O.E.C.D. Encourages Labor Changes in Russia
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Version 0 of 1. MOSCOW — Russia will have to remake its labor practices for the country’s economy to pull out of its current doldrums. That, in essence, is the conclusion of a study released on Wednesday by the Organization for Economic Cooperation and Development, the think tank supported by the governments of 34 member countries. For a decade under the rule of President Vladimir V. Putin, Russia’s economy surged on the back of rising oil prices. But a different picture awaits in the years ahead, the O.E.C.D. report concluded. Russia, the report said, can no longer rely on any of the major drivers of economic growth that had pushed the country forward since the late 1990s. Gains from rising commodity prices, utilization of legacy Soviet infrastructure and improvements from the introduction of capitalist management techniques, among other drivers, have all run their course. The economy is already withering. Growth in 2013 slowed to 1.3 percent, the lowest in a decade other than during the global recession in 2009. At the same time, Russia is facing a long-simmering demographic crisis as its work force is expected to contract sharply in the coming decade. The issue is tied to the “tiny generation,” the Russians born during the post-Soviet depression of the 1990s who are now coming of age. “The Russian economy is at a crossroads,” the O.E.C.D. secretary-general, Angel Gurría, said in a statement about the study, the first issued by the group since the slowdown began here. “It has tremendous potential but is still heavily reliant on volatile revenues from natural resources,” he said. “It would do well to invest more in infrastructure, human capital and innovation, so that larger segments of society can partake in Russia’s transformation.” With the work force shrinking and oil revenue flat, Russia’s main hope for growth lies in improving the average productivity of workers, the O.E.C.D. suggested in its report. The group offered several recommendations, including removing infrastructure bottlenecks and increasing competition. The average speed of a car during rush hour in Moscow, for example, is only 10 kilometers per hour, or six miles per hour, the report notes. That means cars are only marginally more efficient than walking as a means of transportation. The Russian government has also lavished long breaks and holidays on workers. The winter holiday that Russians are returning from now, for example, provides six days off in the first two weeks of the year — five days off to celebrate the new year and one for Orthodox Christmas. And once at work, Russians are relatively unproductive compared to other emerging market workers; wages in the country rose faster than labor productivity for a decade. The O.E.C.D. also highlighted the inefficiencies of employers, who don’t necessarily cull their work force in line with economic changes. The Russian national railway company, Russian Railways, employs a million people and is the largest employer in the country. But analysts have long wondered what all these people do. Suspicion that they do very little was reinforced in December when the company, citing a government cap on freight tariffs, put a third of its work force, or about 300,000 people, on part-time schedules. Far from slowing down, it was as if the company gained a new head of steam: freight loadings that month went up by nearly 2 percent, to 103 million tons. The O.E.C.D.’s concerns come at a time when Russia’s prospects are faltering. The Russian ministry of economy’s trend growth forecast is 2.5 percent, lower than the global average. Just two years ago, the O.E.C.D. had forecast Russia’s long-term growth at slightly above the global average, at 4 percent. This shift means that living standards for Russians, which had been converging with developed nations, will now be moving in the opposite direction. “We are for the first time on the waning side, when the world will grow at a faster rate,” the minister of economy, Aleksei Ulyukayev, said on Wednesday in remarks at an economic forum in Moscow. |