Russia

1
Russias WTO Accession What are the
macroeconomic, sector, labor market, household
and poverty effects?

• Thomas Rutherford, University of Colorado
• David Tarr, The World Bank
• The views expressed are those of the authors
  and do not necessarily reflect those of the World
  Bank or its Executive Directors.

?????????? ?????? ? ??? ??????
??????????????????, ?????????? ???????????,
??????????? ??? ????? ?????, ???????????? ?
?????????
????? ?????????, ??????????? ????????, ?????
????, ????????? ????, ??????, ??????????????
? ??????, ??????????? ??????? ? ?? ???????????
???????? ?????? ?????????? ????? ??? ???
?????????????? ??????????.
2
Introduction

• WTO accession of Russiaone of the most important
  policy issues facing Russiafar reaching effects
  on industry and the service sector.
• Last big country not in the WTOimportant for the
  world trading system.
• Policy-makers want to know the impacts.

1. ??????????

• ?????????? ?????? ? ??? ???? ?? ?????????
  ???????????? ????????, ??????? ????? ???????
  ????? ?????? ?????? ??????? ?? ???????????? ?
  ?????? ?????.
• ????????? ??????? ??????, ??? ?? ?????????? ? ???
  ?????? ??????? ??? ??????? ??????? ????????.
• ???????????? ??????? ????? ????? ????????????? ?
  ???????????? ??????????.

3
We employ a computable general equilibrium model
of the Russian economy to estimate the

• Macroeconomic effects (aggregate gains,
  government revenue impacts, real exchange rate
  impacts, wage rate effects)
• The impact on employment and output by sector of
  the economy
• Distributional and poverty implications

?? ?????????? ?????? ???????????? ??????
?????????? ?????????? ????????? ??? ??????

• ?????????????????? ??????????? (??????????
  ??????, ??????? ?? ??????????????? ??????,
  ??????? ?? ???????? ???????? ????, ??????? ??
  ?????????? ?????).
• ??????? ?? ????????? ? ?????? ????????? ??
  ???????? ?????????.
• ??????? ?? ???????? ? ?????????????.

4
What Do We Assume Changes

• We do not know the final package of commitments.
  We assume the following three changes will occur
  as a result of Russian WTO accession (details in
  Table 5).
• 1. Tariffs reduced by 50 across industries
•   Russian tariff rates are not high by the
  standards of developing countries, although they
  are higher than most industrialized countries.
  They are only about 1.6 of GDP (or 7 of the
  value of imports) based on Customs Committee
  data or 1.2 of GDP (or 5 of the value of
  imports) based on Ministry of Finance data.

????? ????????? ?? ?????????
??? ?? ???????? ????????????? ??????? ??????????.
?? ?????????, ??? ? ?????????? ?????????? ? ???
?????????? ????????? ??? ????????? (??????????? ?
??????? 5).  1. ???????? ??????? ?? 50 ??
???????? ?????? ??????? ? ?????? ?? ?????? ??
?????????? ????????????? ?????, ???? ??? ? ????,
??? ?? ?????? ????????????? ???????? ???????.
?????? ?????????? ?????? ????? 1,6 ??? (??? 7
????????? ???????) ?? ?????? ???????????
???????? ??? 1,2 ??? (??? 5 ????????? ???????)
?? ?????? ???????????? ????????.
5
Discriminatory tax on multinationals service
providersreduced or eliminated (depending on the
sector)

• Examples of barriers under negotiation as part of
  WTO accession are
• the duration of the Rostelecom monopoly on long
  distance telephone services
• the restraints on multinational banks opening
  affiliates in Russia
• limitations of multinational provision of
  insurance services.

2. ????????????????? ????? ??
????????????????? ?????????????? ?????
????? ?????? ??? ??????? (? ??????????? ??
???????)

• ??????? ????????, ? ??????? ??????? ?????????? ?
  ?????? ?????????? ? ???
• ??????????? ????????? ??????????? ??
  ????????????? ? ????????????? ?????????? ?????
• ??????????? ??? ????????????????? ?????? ??
  ???????? ???????? ? ??????
• ??????????? ?? ?????????????? ????? ??
  ??????????? ?????????????????? ??????????.

