Belinskaya I.I.

Orlovskiy state institute of the economy and trade

Radical macroeconomic transformations connected with the transition from command to market economy have been taking place since 1990 in Russia. These transformations presuppose a number of severe micro and macroeconomic reforms. Structural reorganization is one of the most important components of industrial policy in the transitional period. It occurs both at the macro level changing the industrial structure and at the level of managing subjects dealing with intraproduction relations. But economy is inert and that is why serious efforts and material and intellectual costs are required for its transformation. Profundity and speed of the change depend mainly on government policy and opportunities to make significant investments.

Structural reorganization of a national economy is a deep transformation of productive forces which is determined by the necessity of technological production updating and its adaptation to changing internal and external conditions. Its main aims are production reorganization, including reorganization by liquidation of inefficient sectors and by division or amalgamation of enterprises, replacement of physically worn out or obsolete assets, innovations and new production. Everything mentioned results in considerable changes in branch, technological, dimensional, regional and other structures of public production.

Today the main task of economy transformation in Russia is to eliminate accumulated structural deformations. They are: distorted branch structures of national economy which are manifested in hypertrophied development of heavy industry and military-industrial complex, large amounts of natural resources, poor development of industrial and social infrastructure, technological structure deformation, which is the reason of enterprise fitting out with obsolete equipment, technical and production lag of enterprise caused by the lack of competition and long term isolation from the world economy, dimensional structure deformation which is the result of big and super big enterprises prevalence and the lack of small ones, distorted regional economies caused by errors in enterprise location which were chosen without taking into account of cost minimization requirements including costs of transportation.

From the very first days of reforms the government chose the maximal economic liberalism policy. It is explained by the fact that by the beginning of our reforms Keynesianism as theoretical basis of government economic policy in the West in 50 - 70s had quitted the stage, providing the place to neoliberalism with its main slogan: «Less government - more market».

Economy was oriented to forced formation of basic market economy institutions and reduction of government intervention to the country's economy. Large scale privatization became the central part of the reforms and as a result of it private sector supplemented with private-public sector dominates in the economy nowadays. Market mechanisms of self-organization were supposed to start working automatically after providing full independence and structural reorganization and economic growth stopped in the last 80s would consequently start.

Private property mechanisms and their corresponding new organizational- legal forms together with the market pricing liberty and competition were supposed to replace the state regulation functions of the economy. Fiscal, budget, customs and partially banking regulations were left to the state which now doesn't have real authoritative power. Now one can say that privatization has resulted in the loss of public and state control over production and finance, its «shadowing» and usage of obsolete and worn out assets.

Structural reorganization is an effective way to overcome cyclic crises, manifested in periodic worsening of economy functioning quality due to decrease in efficiency and competitiveness under gradual accumulation of inner contradictions, obsolescence of the existing forms of organization and management, market saturation with the traditional production of private enterprises in venal interests of new owners and oligarchic groups. Economy mechanism deformation took place, disinterest of new owners of privatized enterprises in production restructuring was enhanced by barter dominating, accumulation of large non-payments, creating of banking system isolated from real sector.

There is the most acute shortage of financial resources at all levels everywhere. It is manifested in chronic budgeted deficit for federal and regional administrations, in the shortage of circular capital and investment resources for enterprises, in limited assets for commercial banks, in low income, little savings due to non-payment of salaries, wages, retirement pensions and social securities for country's people. The main reason of such shortage is non-controlled outflow of financial assets from the economy resulting in national's resources depletion. In normally functioning economy the circular flow of public capital is self-contained in that depreciation is spent on production and revenue is spent on investment and public funds. We have broken circular flow as the greater part of depreciation funds doesn't return to production.

Structural crisis is one of the main factors depressant for the development of Russian economy. During the period of reforms the most significant changes happened in branch structure of the economy, caused by uneven production and investment decrease rate in separate sectors. First of all production sphere was considerably reduced with the corresponding increase of share of providing of services.

At the same time unfavourable tendencies in the production structure are enhancing and the main tendency is the ratio change between extracting industries and manufacturing branches in favour of the former. Share growth of fuel energy complex is the greatest. A considerable decrease of machine-building and a wide range of industries producing consumer goods are among other negative tendencies. Timber, woodworking, pulp and paper industries, industry producing building materials and chemical and petrochemical industries are much worse.

Over the last years technological structure of the economy is becoming worse. With share increase of traditional and relic set up the part of advanced technologies reduced. Inclination to the third technological organization returns the country to the beginning of industrialization period.

At the same time there were important and positive changes in dimensional structure of production, characterizing the ratio of different types of enterprises: large, medium-size and small. During the years of reforms a system of small-scale enterprises which was practically absent earlier has been created. Besides large economic structures (LES) corresponding to market economy were formed as a result of manufacturing, financial, commercial and other enterprises integration within the limits of intensive Russian capital self-organization.

One of the most important factors of economy's structural reorganization in the context of rapidly progressing integration to the world economy is its external economic links. They are carried out mainly through the channels of foreign trade: export and import, foreign investments, international economic cooperation development of domestic enterprises. As a result country's participation in the world system of labour division has unexpectedly grown.

At present the problems of country's economic independence, technological industrial reconstruction and formation of modern production plant are first-priority. It is necessary to realize the transition of the main branches to the use and output of new technological equipment. The urgency of such transition is very high as many kinds of equipment and technologies have become obsolete. Production of traditional models leads to the loss of competitiveness not only at the foreign but also at the domestic market.

Structural reorganization of Russian economy in the medium-term should be carried out on the basis of three main strategies:

– development of high-tech science intensive industries first of all on the basis of production markets development, involving intellectual property in economic turnover and coordination of investments with innovation projects;

– development of competitive production of consumer and investment goods on the basis of price advantages of domestic products, realizing the government purchases and promoting Russian goods at the domestic and foreign markets;

– providing the development stability of energy-raw-materials production for satisfying the needs of domestic market conducting easy taxation as well as customs-tariff policies, aiding in attracting foreign investments and a number of other steps.

The following purposes are of special importance in the structural policy: curtailment of structurally-depressed production and liquidation of equipment with the expired term of operation; reduction and then termination of obsolete machine-building production; rearrangement of capital assets. Rearrangement and reprofiling of capital assets should be carried out as amalgamation and merger. To stimulate these processes it is important to simplify the bankruptcy procedure of problem enterprises and their purchase.

Special attention should be paid to the use of military-industrial complex potential while elaborating the policy of import-changing. This means the defence enterprises' entrance to the consumer market with a new product or technology; sale of licences on commercial use of elaborations, obtained in the military research works; mutual capital mobility between military and civilian sectors of economy; transition to double application technologies.

At the same time it s necessary to accelerate the processes of amalgamation and merger of enterprises including the bankruptcy procedures for rearrangement and reprofiling of capital assets and for accumulation of financial investment resources to prevent their diffusion.