The Strategy of the Silk Road Economic Belt and Ensuring Russia’s Economic Security

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This article is the republished version of:

The Strategy of the Silk Road Economic Belt and Ensuring Russia’s Economic Security

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Notes

1. For more detail see D.V. Gordienko, “Perspektivy izmeneniia urovnia ekonomicheskoi bezopasnosti Kitaia pri realizatsii strategii ekonomicheskogo poiasa Shelkovogo puti,” in Kitai v mirovoi i regional’noi politike. Istoriia i sovremennost’. Vypusk XXI: ezhegodnoe izdanie, ed. E.I. Safronov (Moscow: IDV RAN, 2016), pp. 234–55. The Shanghai Cooperation Organization (SCO) is an international organization founded in 2001 by the leaders of China, Russia, Kazakhstan, Tajikistan, the Kyrgyz Republic, and Uzbekistan. The organization’s main objectives are reinforcement of stability and security in the wide expanse uniting the member countries, the fight against terrorism, separatism, extremism, and the drug trade, development of economic cooperation, energy partnerships, and scientific and cultural interaction. At present, the following are SCO members: India (the procedure for admission into the SCO was launched in July 2015), Kazakhstan, Kyrgyz Republic, People’s Republic of China, Pakistan (the procedure for admission into the SCO was launched in July 2015), Russia, Tajikistan, and Uzbekistan. Observer countries include Afghanistan, Belarus, Iran, and Mongolia. Dialogue partners include Azerbaijan, Armenia, Cambodia, Nepal, Turkey, and Sri Lanka. For more detail see, for example, D.V. Gordienko, “Shankhaiskaia organizatsiia sotrudnichestva kak ploshchadka dlia dialoga po voprosam regional’noi bezopasnosti,” Natsional’nye interesy: prioritety i bezopasnost’, 2015, no. 37 (322), pp. 44–66.

2. The term was introduced by the German geographer Richthofen in 1877. The Great Silk Road was built in the second century B.C. and extended from Xian through Lanzhou to Dunhuang, where it forked. The northern road went through Turfan, crossed the Pamirs, and proceeded to Fergana and the Kazakh steppe. The southern route went past Lake Lop Nur, along the southern edge of the Taklamakan Desert, and across the Yarkand River and the Pamirs (in the South). It then went to Bactria, and from there to Parthia, India, and the Middle East right up to the Mediterranean Sea. Iu.V. Zhilkina, “Mezhdunarodnaia bezopasnost’ v epokhu globalizatsii mirovoi ekonomiki,” Natsional’nye interesy: prioritety i bezopasnost’, 2010, no. 25, pp. 62–67; Minekonomrazvitiia RF, Prognoz sotsial’no-ekonomicheskogo razvitiia Rossiiskoi Federatsii na 2016 god i na planovyi period 2017 i 2018 godov, 2015; V.M. Kul’kov, S.V. Kaimanakov, and I.M. Teniakov, “Ekonomicheskii rost v Rossii: natsional’naia model’, kachestvo i bezopasnost’,” Natsional’nye interesy: prioritety i bezopasnost’, 2014, no. 38, pp. 9–19; G.S. Vechkanov, Ekonomicheskaia bezopasnost’ (Saint Petersburg: Vektor, 2005).

3. Globalization is an action or condition encompassing the entire world by its scale or application (E.E. Rumiantseva, Novaia ekonomicheskaia entsiklopediia, second edition [Moscow: INFRA-M, 2006], p. 106). V.V. Smirnov, “Paradigma i kontseptsiia ekonomicheskoi bezopasnosti Rossii,” Natsional’nye interesy: prioritety i bezopasnost’, 2013, no. 46, pp. 8–19; V.A. Dvoriankov, Ekonomicheskaia bezopasnost’. Teoriia i real’nost’ ugroz (Tyumen: Izdatel’stvo TiumGU, 2007); Ekonomicheskaia i natsional’naia bezopasnost’: Uchebnik, ed. E.A. Oleinikov (Moscow: Ekzamen), 2004; D.V. Gordienko, “Vliianie mirovogo finansovo-ekonomicheskogo krizisa na izmenenie urovnia ekonomicheskoi bezopasnosti Rossii,” Natsional’nye interesy: prioritety i bezopasnost’, 2010, no. 35, pp. 46–68; V.K. Senchagov, B.V. Gubin, V.I. Pavlov, et al., Global’nyi finansovyi krizis: bezopasnost’ finansovoi sfery Rossii (Moscow: IE RAN, 2010); D.V. Gordienko and N.G. Iakovleva, Mirovoi finansovo-ekonomicheskii krizis i obespechenie ekonomicheskoi bezopasnosti gosudarstva: Monografiia (Moscow: ARGAMAK-MEDIA, 2013); D.V. Gordienko and M.S. Safonov, Ekonomicheskaia bezopasnost’ Rossii. Teoreticheskii i metodologicheskii aspekty: Monografiia (Moscow: Prospekt, 2016).