6
3. Improved market access

• Russia already has most favored nation status on
  a bilateral basis with all its important trading
  partnersso not a big price increase for most
  Russian industries on export markets is expected.
• We assume increased export prices (from 0.5 1.5
  ) for seven Russian export sectors that are
  frequently subject to antidumping in export
  markets due to better treatment in antidumping
  cases but this effect should be modest.

3. ????????? ??????? ? ??????

• ?????? ??? ????? ?????? ?????? ???????????
  ??????????????????? ?? ????????? ?????????????
  ?????????? ?? ????? ?????????? ?????????
  ??????????, ??????? ??? ??????????? ??????????
  ???????? ?? ?????? ???????? ?? ?????????
  ????????????? ????? ???.
• ?? ????????? ???? ?????????? ??? (? 0,5 1,5 )
  ??? ???? ?????????? ?????????????? ????????,
  ????? ?????????????? ??????????????? ????? ??
  ?????? ????????, ????????? ????? ??????????????
  ???????????? ??????????????? ?????? ?? ????
  ?????? ?????? ???????? ?????????.

7
Results

• Macroeconomic Effects
• We estimate that the gains to Russia are equal to
  7.3 percent of Russian consumption (or 3.4
  percent of GDP) in the medium term.
• In the long run, due to an improved investment
  climate, the gains may be as high as 24 percent
  of consumption.

??????????

• ?????????????????? ???????????
• ?? ????? ???????, ?????? ??? ?????? ???????? 7,3
  ???????? ?? ?????? ??????????? ??????????? ( ???
  3,4 ???????? ???) ? ????????????? ???????????.
• ? ???????????? ???????????, ????????? ?????????
  ??????????????? ???????, ?????? ????? ??????? ??
  24 ????????? ?? ?????? ???????????.

8
How Important are the Three Elements of Accession

• To decompose the impacts, we run several
  scenarios
• Impact of Improved Market Access
• We estimate that the impact of improved market
  access at 0.7 of consumptionthe smallest share
  of the overall gains of 7.3.
• Follows from the assumed small increase in market
  access.

????????? ????? ??? ???????? ??????????

• ??? ????, ????? ????????? ?? ????????? ?????
  ??????? ?????? ????????, ?? ?????????????
  ????????? ?????????
• ??????????? ????????? ??????? ? ??????
• ?? ?????????, ??? ??????? ??????????? ??????? ?
  ?????? ???????? 0,7 ?? ??????????? ??????????
  ???? ?? ????? ?????? 7,3 .
• ??????? ?? ??????????????? ???????????????
  ?????????? ??????? ? ??????.

9
2. Tariff Reduction Alone

• ?he gains from tariff reduction in Russia are
  equal to 1.3 of consumption (out of 7.3 for the
  total gains).
• Improved allocation of resources in Russia, as
  resources will be induced to shift to sectors
  where they are more highly valued at world
  prices.
• Russian businesses will more easily import
  products that contain modern and diverse
  technologies.

2. ?????? ???????? ???????

• ??????? ?? ???????? ??????? ? ?????? ?????????
  1,3 ??????????? (?? 7,3 ????? ??????).
• ????? ??????????? ?????????? ???????? ? ??????,
  ??? ??? ??????? ????? ???????????? ? ?? ???????,
  ??? ??? ????? ????? ??????? ???????? (,?? ???????
  ?????).
• ?????????? ????????? ????? ????? ?????????????
  ??????, ?????????? ??????????? ? ?????????????
  ??????????.

10
3. Impact of Foreign Direct Investment
Liberalization Alone

• The welfare gains to Russia are 5.3 percent of
  consumptionthis is the largest source of the
  gains to Russia from WTO accession.
• Availability of a diverse set of service
  suppliers is crucial to the growth of countries.
  Russian commitments to multinational service
  providers will encourage more Foreign Direct
  Investment in Russia. Then, Russian businesses
  will have improved access to business services in
  sectors like telecommunication, banking,
  insurance, transportation and other business
  services. This should lower the cost of doing
  business for firms using these services and leads
  to productivity gains by Russian businesses that
  use these services.

