Russia Moves to Increase Productivity by 50%
Published: July 11, 2014 (Issue # 1819)
In an effort to transform Russia's oil-dependent economy into a sustainable engine of growth, the government has unveiled a series of legal and financial measures aimed at fulfilling President Vladimir Putin's ambitious pledge to increase Russia's labor productivity 50 percent by 2018.
Approved Wednesday and published online Friday, the government's plan dictates a series of equally ambitious industry benchmarks that would see productivity in the aviation industry more than double by 2018. Productivity at small and mid-size industrial enterprises is intended to climb by nearly 50 percent, while productivity in construction is expected to rise by 30 percent.
These targets far exceed the government's earlier forecast for the same period, which anticipates productivity as a whole rising just 1.1 percent in 2014, 2.1 percent in 2015 and then gradually escalating to a total increase of about 13 percent by the end of 2018.
Productivity in Russia is now less than half that of Germany, less than 40 percent that of France and just 28 percent that of the U.S., although it still exceeds the levels of China, Brazil and India, according to a study published in April by the Plekhanov Russian University of Economics.
State attention has been firmly fixed on the issue since 2012, when Putin during his third inauguration set the government the formidable task of raising productivity 50 percent across the Russian economy by 2018.
But so far progress has been slow, with productivity economy-wide rising just 3.8 percent in 2012, according to the study.
In May, Putin once again called for a drastic overhaul of Russian industry as the key to sustainable economic growth.
"Russia needs a real technological revolution, a serious technological renewal, we must perform the most sweeping technological upgrade of our enterprises in the last half decade," Putin said in a speech to domestic and foreign business leaders at the St. Petersburg International Economic Forum.
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