The world Bank has called the best way of combating poverty

labor Productivity – the main source of sustainable income growth and income growth – the main factor of poverty reduction. In a quarter of developing countries, where productivity grew at the fastest pace in 1980-2015 years, poverty has declined on average by more than 1 percentage point per year. But the inhabitants of the countries with the lowest growth rates of labour productivity, by contrast, grew poorer. But after the financial crisis of 2008-2009, the pace of growth has not recovered neither in developed nor in developing economies, say analysts at the world Bank, to understand the causes and consequences of this trend, including Russia.

the world Bank Experts analyzed the productivity (production per unit of labour input) in 29 developed and the 74 developing countries from 1981 to 2018, And found that although the gap between labor productivity in developed and developing countries is gradually reduced, it remains huge. On average, one worker is 60 per cent of developing countries produce in the same period less than 1/5 of what a worker produces in developed economies. And if before the financial crisis the difference was reduced, but now it is growing again. It is this gap defines 2/3 of income inequality in the world, writes world Bank, and warns that decreasing at least twice will take centuries.

While slow only the growth rate of labor productivity. The slowdown was most extensive in recent decades, it continues for eight years compared to the last downturn in 1986-1990 and at least 50% higher. In 2007, the rate of productivity growth peaked at 2.7%, in 2016 dropped to a low of 1.5% and remain low until now (1.9% in 2018, in developed countries, 0.8%, and in developing and 3.6%, and excluding China and India is only 1.3%). On average in 2013-2018 global labor productivity grew by 0.5 p. p. slower than in 2003-2008, the Slowdown affected almost 70% of both developed and developing countries (accounting for 80% of global GDP), but was hit hardest the poorest segments of the population – more than 80% of those living below the poverty line. But the most noticeable slowdown of productivity growth in China, where for several years decreased the growth rate of public investment, as well as in the countries – exporters of raw materials affected by the sharp fall in oil prices in 2014-2016.

the Nobel prize in Economics for research on poverty, received the Award on three scholars – Abhijit Banerjee, Esther Duflot and Michael Kremer, the Economy

Slowing growth in developing countries is approximately equally due to weak investment, slow productivity growth of other factors of production. And with weak institutions and insecure legal environment, lists the world Bank.

Not spared the decline in the growth rate of labor productivity and Russia amid international sanctions and the collapse in oil prices, the growth was close to zero in 2013-2018, after increasing 6% in 2003-2008 In 2018, labor productivity grew by 1.9%, according to Rosstat. The main reason for the slowdown is the weak investment (it has 3/4 drop). And how to restore growth, it is unclear, admits the world Bank: the state companies and projects, as a rule, less efficient than the private sector, says the world Bank, but in Russia, the state presence in the economy remains “considerably”.

According to the Federal Antimonopoly service (FAS), the share of public sector in the economy grows. By 2017 it could be higher than the 60-70% of GDP, refers to the FAS assessment unnamed in the report of the experts, and in 2018, the situation has not changed significantly. And in some sectors has even worsened after the transition in 2018 private banks under the control of the Fund the consolidation of the banking sector, the proportion of Statesand in banking assets increased from 59.2 per cent in early 2017 to 66.2%, FAS refers to data of the Central Bank.

On the ineffectiveness of the Russian state sector, and pointed out the chamber. In 2017 its auditors compared the productivity in public and private companies from one sector and came to the conclusion that, ceteris paribus, the growth rate of labor productivity in private companies above, including the sustainable reduction of employees. The main increase in performance is a small fraction of the most efficient companies, pointed the analysts of the Central Bank (their views do not necessarily reflect the official position of the regulator). But Russia’s problem is that leaders increase production and occupy a significant market share, and outsiders, becoming smaller, it is not leaving, they warned. As a result, this business keeps workers and capital, the braking performance of the entire industry.

Among other problems – post-crisis weakness of many main factors of production, indicates the world Bank. Slowed growth in the active population, technical progress, increasing the level of education and Russia is becoming less involved in global trading chains. This is a large export oriented companies in developing countries are the closest in terms of performance to the companies of developed. But because of the weakness of global trade and the growth of uncertainty they can “roll back” and the gap in productivity growth, then poverty may increase.

world Bank advises to increase the number and improve the quality of production factors and the efficiency of their use is to create a favourable economic environment (institutional and social), to develop trade integration, increase the availability of financial instruments. But the main thing – to encourage investment in human capital. Suggestions relevant for Russia: according to the world Bank, in ROSthese human capital account for a major share of the total wealth of 46%, although the share is lower than the OECD average (70%). To catch up with other countries, Russia will need about 100 years, says the world Bank. But while the industry related to the development of human capital, under-funded, said the Chairman of the accounts chamber Alexey Kudrin. For 2011-2017 expenditure on education decreased from 3.7 to 3.5% of GDP on health from 3.5% to 3.3%, while on defense, on the contrary, increased from 2.5 to 3.1 per cent. However, such investments have led to the growth of value added in the economy, a qualitatively different economic and political environment, said the Director of the Centre for labour market studies Higher school of Economics Vladimir Gimpelson.

the Acceleration of productivity growth is one of the national projects of the President of Russia Vladimir Putin: by 2024, the growth rate in the medium and large non-oil companies should grow by 5% year-on-year. To do this, the authorities are ready to help enterprises preferential loans, tax incentives, to create a system of retraining of workers and to promote international collaboration. Only from 2019 to 2024 it is planned to spend more than 5.5 billion rubles. Human capital is one of the most important engines of productivity, I agree Gimpelson, but without demand in the economy, which depends on the quality of institutions, level of competition and effective regulation, human capital cannot be used effectively. “How high was the quality, without addressing problems in the regulation and development of competition in human capital will simply flee to other countries,” he said. The national project does not solve these problems, and without good institutions to increase productivity it is impossible, concludes Gimpelson.