Income inequality is a sign of an underdeveloped economy

1 february 2017

The Analytical Center and Lomonosov Moscow State University held a joint conference titled Strategic Planning in the Economy during which experts discussed the existing economic mechanism and its impact on the development of the sectors and regions of the national economy as well as anti-crisis programs and proposals put forward by various social institutions and theoretical schools.

Elena Veduta, department head at Lomonosov Moscow State University, talked about strategic planning in the economy based on a dynamic model of inter-industry and inter-sector balance. According to her, the modern world is changing very fast and so it's important to understand the ways in which economic planning is evolving. Ms. Veduta noted that a variety of planning models have been used around the world for hundreds of years now. "In the past the state would only support a handful of isolated industries, but now we've come to realize that that was the wrong approach," the expert said. "In the long term, focusing only on a handful of hand-picked industries inevitably leads to a crisis."

In her opinion, the way out of the current crisis lies in proportionate economic development based on the needs of the end consumers: the state, the households and the exporters. It's also necessary to effectively allocate production investments and optimize the structure of the supply of the consumer market.

Andrey Margolin, pro-rector of the Russian Presidential Academy of the National Economy and Public Administration, believes that an effective investment policy can serve as a catalyst for removing the key barriers to socio-economic development. "We need to reduce various types of inequality and especially social and regional inequality while increasing investments and the capitalization of the financial system," the expert believes. It's also important to improve the quality of life of the population by implementing investment projects aimed at developing social infrastructure. According to Mr. Margolin, one of the key problems of industry is focus primarily on short term goals rather than on long term development.

Participants in the discussion backed what the presenter said, noting that currently in Russia it's day to day issues that everyone's focusing on while what's needed is plans that look 70-80 years into the future, in order to lay a firm foundation for future development and set long term targets. The experts are also convinced that income inequality is a sign of an underdeveloped economy and that this problem should be addressed in a timely manner.

Special attention was paid during the conference to the system of distributed situational centers as an integral element of the information analytics and information technology infrastructure of public governance.