4. As part of this concept, there are plans for an integrated Eurasian transport system based on the Trans-Siberian and Baykal–Amur railroads.

5. Northern (China–Central Asia–Russia–Europe), central (China–Central and Western Asia–the Persian Gulf and the Mediterranean Sea), and southern (China–Southeast Asia–South Asia–the Indian Ocean). For more detail see D.V. Gordienko, “Perspektivy izmeneniia urovnia ekonomicheskoi bezopasnosti Kitaia pri realizatsii strategii ekonomicheskogo poiasa Shelkovogo puti,” in Kitai v mirovoi i regional’noi politike. Istoriia i sovremennost’. Vypusk XXI: ezhegodnoe izdanie, ed. E.I. Safronov (Moscow: IDV RAN, 2016), pp. 234–55.

6. Nevertheless, there was official acceptance of the need to transition to a new model of growth, and this issue was intensively discussed over 2011–2012 as part of work on Strategiia-2020.

7. For more detail see D.V. Gordienko and M.S. Safonov, Ekonomicheskaia bezopasnost’ Rossii. Teoreticheskii i metodologicheskii aspekty; Monografiia (Moscow: Prospekt, 2016).

8. The following were introduced in particular: unsecured auctions, depositing of budget resources with commercial banks, and the implementation of measures to prevent the flow of personnel funds from banks. In this connection, it is important to note that unlike, for example, the United States, Russia supports banks not by issuing money but by accumulating gold and currency resources.

9. In 2009, the aggregate volume of state support included in anti-crisis measures was at least 800 billion rubles.

10. For reference: Capital flight is calculated using the IMF methodology and is the total of “trade credit and advances,” “export income not received by the due date and goods and services that have not been provided against the transfer of monetary resources pursuant to import contracts,” and “net errors and omissions.” For more detail see D.V. Gordienko and M.S. Safonov, Ekonomicheskaia bezopasnost’ Rossii. Teoreticheskii i metodologicheskii aspekty: Monografiia (Moscow: Prospekt, 2016).

11. Without small enterprises, banks, insurance organizations, and budget institutions.

12. The specific weight of organizations carrying out technological innovations with respect to all industrial organizations has almost not changed at all since 2000 (2012, 9.9 percent). The total amount spent on research and development has been stable at 1.5 percent of the GDP (with an increase in budget appropriations and a reduction in private resources and foreign financing)—preparation for the Asia-Pacific Economic Cooperation Summit and for the 2014 Olympics and construction of the Nord Stream pipeline and Eastern Space Center. It was officially acknowledged that with respect to Russia’s socioeconomic development, the conservative (not the innovative) scenario is the most likely. This scenario predicts that our country’s economic dynamics will lag those of the world until 2020.

13. In annual terms, the consumer price index rose by 6.8 percent in 2013 (and by 5.1 percent in 2012).

14. The GDP growth rate decreased by more than half, and the volume of goods produced and services rendered decreased by 0.9 percent in the basic sectors of the economy, by 0.2 in industry, and by 6.4 in construction. Foreign trade turnover decreased by 0.7, and investments fell by 7 percent. For the first time since 1999, real disposable monetary incomes decreased (by 1.5 percent).

15. Industrial production fell by 3.4 percent in 2015. Above all, production decreased in the light industry and the following industrial sectors: the construction, machine-tool, machine-building, and automobile sectors. In particular, cement production decreased by 10 percent, brick production decreased by 8 percent, car production decreased by 27.7 percent, bus production decreased by 17 percent, truck production decreased by 14.7 percent, and freight car production fell by more than half.

16. For reference: The standards of the Third Basel Accord specify, in particular, observance of standards by banks: sufficiency of base and surplus capital, short-term liquidity (Liquidity Coverage Ratio), calculation and disclosure of financial leverage, and calculation of risk related to credit quality (Credit Value Adjustment).

17. According to data from the Federal State Statistics Service of the Russian Federation, the Bank of Russia: the Federal Treasury of the Russian Federation.