3. ?????? ??????? ????????????? ??????
??????????? ??????????
???? ?????????????? ? ?????? ???????? 5,3
???????? ?? ??????????? ??? ????? ????????????
???????? ????? ??? ?????? ??? ?????????? ? ???.
??????? ????????????? ?????????????? ?????
???????? ????????? ??? ?????????????? ?????.
????????????? ??????? ?????????????????
?????????????? ????? ????? ??????????????
?????????? ?????? ??????????? ?????????? ?
??????. ???????????? ?????????? ???????? ???????
?????????? ?????? ? ??????? ??????? ?????
???????? ??? ?????, ?????????? ????, ???????????,
????????? ? ??????. ??? ?????? ???????
?????????????? ???????? ??? ?????????? ????????,
???????????? ?????? ????????, ? ???????? ? ?????
?? ??????????????????.
11
II. Sector Results (Employment Effects)

• Basic Principles For Sector Analysis
• Not all sectors can expand
• Labor and capital have to come from somewhere
  if labor expands in some sectors it contracts in
  others, some sectors lose relative to others.

II. ?????????? ??? ???????? (??????????? ???
?????????)

• ?????????????????? ???????????
• ?? ??? ??????? ????? ?????????? ????????????
• ???????? ??????? ? ??????? ?????? ??????-??
  ????????? ???? ??????????? ????? ?????????????
  ? ????? ????????, ?? ??? ??????????? ? ??????
  ???? ?????? ?? ????????? ? ??????.

12

• Not all sectors can contract
• Whythe economy has to pay for additional
  imports. Foreigners will demand hard currency for
  their goods and services.
• Thus, it is necessary to export to pay for the
  imports. The exchange will depreciate to
  equilibrate additional imports with additional
  exports.
• There is a trade surplus, but the trade surplus
  reflects capital investment decisions that are
  not likely to be altered by WTO accession.

• ?? ??? ??????? ????????? ????????????
• ??????, ???? ? ???, ??? ????????? ??????
  ?????????? ?????????????? ??????. ???????????
  ?????????? ????? ????????? ??????? ?????? ??
  ???? ?????? ? ??????.
• ??????? ?????????? ????? ??????????????, ?????
  ????????? ????????? ???????. ???????? ???? ?????
  ????????????, ????? ???????????? ??????????????
  ?????? ? ?????????????? ?????????.
• ?????????? ????????????? ?????? ?????????
  ???????, ?? ??? ???????? ??????????? ??????????,
  ?????? ??????? ???? ?? ????????? ??? ??????????
  ? ???.

13

• More sectors gain than lose
• We estimate that the economy gains from WTO
  accession overallthus there are more sectors
  that gain than lose.
• Which sectors expand employment the most
• Non-ferrous metals, ferrous metals, chemicals,
  telecommunications and financial services
• Why?
• Real exchange rate depreciation
• Improved market access

• ?????? ????????, ??????? ?????????????
• ?? ????? ???????, ????????? ? ????? ??????????
  ??? ?????????? ? ???, ??????????????, ??????
  ?????????? ????????, ??? ???????????.
• ? ????? ???????? ?????????? ??????????
  ???? ?????????
• ??????? ??????????, ?????? ???????????,
  ?????????? ??????????????, ?????, ??????????
  ??????
• ???????
• ??????????? ????????? ????????? ?????
• ????????? ??????? ? ??????

14

• Because non-ferrous metals, ferrous metals and
  chemicals are among the sectors that export the
  highest shares of their outputs. These sectors
  benefit the most from the depreciation of the
  real exchange rate.
• Non-ferrous metals, ferrous metals and chemicals
  are also three of the seven sectors we assume
  obtain improved market access.

• ?????? ??? ?????? ? ??????? ??????????? ?
  ?????????? ?????????????? ????????? ? ????????,
  ?????????????? ?????????? ???? ??????? ?????????.
  ??? ??????? ?? ??????????? ????????? ?????????
  ????? ???????? ?????? ?????.
• ?????? ? ??????? ??????????? ? ??????????
  ?????????????? ????? ???????????? ??? ?? ????
  ????????, ??? ???????, ??? ?? ?????????,
  ????????? ?????? ? ??????.

