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Inclusive Growth and Regional Sustainability of Russia

Abstract

The article presents a methodology for assessing inclusive growth in Russian regions by constructing an integral index. We sought to understand how economic growth, based on high energy prices over several years, led to a smoothing of inequalities and reduction in poverty and environmental pressures in regions, as well as the nature of the trends in recent years. It was revealed that a number of developed regions, e.g., Leningrad, Tyumen, Kaluga, Voronezh, Moscow oblasts, the Republic of Tatarstan, and St. Petersburg, significantly improved their indicators from 1998 to 2016, especially in the area of increased life expectancy and household incomes, while reducing environmental load. However, from 2012 to 2015, the value of the inclusive growth index in Russia decreased to the 2007 level, and its differentiation between regions sharply increased. The results of a decade of work to improve the sustainability and uniformity of regional development were partially nullified. In 2016, the value of the index recovered to the 2011 level. To substantiate political recommendations, it is important that regions in which economic growth was accompanied by positive externalities in the social and environmental spheres were more resistant to external shocks. The developed index can further be used for a comprehensive assessment of the socioeconomic development of regions from the aspect of sustainability and inclusiveness.

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Notes

  1. 1.

    See: The Inclusive Growth and Development Report 2017. http://reports.weforum.org/inclusive-growth-and-development-report-2017/.

  2. 2.

    See: The Inclusive Development Index 2018. https://www.weforum.org/reports/the-inclusive-development-index-2018.

  3. 3.

    It is believed that growth of risks (natural, technological, social) and future uncertainty led to popularization of the terms “resilience” and “vulnerability” [22]. Whereas in the 1980s–1990s, the main slogan of integrated socioeconomic research was “sustainable development” associated with inexhaustible resource management and self-supporting development without compromising future generations, in the 2000s–2010s, this function was resilience, the ability to withstand external shocks and recover from them.

  4. 4.

    See: Transforming our world:the 2030 Agenda for Sustainable Development. https://sustainabledevelopment.un.org/ index.php?menu=2361. See also [9].

  5. 5.

    See: InclusiveGrowth (2014). OECD. https://www.oecd.org/mcm/IG_MCM_ENG.pdf.

  6. 6.

    See: Transforming our world: the 2030 Agenda for Sustainable Development.

  7. 7.

    See: Sustainable Development Goals. https://sustainabledevelopment.un.org/?menu=1300.

  8. 8.

    See: Transforming our world: the 2030 Agenda for Sustainable Development.

  9. 9.

    See: The InclusiveGrowth and Development Report 2017.

  10. 10.

    See: The InclusiveDevelopment Index2018.

  11. 11.

    See: The InclusiveGrowth and Development Report 2017.

  12. 12.

    Moreover, modern automation processes designed to significantly increase labor productivity increase risks of technological unemployment. The experience of Tolyatti-based OJSC AvtoVAZ with automation, where the number of employees decreased from 110 000 to 35 000, confirms such concerns, hence the importance of taking into account the employment level in an integral index.

  13. 13.

    We did not use wage estimates due to distortions related to development of the informal economy and partial concealment of wages for tax evasion.

  14. 14.

    The debt burden in Russian regions significantly depends on the structure of the debt portfolio. However, in the current institutional system, the negative consequences of a high debt burden are not obvious: debts are being restructured, in fact, a region cannot be declared bankrupt. Moreover, regional revenues create conditions and opportunities for sustainable self-development in the future.

  15. 15.

    In part, the increase in the share of people with incomes below the subsistence minimum is due to a change in 2012 in calculating the basket of consumer goods used to determine the cost of living. However, these statistical corrections are necessary due to changes in the purchasing power of the population, changes in the structure of consumption, etc. Adjustments are made every 5 years.

  16. 16.

    We consider the period 1998–2015, since 2015 was the year of the largest decline in the inclusive growth index since 2007, and, in accordance with the hypothesis, we need to understand how economic growth affected regional stability.

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Correspondence to V. A. Barinova or S. P. Zemtsov.

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Barinova, V.A., Zemtsov, S.P. Inclusive Growth and Regional Sustainability of Russia. Reg. Res. Russ. 10, 10–19 (2020). https://doi.org/10.1134/S2079970520010025

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Keywords:

  • sustainable development
  • social development
  • environmental development
  • inequality
  • resilience
  • people’s incomes