18. Approved by the government of the Russian Federation, May 14, 2015.

19. It appears that with respect to Russia’s economic security within the framework of economic patronage, the following indicator and parameter values could correspond to Russia’s absolute economic security: a volume of the gross domestic product (GDP) that is no less than $5059 billion (PPP in 2003 prices); a gross grain harvest that is no less than 140 million tonnes (mass before processing); investments in fixed capital that are no less than 60 percent of GDP; defense spending that is no less than 5.83 percent GDP; expenditures on civilian science that are no less than 4.8 percent of GDP; innovative production that accounts for no less than 98 percent of industrial production; machine building and metal processing that account for no less than 66 percent of industrial production; persons with monetary incomes lower than the subsistence level that account for 0 percent of the country’s total population; a decile coefficient for income differentiation of 1; an unemployment rate that is less than 3.907 percent of the economically active population; monetization that is no less than 250 percent of GDP; internal debt and external debt that are 0 percent and 0 percent of GDP, respectively; budget expenditures on servicing government debt that are 0 percent of the total budget expenditures of the central government; a budget deficit of the central government that is less than 1.97 percent of GDP; inflation of 1.38 percent; gold and currency reserves of no less than $5470 billion; a ratio of payments on external debt to annual exports that is 0 percent; and imported food products that account for 0 percent of the total volume of food resources.

20. V.V. Smirnov, “Paradigma i kontseptsiia ekonomicheskoi bezopasnosti Rossii,” Natsional’nye interesy: prioritety i bezopasnost’, 2013, no. 46, pp. 8–19; D.V. Gordienko and N.G. Iakovleva, Mirovoi finansovo-ekonomicheskii krizis i obespechenie ekonomicheskoi bezopasnosti gosudarstva: Monografiia (Moscow: ARGAMAK-MEDIA, 2013); Ezhegodnik SIPRI 2015. Vooruzheniia razoruzhenie i mezhdunarodnaia bezopasnost’, Nauchnoe izdanie, trans. from English (Moscow: IMEMO RAN, 2016); S.M. Drobyshevskii, E.V. Sinel’nikova, A.V. Sorokina, et al., Mezhdunarodnyi opyt antikrizisnoi politiki (Moscow: Delo, 2010); V. Zavadnikov, “O konstruktivnoi ekonomicheskoi politike pravitel’stv (vlastei) v period krizisa,” Ekonomicheskaia politika, 2009, no. 2, pp. 5–11; A. Kudrin, “Vedushchie strany v global’noi ekonomike,” Ekonomicheskaia politika, 2011, no. 5, pp. 5–8; A. Pestova and M. Mamonov, “Otsenka vliianiia razlichnykh shokov na dinamiku makroekonomicheskikh pokazatelei v Rossii i razrabotka uslovnykh prognozov na osnove BVAR-modeli rossiiskoi ekonomiki,” Ekonomicheskaia politika, no. 4(11), pp. 56–92; A. Kudrin and E. Gurvich, “Novaia model’ rosta dlia rossiiskoi ekonomiki,” Voprosy ekonomiki, 2014, no. 12, pp. 4–36; P. Trunin and N. Vashcheliuk, “Analiz nestandartnykh instrumentov predostavleniia likvidnosti Banka Rossii,” Ekonomicheskaia politika, 2015, no. 1(10), pp. 41–57.

21. It is assumed that the lowest possible value for the ith normalized individual indicator of a country’s economic security (an indicator that characterize the country’s economic security achieved within the framework of economic patronage), β_i, _min = 0.01, corresponds to the lowest level of a country’s economic security with the remining individual parameters–indicators kept constant. In contrast, the highest value i of the normalized individual indicator, β_i, _max = 100, corresponds to the country’s highest economic security, also with the remaining individual indicators–parameters kept constant. The unit value for the ith normalized individual indicator of a country’s economic security β_i = 1 corresponds to the threshold value for the country’s economic security within the framework of economic patronage.

22. V.V. Smirnov, “Paradigma i kontseptsiia ekonomicheskoi bezopasnosti Rossii,” Natsional’nye interesy: prioritety i bezopasnost’, 2013, no. 46, pp. 8–19; S.M. Drobyshevskii, E.V. Sinel’nikova, A.V. Sorokina, et al., Mezhdunarodnyi opyt antikrizisnoi politiki (Moscow: Delo, 2010); V. Zavadnikov, “O konstruktivnoi ekonomicheskoi politike pravitel’stv (vlastei) v period krizisa,” Ekonomicheskaia politika, 2009, no. 2, pp 5–11; P. Trunin and N. Vashcheliuk, “Analiz nestandartnykh instrumentov predostavleniia likvidnosti Banka Rossii,” Ekonomicheskaia politika, 2015, no. 1(10), pp. 41–57.