15

• Which sectors contract employment the
  most
• Food, light industry, machinery and
  equipment and construction materials
• Why?
• Relatively high tariffs
• Low export intensity
• Food, light industry, construction materials and
  machinery are the sectors with the highest tariff
  rates (the first three are the only ones with
  over 10 tariffs across the sector).
• Exports as a share of domestic output are quite
  low for these sectors compared to the expanding
  sectors.

• C??????, ? ??????? ????????? ???????????
  ?????? ?????
• ??????? ??????????????, ??????
  ??????????????, ?????????????? ? ????????????
  ???????????? ??????????.
• ???????
• ?????????? ??????? ??????
• ?????? ???? ????????
• ??????? ??????????????, ?????? ??????????????,
  ???????????? ???????????? ?????????? ?
  ?????????????? ??? ??????? ? ?????? ????????
  ???????? ??????? ( ?????? ? ?????? ???? ????????
  ?????? ????????? 10 ?? ???????).
•   ???? ???????? ?? ????????? ? ???????????
  ??????? ? ???? ???????? ????? ????? ?? ?????????
  ? ????????? ?????????.

16
Services Sectors Where FDI is Possible

• Many of these sectors expand employmenttelecommun
  ications and financial services expands, as do
  some of the transportation services sectors.
• In addition, transportation sectors see demand
  for their services increase due to increased
  external trade.
• Russian skilled workers may not have the same
  interests as the capital ownersas multinationals
  enter the industry in these sectors, they hire
  Russian skilled workers. Thus, skilled workers
  should favor FDI liberalization.

???????, ??? ???????? ???

• ?? ?????? ?? ???? ???????? ????????? ??????
  ??????? ????? ? ?????????? ????? ???????????
  ??????, ????? ??? ????????? ??????? ????????????
  ?????.
• ????? ????, ??-?? ?????????? ??????? ???????
  ???????? ?????? ????? ?? ???????????? ??????.
• ???????? ?????????? ????????????????? ??????????
  ????? ?????????? ?? ????????? ?????????? ????????
  ???, ??????? ???????? ?? ????? ? ???? ????????,
  ???????? ?????????? ?????????????????
  ??????????. ??????? ?????????????????
  ?????????, ??????, ????? ?????????????? ?
  ????????????? ???.

17

• Multinationals often look for a Russian joint
  venture partner. Russian firms that become part
  of joint ventures will likely increase the value
  of their investments. Russian capital owners in
  business services who remain wholly independent
  of multinational firms, will likely see the value
  of their investments decline.

??? ???????? ????? ???? ??????????? ????????
??? ???????? ??????????? ???????????. ????
??????????? ????, ??? ?????????? ????????,
???????? ? ?????????? ???????????, ????????
??????? ????? ??????????. ? ?????????? ??????????
????????, ?????????? ? ???????? ??????? ?????,
??????? ???????? ????????????? ?? ???, ???????
?????????? ????? ?????????.
18
Household and Poverty Effects

• Virtually all of the 49 thousand representative
  households in our model gain from WTO accession
  in the medium term. The gains range from a
  minimum of two percent to a maximum of 25 percent
  in the medium term. (see Figure 2 for the
  distribution). The long run gains should be
  larger (investment climate effect).
• Typical approach does not assess the impact of
  liberalization of barriers against FDI in
  services. Without modeling FDI in services and
  productivity effects we would get a very
  different distribution of gainssee Figure 6.
  Many households would be estimated to lose.

??????? ?? ????????????? ? ????????

• ??????????? ??? ?? 49 000 ????????????????
  ???????????? ? ????? ?????? ??? ?????????? ? ???
  ?????????? ? ????????????? ???????????. ??????
  ????? ? ???????? ?? 2 ?? ???????? 25 ?
  ????????????? ???????????. (??. ????????????? ??
  ???. 2). ? ???????????? ??????????? ?????? ??????
  ???? ?????? (??????? ??????????????? ???????).
• ???????? ?????? ?? ????????????? ?????? ???????
  ????????????? ??? ? ???????? ?????. ???
  ????????????? ??? ? ???????? ????? ? ???????????
  ?? ?????????????????? ?? ?? ???????? ??????????
  ???? ??????? ????????????? ?????? ??. ???. 6.
  ?????? ???????? ??, ??? ?????? ?????????????
  ?????????.

