key: cord-0843529-5gzdrga8
authors: Kuvalin, D. B.; Zinchenko, Yu. V.; Lavrinenko, P. A.
title: Russian Companies in Autumn 2020: Activities in the COVID-19 Pandemic and Views on the Transition to the Best Available Technologies (BAT)
date: 2021-05-24
journal: Stud Russ Econ Dev
DOI: 10.1134/s1075700721030084
sha: 02633fec6d546038bf980c821147a749b24fc873
doc_id: 843529
cord_uid: 5gzdrga8

The paper analyzes and comments on the results of a regular survey of Russian enterprises in the real sector, which was conducted by the Institute of Economic Forecasting of the Russian Academy of Sciences. Information on the impact of the coronavirus pandemic on the activities of domestic enterprises is provided. The opinions of enterprises on the severity of various macroeconomic problems in Russia are reflected. The data on the relations between Russian enterprises and banks are presented. The degree of demand of Russian enterprises in the modernization of production is determined. Information on purchases of domestic and foreign equipment in Russia is considered. The assessments of enterprises regarding the quality of Russian machinery and equipment are given. The data on delays in the supply of raw materials and components are presented. The opinions of enterprises on the implementation of the best available technologies (BAT) in Russia are reflected.

December 2020 (Table 1 ). In addition, the proportion of enterprises that reported growth or stability of their sales volumes increased by the end of the year, and the proportion of enterprises that experienced a deep decline in sales volumes (over 50%) significantly decreased. In particular, the share of reports about a growth in sales volumes increased from 3.20% in April-May 2020 to 7.91% in November-December 2020. At the same time, the share of answers about a drop in sales volumes by more than 50% decreased from 15.90% in April-May 2020 to 5.76% in November-December 2020 ( Table 2 ). Such shifts in the structure of answers confirm that the situation improved in some areas of the Russian economy in the second half of the year. One of the factors that influenced the economic situation for the better was the support of enterprises from the state. The variety of forms of this support and their relatively quick launch into action made it possible to cover a fairly wide range of economic activities and enterprises. As a result, the share of enterprises that were able to take advantage of support measures from the federal authorities increased from 9.00% in April-May 2020 to 24.82% in November-December 2020. However, the share of enterprises that did not receive such support changed little-from 70.50% in April-May 2020 to 68.61% in November-December 2020 (Table 3) .

In other words, most of the Russian enterprises affected by the crisis associated with the pandemic had to make do on their own. This is probably why Russian enterprises as a whole were very cautious in assessing their market prospects. Only 5.76% of the respondents expected an increase in sales volumes in the next 1-2 months in November-December 2020. Even in April-May 2020, the share of such respondents was higher at 14.20%. Admittedly, the share of enterprises that believed that the sales volume would not fall and would remain approximately at the same level increased noticeably, from 29.90% in April-May 2020 to 46.04% in November-December 2020. However, the share of enterprises that expected a reduction in sales volumes did not decrease by the end of the year. In April-May 2020 it was 27.60%, and in November-December 2020 it was 28.78% (Table 4 ). Thus, enterprises as a whole do not expect a quick recovery of the Russian economy from the current crisis. However, such cautious views of enterprises on the future were also characteristic of all previous crises that had taken place in the Russian economy. Moreover, enterprises were clearly pessimistic about the near future even in situations when the national economy was actually rather quickly (as in the spring of 2009) overcoming the consequences of the crisis.

At the same time, it should be noted that the crisis phenomena generated by the pandemic had relatively little effect on the views of domestic enterprises about Table 4 . Answers to the question: "What, according to your estimates, will happen with the sales volume of your enterprise in the nearest (1-2 months) perspective?" (total of answers = 100%).

The sales volume will begin to grow

The sales volume will remain at approximately the same level

The sales volume will continue to decrease It is difficult to say, the level of uncertainty in the market is very high the severity of macroeconomic problems in Russia. As in previous surveys, enterprises most often indicated insufficient effective demand among the most acute problems at the end of 2020 in 65.69% of answers. But this is exactly the same share of answers as in the precrisis 2019. Moreover, over the year there was a decrease in the frequency of complaints about problems such as a high level of competition with other Russian manufacturers (31.14% of answers in 2019 and 23.74% of answers in 2020), a high level of competition with foreign manufacturers (22.16% in 2019 and 13.67% in 2020), the inability to obtain a short-term loan (10.18% in 2019 and 6.47% in 2020), and the inability to obtain a long-term loan (14.37% in 2019 and 10.79% in 2020). The frequency of complaints about the high level of taxation also decreased from 50.90% of answers in 2019 to 43.88% of answers in 2020. It is likely that this positive shift is associated with tax incentives that were provided to Russian small and medium enterprises in the second quarter of 2020, as well as a number of large enterprises from the hardest hit industries. In addition, it should be noted that the proportion of complaints about a high level of bureaucracy and corruption in government bodies in 2020 turned out to be the lowest for the entire period of the surveys, 11.51% (Table 5) .

