S. president. Almost 60 percent of the respondents believe that Russian economic growth and stability should be a high or very high priority for the next U.S. president. This presumably reflects their belief that Russia’s economic stability and well-being have global political ramifications and that the President of the United States is a key player in interaction with Russian policymakers. Summing up, our survey indicates that Russia’s transition has fallen short of expectations, but that the new president is expected to turn the country around. While only a sizeable minority of our experts believe that the president will establish a rule of law, a large number feels that he will improve the collection of taxes and encourage the development of new private firms. Russia's economy is likely to improve over the next 5 years and register moderate to possibly respectable rates of growth over a 10-year horizon. Presently, Russia represents a good investment opportunity only in natural resources and telecommunications, the number of attractive investment opportunities will presumably increase overtime. Providing incentives for foreign investment is seen as the most productive form of external assistance. In the shortterm, Russia will be important politically but not economically on the global scene. The new U.S. president should place high priority on economic growth and stability in Russia. Jan Svejnar is the executive director of the William Davidson Institute and the Everett E. Berg Professor of Business Economics at the University of Michigan Business School. mi Transition, April 2000 The World Bank/The William Davidson Institute/Stockholm Institute for Transition Economies © 2000 Contents of WDI Conference on Accounting in Transition and Emerging Economies 25 Markets, Human Capital, Inequality: Evidence from Rural China 26 Recent Working Papers 27 Upcoming Davidson Institute Research Conferences 28