19

• The poorest ten percent of the households gain
  7.8 percent of consumption, which is slightly
  higher than the average gain of 7.3 percent of
  consumption. The richest ten percent of the
  households, gain 6.7 percent of consumption,
  which is slightly less than the average for all
  households. The return to capital increases less
  than the return to unskilled labor. The poor are
  the households endowed the most with unskilled
  labor and the rich are the households endowed the
  most with capital. Skilled labor in Russia is
  remarkably evenly distributed across income
  levels of the Russian population.

• ?e??e???e 10 ??o?e??o? ?o?o?o?????? ??e?????a??
  ?o??e??e??e ?a 7,8 ??o?e??o?, ?.?. ?e??o?o ?o???e
  ?e? 7,3 ??o?e??a ? ??e??e? ?o ??e?
  ?o?o?o??????a?. ?o?a?e???e 10 ??o?e??o?
  ?o?o?o?????? ??e?????a?? ?o??e??e??e ?a 6,7
  ??o?e??o?, - ????o?o ?e???e ?e? ? ??e??e? ?o ??e?
  ?o?o?o??????a?. ?????? ?? ?a???a?? ??e?????ae???
  ?e???e, ??? ?????? ?? ?e??a???????o?a????? ?????.
  ?e???e ?o?o?o??????a ??, ??? ??????????? ?
  o??o??o? ?e??a???????o?a????? ??????? ?????,
  ?o?a??e - ? o??o??o? ?a???a???.
  ??a???????o?a???e ?a?o????? ? ?????? ?a???e?e?e??
  ?o ??e? ??o???? ?o?o?o? ??????????? ?a??o?e??o.

20

• Although rural households benefit from WTO
  accession, they gain slightly less than urban
  households. We estimate that the poorest rural
  household will gain 7.2 percent of consumption,
  compared with 8.5 percent for the poorest urban
  household. Rural households are generally less
  endowed with skilled labor than urban households,
  and we expect that skilled labor will gain more
  than unskilled labor.

• ?e?????e ?o?o?o??????a ?o?e ???????a?? o?
  ??????e??? ? ??O, ?o?? ?? ???o?a ?e???e, ?e? ???
  ?o?o????? ?o?o?o??????. ?o ?a?e? o?e??e,
  ?e??e???e ?e?????e ?o?o?o??????a ??e?????a??
  ?o??e??e??e ?a 7,2 ??o?e???, ? ?o ??e?? ?a?
  ?e??e???e ?o?o????e - ?a 8,5 ??o?e??o?. O????o
  ?e?????e ?o?o?o??????a ???????????
  ??a???????o?a??o? ??????? ????? ? ???????
  ???????, ?e? ?o?o????e ?? ???????, ???
  ??a???????o?a???e ?a?o????? ?????a?? ?o???e, ?e?
  ?e??a???????o?a???e.

21
Transition Costs in the Short Run

• We have not modeled the short run, where
  transition costs of adjustment are important.
  During a transition period, there will be
  unskilled workers who will be displaced and who
  will have to find new employment. They will
  suffer losses from transitional unemployment and
  will likely incur expenses related to retraining
  or relocation. Thus, despite a likely substantial
  improvement in the standard of living for almost
  all Russians after adjustment to a new
  equilibrium due to accession to the WTO,
  government safety nets are very important to help
  with the transition and especially for the
  poorest members of society who can ill afford a
  harsh transition.

???????? ??????????? ????? ? ?????????????
???????
?? ?? ???????????? ????????????? ??????, ?
??????? ????? ???????? ??????????? ?????
?????????. ? ??????? ????? ??????? ?????????
??????????????????? ????????? ????? ????????? ?
?????? ????? ????? ????? ??????? ?????. ???
??????? ??????, ????????? ? ????????????, ?,
????????, ??????? ???????, ????????? ?
????????????? ??? ?????????. ???????, ???????? ??
????????? ???????????? ????????? ?????? ?????
??????????? ???? ??????? ????? ????????? ? ??????
?????????? ??? ?????????? ? ???, ??????????
?????? ???????? ????? ??????????????? ???????
??????????? ???????????, ??????????? ??????
????????? ?????? ????????, ??????? ?????
???????????? ? ????? ????????? ???????????
???????.
22
Conclusions

• Gains from WTO accession in the medium to long
  run are substantial.
• Provision of national treatment to multinational
  service providers would provide very substantial
  gains to Russia from improved access to business
  services this partly reflects the relatively
  protected domestic business services market. The
  greatest gains come from liberalization of
  barriers to FDI is services, but tariff reduction
  can also provide significant gains. We estimate
  the economy gains about 7.2 percent of
  consumption in the medium term and up to 24
  percent in the long run.

