1. Analysis of opportunities and prospects of development of Russia and the countries of eastern Europe using ‘backwardness vortexes’ methodic Elena Popkova, Doctor of Economics, Professor of Department of ‘World Economy and Economy Theory’, Volgograd State Technical University. Elena Jakovleva, Doctor of Economics, Professor of Department of ‘World Economy’, Voronezh State Forestry Engineering Academy.

2. Theoretical model of ‘backwardness vortexes’ economic expansion of developed countries hinder developing countries from entering into modern world community as equal partners. world isolation and dualism intensifying both within the country and in the international arena

3. Theoretical model of ‘backwardness vortexes’  The depth of this theoretical vortex can be measured by temporal backwardness of a country from the developed countries.  Speed of getting into a vortex can be calculated using formula: V= ∂R/∂C=>0 where V – speed of getting into a vortex; ∂R –marginal result from investing transformational factors (industrial result); ∂C – marginal investment of transformational factors.  The closer is V to zero; the faster is the process of drifting into a ‘vortex’. The only way out from the globalized ‘backwardness vortex’ is not the catching up development, but formation, origin of new development circles on the basis of new innovation cycles.

4. Analysis of economy development of Russia and the countries of Eastern Europe using the ‘backwardness vortexes’ methodic Country GDP per capita, 2003 Year of comparable average level GDP per capita, 2005 Year of comparable average level GDP per capita, 2007 Year of comparable average level GDP per capita, 2009 Year of comparable average level GDP per capita, 2012 Year of comparable average level Russia92541977118531979167431984192271987235491990 Belarus6578197386401976110861979126941980155791983 Bulgaria8213197698091977123441980136171981159331983 Hungary153491983169751984189231986202491987215701988 Moldavia1916196523621965272319652854196534241966 Poland119871979137841981167481984187961986219031988 Romania7681197593611977126651980146431982165181984 Ukraine4498196755831971695419736312197274181974 Czech Republic 187651986212641988254151992256451992264261993 The USA382252003425162005463492007453052009499652012

5. Year of comparable average level of Russia and the countries of Eastern Europe in 2012 Moldavia 1966 Ukraine 1974 Belarus 1983 Bulgaria 1983 Romania 1984 Hungary 1988 Poland 1988 Russia 1990 Czech Republic 1993

6. Calculation of ‘backwardness vortexes’ in Russia and the countries of Eastern Europe Region Backwardness in 2003, years Depth Rate Backwardness in 2005, years Depth Rate Backwardness in 2007, years Depth Rate Backwardness in 2009, years Depth Rate Backwardness in 2012, years Depth Rate Russia26 0,226 0,223 -0,322 -0,122 0,0 Belarus30 0,329 -0,128 -0,129 0,129 0,1 Bulgaria27 0,328 0,127 -0,128 0,129 0,1 Hungary20 0,121 0,121 0,122 0,124 0,3 Moldavia38 0,440 0,242 0,244 0,246 0,2 Poland24 0,224 0,023 -0,123 0,024 0,1 Romania28 0,228 0,027 -0,127 0,028 0,1 Ukraine36 0,434 -0,234 0,037 0,338 0,1 Czech Republic 17 0,117 0,015 -0,217 0,219 0,2

7. GDP structure of Russia and the countries of Eastern Europe in 2012 Sector of economyRussia The countries of Eastern Europe Agriculture, hunting and forestry 4,714 Mining 10,90,5 Manufacturing industries 15,28 Producing and distribution of electric energy, gas and water 5,12 Construction 6,35 Wholesale and retail trading 14,56 Hotels and restaurants (touristic sector) 0,510,5 Transport and communication 8,26,4 Financial activity 7,113,5 Operations with real estate, rent and accordance of services 23,9 Public administration and provision of military security; social insurance 13,58,4 Education 25,1 Health protection and accordance of social services 26,7 Other sectors of economy 810

8. Analysis of economy development of Russia and the countries of Eastern Europe using the ‘backwardness vortexes’ methodic Drifting the economy of Russia and of the countries of Eastern Europe into ‘backwardness vortex’ Employing of natural resources Forced development of service sphere Postindustrial economy formation

9. Recommendations In order to find ways out from the ‘backwardness vortex’ Russia and the countries of Eastern Europe need qualitative transformation of economic growth They need to move to a new qualitative level, at which effective economic growth administration on the level of state, business and society can be achieved. Therefor it is necessary to form competitive manufacture in global scale in priority sectors of economy. For Russia raw resources processing is such manufacture, and for the countries of Eastern Europe – manufacturing of production for touristiс sector of economy.

10. Thank you for your attention! Elena Popkova, Doctor of Economics, Professor of Department of ‘World Economy and Economy Theory’, Volgograd State Technical University. Elena Jakovleva, Doctor of Economics, Professor of Department of ‘World Economy’, Voronezh State Forestry Engineering Academy.