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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 complete country, in order to achieve a new quality of life for an incredible number of our citizens.”

Currently, the decision 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 food security doctrine and the federal program “Sustainable development of rural areas.”

The potency of the development of territories is characterized by comparing the effect obtained with the value of the resources or costs used. Determination of the potency of the development of territories is based on a contrast of its results with the price of labour and with the value 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 used for achievement of certain goals. Availability of property potential as a result of economic stability and environmental conditions is understood as an economic potential. The economic interpretation of “potential” regards it as the power 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, which allows taking into account the results of the sustainable management of certain areas. We feel that the economic potential of rural areas can be seen as the qualitative characteristics and quantitative measurement parameter. To get this done it’s essential to define a set of indicators, the composition that depends upon the purposes of evaluation and needs of the assessment subject. Since it’s difficult to offer the priority to any specific criteria, we propose to transport out a comprehensive assessment of the economic potential of rural areas, which allows calculating the integral index, which characterizes the municipality and the region as a whole.

The methodology includes an evaluation of the economic potential of areas as a ranking and as a ranking construction pertaining to the influence of the areas development factors. An important advantage is that the evaluation may be performed on the basis of the official statistics.

Analysis of the literature revealed that currently there are many types of rating, however, inside our opinion, these methodologies differ in the initial group of indicators, algorithm for calculating comparable indicators and rating construction. In this connection, it was chose to consider the previous experience, improve and generalize existing strengths and develop this methodology.

Methodology of the evaluation of the economic potential of rural areas includes 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 strategy of calculating the exact distance from the benchmark); rating construction; analysis of the results obtained, the seek out reserves of increase of the economic potential use efficiency. The qualitative characteristic of the economic potential of the area is the extent of its sustainable development. Comparative evaluation afford them the ability to consider 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 will allow to judge the economic potential of rural areas objectively. Since rural areas are areas, which main activity is the production of agricultural products, the structure of the production potential of the territories includes indicators of the agricultural sector development. At once, the agricultural production has 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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