The Guardian • Issue #2025

The rediscovery of economic planning in Russia

Photo: daves_archive1 (CC BY 2.0)

Is Russia rediscovering the economic benefits of planning? Judging by the material presented at the recent Eastern Economic Forum, held in Vladivostok on 5-8 September, 2022, this may indeed be the case.

For example, in Putin’s keynote speech he pointed to the economic chaos of Western capitalist countries: energy shortages, rampant inflation, economic recession, looming widespread poverty, and so on. In large part, these are the result of their own short-sighted actions and lack of ability to foresee the outcomes of these actions.

The Russian approach provides a stark contrast. Given that the Forum was focused on East Asia, the speech initially identified the fact that countries in this region of the world seek “mutual advantage, cooperation and the joint use of our economic capabilities to the benefit of our countries’ citizens.” All of this will guarantee “their dynamic long-term development, which has been growing faster than the world’s average for a long time.” Further, the speech identifies some important realities of Russia’s Far East: an abundance of raw materials and resources, full processing and refinement of these materials, twenty-five per cent growth in industrial production, and increasingly busy ports and transport corridors. In short, Russia’s Far East is set to become the gateway to Russia for Asian countries.

How is this to be achieved? The answer lies in the priority development of the Far Eastern Regions through “advanced state support” measures. These measures include revising the “Strategy for the Development of Russia’s Mineral Resources Base,” which will have an extended planning horizon up to 2050. Further, there are plans for the development of transport infrastructure, railways and roads, seaports, and pipelines.

The Russian government has drafted “roadmaps,” that will enable work to be consistent, to consolidate and coordinate efforts in terms of deadlines, and to provide capacity to break up bottlenecks. The plans continue, including master plans for developing cities, housing, upgrading transport and freight infrastructure, a consolidated Far Eastern airline, education, and medical care.

The purpose of all this planning: “all the mechanisms that we are implementing in the Far East have the same important purpose – to make this region a truly attractive place for living, studying, working.” In short, the purpose is to improve the daily lives of those who live in Russia’s Far Eastern regions.

An impressive amount of planning. Even more, there was a session at the Eastern Economic Forum entitled “Central Planning: Bringing Forces to a Special Mode.” It was chaired by Mikhail Kuznetsov, who is director of the Eastern State Planning Centre (Vostokgosplan), and it asked the following questions: given that the strategic management in the Far East is currently diverse and scattered, what is domestic and global best practice for improving and transforming Russia’s economic system? Is centralised strategic planning the best way forward? What should be centralised and what should remain centralised? What contemporary planning and forecasting methods should be introduced? Can Russia learn strategic management practices from other countries in the region? The very fact that an Eastern State Planning Centre exists and that these questions are being asked in these most extraordinary times should give us pause for thought.

Economic planning is certainly not restricted to socialist countries. Russia in our time is a good example, but it does have an earlier history with plentiful experience. Even some capitalist corporations know from experience that economic planning makes very good economic sense. But socialist countries – both past and present – have arguably the greatest experience in planning and clearly reveal its benefits.

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