On the Resource Curse and its Effect on Tactics and Strategy of Economic Development

The article calls into question the adequacy of linking the major setbacks in the functioning of Russian economy to the so-called "resource curse". The author acknowledges that an increase in foreign exchange inflow as a result of opening a new deposit of natural resources does create some problems described by the classical "Dutch disease" model. But the inflow of foreign exchange, on the one hand, has a transitory nature and, on the other, cannot devalue the benefits resulting from the increased income. However, an economy with traditionally high share of primary industries is confronted with a problem of different nature - that of an increased volatility of world prices for its exports and, as a result, of the country's income. For such countries it is important to elaborate the efficient mechanism of natural rent collection and to manifest cautious approach to adoption of permanent budget commitments. The author argues that it could be useful in terms of improving the sustainability of the Russian economy and strengthening its competitive position to set up large national reserves of oil. He also defends a position that a country with a significant share of primary sector in its economy should adhere to the regime of "dirty float" of the national currency and pay attention in its monetary policy implementation to several indicators (along with inflation - to exchange rate and interest rates) and to be ready to promptly impose foreign exchange restrictions on capital transactions in case of emergency. The author attracts attention to the significant importance, which the formation of an effective mechanism for the use of rental income has for solving the strategic problem of modernization of the Russian economy.