Assessment of the Level of Economic Development of Rural Areas

At the meeting of the National Projects and Demographic Policy Council the President of the Russian Federation emphasized that “Rural areas have a robust economic, demographic, natural, historical and cultural potential. Our goal is by using it effectively for the main benefit of the entire country, to be able to achieve a fresh standard of living for an incredible number of our citizens.”

Currently, your decision of problems of the development of rural regions of the Russian Federation is carried out in the framework of the thought of long-term socio-economic development, the food security doctrine and the federal program “Sustainable development of rural areas.”

The effectiveness of the development of territories is characterized by comparing the effect obtained with the worth of the resources or costs used. Determination of the potency of the development of territories is dependant on a comparison of its results with the expense of labour and with the worth of productive resources. Development is associated with the thought of economic potential.

The term “potential” means possibilities, sources, tools, supplies, which can be actuated and useful for achievement of certain goals. Accessibility to property potential as a result of economic stability and environmental conditions is understood being an economic potential. The economic interpretation of “potential” regards it as the capability of the economic entity to make sure its long-term performance and achievement of strategic goals using the system of available resources. Economics of Development 7th edition

In this regard, we propose methodology for evaluation of the economic potential of rural areas, allowing taking into account the outcome of the sustainable management of certain areas. We feel that the economic potential of rural areas is seen since the qualitative characteristics and quantitative measurement parameter. To achieve this it is necessary to define some indicators, the composition that depends on the purposes of evaluation and needs of the assessment subject. Since it is difficult to give the priority to any specific criteria, we propose to carry out an extensive assessment of the economic potential of rural areas, allowing calculating the integral index, which characterizes the municipality and the region as a whole.

The methodology includes an assessment of the economic potential of areas as a score and as a score construction regarding the influence of the areas development factors. An important advantage is that the evaluation could be performed on the basis of the official statistics.

Analysis of the literature revealed that currently there are many ways of rating, however, within our opinion, these methodologies differ in the original set of indicators, algorithm for calculating comparable indicators and rating construction. In this connection, it absolutely was decided to take into account the prior experience, improve and generalize existing strengths and develop this methodology.

Methodology of the evaluation of the economic potential of rural areas consists of these stages: justification of the parameters and indicators system characterizing the given parameter; calculation of comparable indicators; calculation of parameters with different methods (additive convolution method; the method of calculating the distance from the benchmark); rating construction; analysis of the outcome obtained, the look for reserves of increase of the economic potential use efficiency. The qualitative characteristic of the economic potential of the area may be the extent of its sustainable development. Comparative evaluation makes it possible to take into account most of the important parameters of economic development which are essential.

We identified these elements in the structure of the economic potential: production potential, employment potential, financial potential, investment potential and consumption potential. In our opinion, this structure enables to gauge the economic potential of rural areas objectively. Since rural areas are areas, which main activity may be the production of agricultural products, the structure of the production potential of the territories includes indicators of the agricultural sector development. At the same time, the agricultural production has got the necessity for manpower, financial, investment and other resources which currently are being used or can be utilized in the industry.

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