A distinctive feature of the economic crisis in 2020 was the relative stability in the financial and banking sector. Unlike the crises of 1998, 2008, and 2014-2015, there were no significant disruptions in the payment system, bursts of inflation, or a sharp increase in interest rates in Russia. As the survey data show, relations between Russian enterprises and banks were also quite stable and generally avoided the negative impact of the crisis. In particular, the overwhelming number of respondents-80.74%-answered that banks fulfilled their obligations in 2020 at the same level. At the same time, the shares of answers about the improve-ment and deterioration of banks' behavior turned out to be the same (Table 6 ).

In addition, it should be noted that the share of answers about the absence of deliberate delays in payments by banks increased again in 2020. As a result, this share reached its maximum level since 2001 at 84.78% (Table 7) .

However, the depth of interaction between Russian enterprises and banks still leaves much to be desired. In particular, the total share of enterprises receiving loans from banks for the implementation of investment projects amounted to only 20.29% in 2020. This is significantly less than, for example, in 2011-2012 (Table 8) .

Bringing the Russian economy out of the crisis requires efforts in a number of areas. One of these areas is the technological modernization of production [5] [6] [7] [8] [9] . As the survey data show, the current eco- nomic crisis has somewhat changed the views of enterprises regarding the need to modernize production. About a quarter of the surveyed enterprises (and this is almost the maximum for the period of the survey) believe that they do not need modernization at the moment; about two-thirds of the respondents think that partial modernization is sufficient, and only 11.59%-less than ever before-believe that they need a radical technological modernization (Table 9) . Apparently, such a decrease in the need for modernization efforts is associated with a rather pessimistic view of enterprises on the medium-term prospects of the Russian economy. Why must money be spent on modernization if demand for additional products is either falling or growing very slowly? However, regardless of the need to modernize production, the enterprises' own resources, which they can spend on technological innovations, remain generally insufficient. Only 13.43% of the respondents reported that the current volume of investments allowed them to carry out a full modernization. At the same time, another 35.07% of the respondents can carry out partial modernization. Thus, about half of Russian enterprises cannot finance the modernization of production and the introduction of technological innovations as before. This state of affairs established at the end of the 2000s and has barely changed since then (Table 10) .

A key element of technological modernization is the purchase of machinery and equipment [10, 11] . Under the conditions when sanctions restrictions are overlapped on a severe economic crisis, it is very important that the competitiveness of domestic technology be gradually growing. On the one hand, this will make it possible to increase the technological independence of the Russian economy through import substitution. On the other hand, this will give the opportunity of increasing the rate of economic growth due to the advanced development of the national engineering industry.

As for the purchases of machinery and equipment, the frequency of reports on the purchase of new domestic equipment in 2020 again exceeded the frequency of reports on the purchase of new equipment from the far abroad (Table 11 ). This is generally a pleasant fact, but it is largely due to the recent depreciation of the ruble and the rise in the cost of imports.

Meanwhile, the assessments of Russian enterprises in relation to the quality of domestic equipment unfor-tunately did not improve in 2020. Only 7.26% of the respondents considered that the quality of Russian machinery and equipment had improved in most cases (Table 12) .

Only 11.81% of enterprises reported that there was a lot of domestic equipment on the market that was not inferior in quality to foreign alternatives (Table 13 ). In addition, the share of answers that the gap in quality between Russian and foreign technology is decreasing turned out to be less than the share of answers about an increase in this gap, 15.20% compared to 28.00% (Table 14) .

As part of the survey, a study was also carried out on the situation with the terms of the delivery of raw materials and components to Russian enterprises. The Table 10 . Answers to the question: "Does the current level of production investments of your enterprise provide a solution to the problem of a full modernization of production?", % (total of answers = 100%)

Yes, it provides quite fully

It is able to provide only some partial improvements It is able to maintain production at the existing technological level and no more survey data show that at present the vast majority of enterprises do not face significant problems caused by violations in delivery terms. Almost 80% of the respondents noted that delivery terms were almost never violated or rarely violated (Table 15 ). Meanwhile, it should be noted that the share of violations in deliveries that occurred through the fault of transport workers is extremely low, being 5.51% of answers (Table 16) . These data can be considered as an indirect confirmation of the very efficient operation of the modern Russian transport system. It should also be noted that the overwhelming majority of enterprises believe that delays in deliveries usually do not lead to a significant increase in their costs (Table 17) .

As a follow-up to the previous surveys on sustainable development, the state of affairs in the field of environmental modernization of Russian enterprises was investigated and the problem of using the best available technologies (BAT) was raised. The introduction of BAT is provided for by international conventions and agreements that were also ratified in Russia 2 and is an important institutional mechanism aimed both at reducing the negative impact on the environment from industrial enterprises and at modernizing their production facilities.

While the concept of the best available technologies began to take root in Europe and North America in the 1980s 3 , a similar concept in Russia-the best available technologies-was first established only in 2002 4 , although this concept was present in an implicit form in a number of GOSTs on resource conservation, rationing of material costs and other areas. In fact, the process of transferring production to the BAT began in 2014, when the federal law of July 21, 2014, No. 219-FL was adopted, according to which enterprises are required to introduce economically rational technologies that minimize wastes and emissions.