??????????

• ?????? ?? ?????????? ? ??? ? ????????????? ?
  ???????????? ??????? ???????????.
• ?????????????? ????????????????? ??????????????
  ????? ????? ?? ???????, ? ????? ?????????
  ?????????? ????????, ???????? ???????????? ??????
  ? ???? ??????? ??????? ? ??????? ??????? ???
  ???????? ???????? ?????????? ??????????
  ?????????? ????? ??????? ?????. ??????????
  ?????? ????? ???????? ?? ????????????? ??????
  ??????????? ?????????? ? ???????? ?????, ????
  ???????? ??????? ????? ???????? ???????? ??????.
  ?? ????? ???????, ????????? ? ????? ???????
  ?????? ? ??????? 7,2 ???????? ??????????? ?
  ????????????? ??????? ? ?? 24 ????????? - ?
  ???????????? ???????????.

23

1. Export intensive industries should gain.
2. Industries that dont export much and have
   relatively large tariff reductions decline the
   most. This includes light industry, food and
   machinery. Non-traded services also decline for
   the same reason.

• ?????????? ?????????????? ??????? ??????
  ????????.
• ????????? ???? ?????????? ?? ???????, ??? ??????
  ???????? ????????, ? ???????? ??????? ?????
  ???????????? ???????. ??? ??????? ???????? ? ????
  ?????? ??????????????, ??????? ??????????????,
  ??????????????. ??????, ?? ??????????? ??
  ?????????????? ??????, ?????????? ???? ?? ??? ??
  ????????.

24

• Russian labor should gain from FDI liberalization
  in services. Russian capital owners likely gain
  or lose depending on their ability to attract
  joint venture partners.
• Virtually all households gainbut the rural
  households gain slightly less than average.
  Households that are dependent on capital earnings
  in sectors subject to increased foreign
  competition may gain if their companies are
  attractive as joint venture partners but they are
  likely to lose if their companies are not
  attractive to foreign investors.

• ?????????? ???????? ??????? ???????? ??
  ????????????? ??? ? ???????? ?????. ??????????
  ???????????? ???????? ???????? ??? ????????? ?
  ??????????? ?? ?? ??????????? ???????? ?????????
  ??? ???????? ?????????? ???????????.
• ??????????? ??? ????????????? ??????? ??????,
  ????
• ?????? ??? ?e?????? ?o?o?o?????? ????? ????????
  ???? ????????. ?????????????, ????????? ??
  ?????? ?? ??????? ? ????????, ??? ?????????
  ??????????? ? ???????????? ??????????, ?????
  ????????, ???? ????????, ? ??????? ???????? ??
  ?????, ????? ???????????????? ? ????????
  ????????? ??? ??, ?????? ? ????????? ?????? ???
  ?????? ?????????.

25

• Safety nets are very important. Transition costs
  of adjustment (which we do not model) mean that
  safety nets for the poor are very important in
  the short run.
• WTO accession galvanizes domestic support for
  liberalization of trade and foreign direct
  investment and represents a unique historical
  opportunity to lock-in reforms of the trade and
  foreign direct investment regimes in a movement
  toward an open economy model of economic
  development.

• ??????? ??????????? ??????????? ????? ?????.
  ???????? ????????? (??????? ?? ?? ??????????)
  ????????, ??? ??????? ??????????? ???????????
  ?????????? ????? ??? ?????? ?????? ?
  ????????????? ???????.
• ?????????? ? ??? ??????????? ?????????
  ????????????? ???????? ? ??? ? ?????? ? ????????
  ?????????? ???????????? ???????????? ?????????
  ??????? ? ??????? ???????? ? ?????? ???, ????????
  ? ?????? ????????, ? ?????? ??????? ????????
  ?????????.

26
(No Transcript)
27
(No Transcript)
28
(No Transcript)