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Business / Finance

Pessimism is the enemy of the economy

Banki.ru: themes of the day 04.03.2019 at 21:02

Banking and financial news on the website Banki.ru

Russian entrepreneurs look to the future with extreme pessimism, the research say sentiment in the business environment. A review of the Easy of Doing Business from the world Bank shows that do business in our country is becoming easier every year. However, between these estimates actually is no contradiction. Why?

the Uncertainty scares

the Company Grant Thornton presented the next issue of "International business report", one of the leading global research medium-sized businesses. The results are not encouraging: global optimism, according to the fourth quarter of 2018, accounting for 39%, 15 percentage points lower than half a year earlier — according to the results of II quarter of 2018. In General the global business community shows the lowest level of optimism since the end of 2016.

the Main number of the survey, this net percentage responding positively. That is, of the percentage points of those who responded positively were deducted percentage points of those who answered in the negative. Accordingly, if any issue dominated the negative answer, the result was negative.

of Course, the world is diverse. The picture is better in developing countries and, for example, in Ireland, demonstrating the highest level of optimism — 80%. Worse — in North America, Europe and Russia. The decline in optimism caused by the uncertainty in the economy, suggest the authors of the study: its influence is estimated at 50% vs. 28% six months earlier. Also, the business adapts to the fact that the peak of economic growth will take place, and are increasingly complaining about the growing lack of qualified personnel (staff shortages increased negative evaluations from 40% to 48%).

the significance of the lack of professional staff is growing especially in the UK, largely due to the uncertain situation of foreign experts after the final of Britain's exit from the European Union. Brexit've added to the uncertainty of the whole European economy: too many questions remain unanswered. It should be added and the slowdown in economic growth in the EU at the end of 2018, primarily in three major NATO countries: Germany, France and Italy.

Russia: the triumph of pessimism...

as for the Russian medium-sized business, it, according to a recent study by Grant Thornton, literally fell into pessimism. Russian index of minus 23%, 33 out of 35, with just six months, we dropped from 24th place, losing 49 PP

What scares a Russian businessman? Everything. Almost all restrictions for business for the last six months were more tangible. The importance of bureaucracy has increased by 43 percentage points and now 61% of the petition referred to bureaucracy as the major obstacle, although the results of II quarter believed only 18% of the business. Sharply increased economic uncertainty from 27% to 59%, further reduce demand (six months ago it was frightening 27%, now — 50%). Worse with the quality of transport infrastructure (this factor of pessimism has increased from 11% to 26%), increased indicators of financial constraints (from 42% to 50%) and energy costs (from 36% to 43%). The only limitation, the impact of which has not increased over the past six months has been the shortage of skilled labor. With regard to entering foreign markets, the main obstacle the Russian medium-sized business refers to the lack of contractors and political instability.

Quote ...and optimism

a sharp increase in pessimism of Russian medium business is completely contrary to a recent study Doing Business in 2019, which is held by the world Bank. According to him, Russia took the 31st place out of 190 countries, rising over the year on four stages. Six years earlier, Vladimir Putin gave a mandate to climb at this point for 20th place. To achieve this failed, but even the 31-th place — it is really impressive progress, bearing in mind that in 2010, we took the 120-th place, and in 2013, on the eve of the start of the last economic crisis, — 112-

the ease of Doing Business Index examines the laws and regulations that govern business in the country. In a special way, the world Bank noted the reforms that facilitate the passage of those or other bureaucratic procedures. Thus, in analyzing changes in the Russian legal field over the past year, the study authors noted improvements in four areas: access construction, access to electricity, paying taxes and international trade. "Russia has accelerated the process of obtaining permission for construction and commissioning (objects. — Approx. Banks.ru) in operation, — write the authors of the study, commenting on Russian reforms. — Russia has also increased quality control during construction due to the introduction of risk-based inspections".

Regulatory innovation in the construction sector the world Bank seemed so impressive that in the section "construction Permits" Russia for last year has risen to 64 degrees, finishing in 48th place. We managed to slightly improve its position in international trade, reducing the cost of customs control to the Russian exporters from 665 to 580 USD. Russia has retained a high place in categories such as ease of registration of property and business (12-e a place in both categories) and the speed of resolving commercial disputes (18-e a place).

