After the March presidential election, the new Russian government should invest more in education and healthcare to help spur economic growth, the World Bank’s chief executive officer said on Tuesday.
“What we agree is that the new political cycle opens opportunities for new policy ideas to be brought forward,” World Bank CEO Kristalina Georgieva told Reuters in an interview on the sidelines of an economic forum in Moscow.
“The key point is investment in people, in education, in health, in quality of social services. The government recognizes that (but this is) not yet quite reflected in the share of education and health in GDP,” she added.
Georgieva, a Bulgarian national and a former deputy head of the European Commission, said Russia had successfully reined in once stubbornly high inflation, helping to boost consumer confidence, and adopted a fiscal rule that had reduced its vulnerability to oil price fluctuations.
“The question is, what more Russia can do to lift up growth further?”
President Vladimir Putin, in power for 18 years, is widely expected to win a further six-year term in the March election and to reshuffle his government.
According to Finance Minister Anton Siluanov, the government was considering an overhaul of the tax system, partly in order to generate more funds for investment in education, healthcare, and infrastructure.
Russian state spending on education and health each accounted for less than four percent of national output in 2017, Deputy Prime Minister Olga Golodets said in an interview with Russia’s RBC TV last year. These levels of spending are well below those seen in most Western countries.
The World Bank expects the Russian economy to expand by 1.7 percent this year when the global economy is seen growing by 3.1 percent. In 2019 the bank sees Russia’s economic growth picking up to 1.8 percent.
Georgieva also urged Russia to invest more in new technologies, though it is still under Western economic sanctions over its role in the Ukraine crisis and its economy is still hampered by relatively low global energy prices.