Actuality December, 18, 2007

Russia overtakes China in the Goldman Sachs rating of growing economies for the first time. But the recipe for success has become not so much the Russian achievements, as indices decrease of the competitor.

Goldman Sachs (GS) publishes the global index of growth conditions of Growth Environment Score since 2005, calculates it since 1997. The index is calculated on the basis of five groups of indices: macroeconomic stability, investment climate, human capital, political conditions, availability of modern technologies. Economic indicators are based on information of official statistics, political – on the estimations of World Bank, explains Raluka Dragushanu from GS.

For 10 years Russia rose from the 140th place to 74th in 2006, and this year – for eight steps more: on 66th place among 181 countries.

It allowed it to overtake China for the first time and to become the leader among BRIC countries (the most perspective economies of the world: Brazil, Russia, India, China). Russia ‘s superiority is insignificant: the absolute indices of two countries are equal – 5,5 points from 10.

Russian superiority is the result of more rapid expansion of mobile communications and computers, and also China indices’ decrease on such  parameters as “law supremacy”, “corruption”, “political stability”.

There are no objective reasons for such overrating of political conditions in China, convinced Andrey Karneev, deputy director of the Institute of Asian and African Studies, Moscow State University. According to his opinion, it is connected with the growth of tension in the American-Chinese relations that resulted in negative coverage of China by mass media.

The best index has Norway (8,7), the worst – Iraq (1,3). Estonia (7,4, 22nd place) outstripped the  USA (7,3, 24th).

Advantages of Russia over the developing economies are the low external debt, big budget surplus, high level of education, expansion of modern technologies among the population. The weakness is political indices.

In the most ratings that estimate the conditions of business conduct, Russia is still lower than other BRIC countries. In the index competitiveness of the World Economic Forum Russia occupies the 58th place – behind of China (34th) and India (48th), but ahead of Brazil (72nd).

GS rating reflects the real situation on the whole, convinced Mark Kliff, chief economist of ING Financial Markets. “The economic situation in Russia has improved essentially, and the quality of economy management is incomparable with that of 10 years ago. True, Russia depends on raw material prices more than other developing countries”.