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Journal number 1 ∘ Gyulshen Zayd kyzy Yuzbashieva Tariel Gurbanov Asif Mustafayev
The significance of structural changes in the process of strengthening government intervention in the economy

Expanded Summary

The article “The Importance of Structural Changes in the Process of Strengthening State Intervention in the Economy” notes that one of the most important tasks of structural policy is the influence of the state on the formation of effective proportions between the public and private sectors. The task is not justification of the need and significance of the public sector, but in determining its scale and effective correlation, interaction with the private sector. It is advisable to study not only the modern structure, but also the structural shifts occurring recently. An important factor in economic growth is the economic structure, i.e. what potential growth is it capable of, what structural changes will lead to future growth, and which will slow down, on this basis, the increase in economic activity, ensuring the competitiveness and efficiency of the economy.

The article also states that it is important to switch from the government’s chosen course to purchase new technologies abroad and from there to invite specialists to revive their science and train their specialists, realize the intellectual potential of society in the context of the transition to an innovative development path. The structure of innovative processes is important, that is, effective innovative processes should have a repeating, iterative nature (checking and consistent approach to the conditions for achieving the result), as it provides quick practical development of promising ideas and rejection of unsuccessful ideas, the transition from traditional to innovative. This should not be about increasing the state’s presence in the economy, but about improving the efficiency and quality of state regulation, serious and competent support for developing entrepreneurship and market infrastructure, modernization of industry and other industries. It is necessary to maintain an optimum in the relations between direct and indirect state intervention, not allowing the former to prevail over the latter, and not allowing the state bureaucratic apparatus to parasitize in the private sector, business. Real and effective implementation of many projects does not depend on the amount of investment (money invested), but on the quality and effectiveness of the management system. It is more efficient to optimize government spending and look for the missing funds there. The real reason for the price increase is not the excess of money in the economy, but the lack of proper coordination, the presence of monopolies and periodic devaluations, which under the pretext of lowering inflation worsen the situation in the economy.

It was later noted that economic policy should generate and stimulate activities that will bring benefits and services in the future that are poorly developed or not developed so far. At one time, liberal theorists tried to prove that it was necessary to separate the economic function from the state, which would lead to the removal of the government from the control of state holdings and state-owned companies (the proposal did not pass). Today it is implemented at three levels: the first level is “feeders” in the form of countless development institutions, and no one knows what they are developing, nevertheless, they all have buildings, transport, and receive huge amounts of money from the budget; the second level-state corporations-have a state “roof” and can take full advantage of state-owned firms, but in their business activities they act as private companies that are free from coordination with state property management bodies (sell property, mortgage, take loans, issue shares); the third level is companies with state participation, in which the controlling stake formally belongs to the state, but the state does not have a real influence on these companies, but the management in them fully controls the situation.

The macroeconomic policy of increasing investment, government spending and the level of monetization of the economy is important while reducing interest rates and stimulating the overflow of resources from raw materials and transactional sectors to production sectors, including labor potential. It is important to develop the consumer sector and create promising products of future competitiveness. Formally, the state has big property, but in reality it is in private hands. As a result, revenues from this property go past the treasury. Therefore, it is important to create a real market environment and the real development of competition. Improve state property management. A high state share in the economy is a consequence, not a cause of economic distortions. To do this, you need to introduce strategic planning, which gives a clear forecast and benchmarks that allow corporations and businesses to build their own strategies within a common line.

Keywords: structural changes, government intervention, economic growth, model, social policy, structural policy, public sector, economic reforms, industry, etc.