Commenting on the results of the Doing Business 2019, Minister of economic development Maxim Oreshkin said that next year Russia will rise even higher, because the world Bank experts take into account only the reform, fully implemented prior to may 1 of the previous year. So in the near future we will be able to see Russia, even on the 18-th place, said Oreshkin.

Why do middle business takes such a pessimistic, not seeing the real facts? Why two business-rating — one built on facts, and the second — in the mood — so obviously contradict each other? And which one should I believe?

dreams of Blue and grey reality

there is No contradiction actually no, the Director of the Institute of strategic analysis FBK Igor Nikolaev. "The Doing Business ranking looks at the legal stuff, — says Nikolaev. — They are important to watch, and it is important to consider. But do not forget that formal measures may not be implemented. The study authors of Doing Business what are the documents accepted, and account for it in the ranking. And what about their implementation, experts already do not care".

as one example, Nikolaev cites the fact that, formally, Russia confidently moves towards the decriminalization of the business, deriving from the criminal field, including the economic section. In practice, however, is what is happening: it is enough to watch the news the past days.

"the Modern economy is an economy of sentiment, — says Igor Nikolaev. — This factor is underestimated". According to the economist, the higher the level of uncertainty in the economy, the more each individual owner relied in making decisions on their intuition, ignoring official statistics and other actual indicators.

For optimism among Russian businesses have no grounds, says the results of the survey Grant Thornton, General Director of Phoenix Advisors Oleg Tsarkov. He recalled the rise in prices for tickets range from 5% to 33%, which has reported and which the airline justified the weakening of the ruble and the increase in VAT. "We'll arrive and other effects of the VAT increase," warns the businessman.

Quote

According to Tsarkov, the main economic indicator to which he drew attention in planning your business is the real disposable incomes, which is known to decrease for the fifth consecutive year.

"In retail, 80% of category goods non-food (non-food items. — Approx. Banks.ru) purchased on the stock. 50% of food is bought on the stock. That is, half of the population does not have enough money even for food," says the entrepreneur about the situation with demand. According to him, in the segment of retail trade there is only one, and that is a dubious reason to expect the growth of the business. "Today, the growth of local business metalowego occurs only as a result of the death of a competitor," said Tsarkov.

Feelings rule

Uncertainty turns in the main evil of the modern Russian economy, agrees with Igor Nikolayev a sociologist, the expert of "Levada-center" Denis Volkov. A year and a half ago, "Levada-center" in cooperation with the Carnegie Center conducted a study on the attitude of foreign business to the Russian market. His insights are relevant today, sure the wolves. "Russia — a place of global uncertainty" was a generalized response of foreigners. They pointed to the high level of corruption and insecurity of property rights.

Commenting on the conflict between Russia and the West, foreign investors said that the problem with Russia is not a conflict as such, but the fact that it is constantly expanding.

In summary, by comparing the ratings based on the assessment of the mood and the evaluation of the facts, Igor Nikolaev emphasized that today in Russia on the economy and its future development in the greater influence that is mood, not official figures. Which, by the way, often have a lot of questions. "For example, investment decisions a businessman will make more based on what he sees around him, and his inner sense, than the data of Rosstat, — says Igor Nikolaev. — When you do not understand what is happening around, you have to listen to the inner voice, and he says that perhaps it is better not to start. This subjectivism is not good for the economy".

But it determines the behavior of the business, agrees Oleg Tsarkov. "People see that the business failure threatens the welfare of the whole family, that is personal property, education of children, the house in which the family lives, and so on, says kings. — Someone in this situation begins to invent all sorts of schemes, while others simply decide not to do business". In the end, all this is reflected in the development of the economy, where we will be tomorrow.

the Peculiarities of national optimism

However, if we evaluate the state of the economy and its prospects, based on self-assessment business, not to be discounted, especially the mentality of a nation, warns former head of rating agencies "ACRA" Ekaterina Trofimova. She drew attention to the traditionally high levels of optimism in Latin America and the Caucasus. According to Trofimova, the mentality of these peoples does not allow them to complain and admit that things go wrong.

by the Way, and the current survey Grant Thornton — confirmation: fifth place it was Brazil with an index of 66% and 12th — Armenia 50%. Russia, we recall, in 33rd place with a score of minus 23%. So that internal sensation and what is the sociologist, can not fundamentally be the same. However, for Russians it is not true...

Milena BAKHVALOVA, Banki.ru