Due to the fact that the BAT principles have been introduced into Russian practice relatively recently, not all Russian industrial enterprises are familiar with this concept. The results of the survey have revealed that 40% of the surveyed enterprises do not know anything about the task of transition to the BAT (Fig. 1) . Meanwhile, the real task of transition to the BAT is faced by 13.85% of enterprises, and almost a quarter of the surveyed enterprises expect such requirements to arise in the future.

About half of the surveyed enterprises (58%) noted a number of expected positive consequences due to the 2 introduction of the BAT system: the opportunity of zeroing fees for negative environmental impact (32.10%) and a real reduction in the burden on the environment (30.86%) were most frequently mentioned (Fig. 2) .

At the same time, an even greater part of the surveyed enterprises (64%) noted the possible negative consequences that they may face in the event of the introduction of the BAT system: one third of enterprises feared that additional costs were not justified in relation to real environmental effects; the second third feared an excessive increase in the cost of production; the third one feared a further increase in the bureaucratic burden (Fig. 3) . Some of the respondents apprehended the growth of investment costs in a short time and difficulties in developing their own systems. The respondents also included the enterprises that did not see any negative consequences from the introduction of the BAT, but such enterprises turned out to be a minority. Table 14 . Answers to the question: "How do you assess the size of the gap between the quality of machinery and equipment of Russian and foreign production in recent years?" (total of answers = 100%)

In recent years the gap in quality has been decreasing

The gap remains about at the same level

The gap in quality continues to grow in favor of imported equipment It should be noted that all surveyed enterprises, which have been assigned the task of transition to the BAT, as well as some enterprises that expect this task to be set in the future, face difficulties in the process of their implementation. Of the surveyed enterprises, 61.67% saw difficulties in an insufficiently developed regulatory and legal mechanism and bureaucratic difficulties, 25% of enterprises face difficulties in calculating specific indicators of production efficiency according to BAT reference books, and 13.33% of enterprises have difficulties in using industry-specific information and technical reference books on the BAT (Fig. 4) . The Russian BAT system is largely based on the experience of foreign countries in this area, since it involves the harmonization of legislation in the field of environmental protection and public health with the international one 5 , but at the same time it has its own characteristics and significant differences. The most significant difference is that the Russian BAT system lacks a comprehensive approach to environmental impact management: permits are issued not for all types of negative impact, but only for emissions and discharges of pollutants.

In this regard, it is important to understand to what extent Russian enterprises are ready for possible further harmonization of the Russian legislation with the international norms. About half of the surveyed enterprises found it difficult to answer this question. But, despite the difficulties of the enterprises in the process of transition to the BAT systems, almost one third of enterprises still believe that the BAT system should be expanded and its influence must also be extended to the regulation of industrial waste and limits on its disposal (Table 18) .

The conclusions from the survey are as follows: 1. The COVID-19 pandemic continues to negatively affect the situation in the Russian economy; however, in general, the severity of the economic crisis in the country had decreased by the end of 2020. At the same time, the share of Russian enterprises that managed to receive anticrisis assistance from the federal authorities had increased significantly by the end of 2020.

2. Russian enterprises still consider that the most significant macroeconomic problems for themselves are insufficient effective demand from consumers, high taxation, lack of quality labor and high prices for energy and transport.

3. Despite the crisis, the relations between Russian enterprises and banks as a whole have not deteriorated.

4. The frequency of purchases of Russian machinery and equipment in 2020 has again outstripped the 5 frequency of purchases of machinery and equipment from the far abroad. However, Russian enterprises still rate the quality of domestic equipment rather low. 5. The situation with the supply of raw materials and components to Russian enterprises looks quite good. In general, delivery terms are not often violated. 6 . A significant part of enterprises are not familiar with the task of transition to the BAT principles and do not have a clear opinion about their further development in Russia.

7. Many Russian enterprises express concern about the possible negative consequences of the introduction of the BAT systems.

8. Nevertheless, many surveyed enterprises have a positive attitude to the implementation of the BAT systems and consider it important to further harmonize the Russian legislation in this area with the international legal norms.

Corona crisis as a challenge for economic policy

The World Bank Improved the Negative GDP Growth Forecast for Russia in 2020

The Ministry of Economic Development Improved the Negative GDP Growth Forecast for Russia in 2020 to 3

Federal State Statistics Service of Russia. Socio-Economic Situation in Russia-2020

External and internal challenges and prospects for the modernization of Russia's economy

Problems of Managing the Development of Large-Scale Socio-Economic Systems

Conditions of the structural and innovation policy for the development of the Russian economy

Priority to structural and technological renewal of the national economy

Global traps for the Russian innovation system

Method for assessing the process of import substitution in the Russian market of investment equipment and its statistical support

Russian market of investment equipment: Stagnation or development

Economic Aspects of Modernization of the Waste Management Sector in Russia

on the Combating of Air Pollution from Industrial Plants

 Table 18 . Answers to the question: "Do you consider it expedient within the framework of the BAT system to introduce control not only for emissions and discharges of pollutants, but also for the formation of industrial waste and the receipt of limits on its disposal?"

Yes No It is difficult to answer November-December 2020 32.14 19.05 48.81