Too much of Government is bad enough - Sochi Forum
Unlike most of the previous economic forums in Sochi the tone of round tables this year has been much harsher. Rather than cherishing past achievements, experts criticized the Russian economy for not becoming more competitive.
Despite the great potential, Russia remains in 67th place on the global competitiveness scale. Poor management is a key a problem, according to Ichak Adizes, president of Adizes Institute. “The energy is there that has to be channeled. The energy today is not channeled right,” Adizes told Business RT.
Governmental dominance in the economy is a core problem the experts agreed. “If you have too strong government dominance, then you have problems with things like corruption, inefficiency, no clear targets and things like that,” added Ilkka Salonen, chairman at Uralsib bank.
The Russian State remains the main backbone for its economy. The country’s top 200 companies saw a 27.5% increase of their net result to above $329bln, according to a Forbes research. This is a record high for the 8 years during which the magazine tracks the rating, but such a breakthrough was made primarily thanks to the Governmental orders.
To become more self – sufficient Russian companies need to boost their efficiency, which remains quite low in international terms. The TP- Index that shows a ratio of a company’s turnover to the workforce showed that the picture is even more frustrating.In Russia’s largest private energy company Integrated Energy Systems each worker produces on average $175,550 of annual revenue, while at the US Energy Future Holdings the figure stands at $895, 650.
Overall, 244 agreements were made at the 11th International Investment Forum, Sochi 2012, worth $11.1bln. The figure compares with 295 deals worth $13.85bln done in 2011.