Assessment of the Degree 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 benefit of the whole country, in order to achieve a fresh quality of life for an incredible number of our citizens.”

Currently, your choice of problems of the development of rural aspects of the Russian Federation is carried out in the framework of the thought of long-term socio-economic development, the meals 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 effectiveness of the development of territories is founded on a contrast of its results with the cost of labour and with the worth of productive resources. Development is related to the thought of economic potential. Economics of Development 7e

The phrase “potential” means possibilities, sources, tools, supplies, which is often actuated and employed for achievement of certain goals. Option of property potential because of the economic stability and environmental conditions is understood as an economic potential. The economic interpretation of “potential” regards it as the capability of the economic entity to ensure its long-term performance and achievement of strategic goals utilizing the system of available resources.

In this regard, we propose methodology for evaluation of the economic potential of rural areas, allowing considering the outcome of the sustainable management of certain areas. We feel that the economic potential of rural areas is seen because the qualitative characteristics and quantitative measurement parameter. To do this it is necessary to define a set of indicators, the composition of which is dependent upon 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 transport 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 status and as a status construction regarding the influence of the areas development factors. An important advantage is that the evaluation could be performed based on the official statistics.

Analysis of the literature indicated that currently there are various methods of rating, however, within our opinion, these methodologies differ in the initial set of indicators, algorithm for calculating comparable indicators and rating construction. In this connection, it was made a decision to consider the last experience, improve and generalize existing strengths and develop this methodology.

Methodology of the evaluation of the economic potential of rural areas contains the next 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 strategy of calculating the length from the benchmark); rating construction; analysis of the outcome obtained, the seek out reserves of increase of the economic potential use efficiency. The qualitative characteristic of the economic potential of the location may be the extent of its sustainable development. Comparative evaluation makes it possible to consider most of the important parameters of economic development which are essential.

We identified the next elements in the structure of the economic potential: production potential, employment potential, financial potential, investment potential and consumption potential. In our opinion, this structure will allow 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 frame, 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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