The concept, essence and types of national planning

One of the main achievements of human civilization is the systematic development of society. It is planning that allows you to clearly organize, comprehensively justify and coordinate the activities of all parts of the economic system of society in order to achieve this goal.

Planning can be seen as a specific form of social practice of people and as a function of management. It is an effective tool for the implementation of the economic and social policy of the state. In the former socialist countries, planning – centralized directive – was the main form of management of the national economy. The socialist system has become history, the science of socialist planning has not stood the test of time. However, the importance of planning in the socio-economic development of countries aimed at achieving and maintaining high rates of economic growth in order to ensure  a high standard of living of the population is constantly and naturally increasing.

Planning as a form of state regulation is used  in all countries, getting along with market principles of farming. When forming market relations in the Republic of Belarus, it is necessary to see the prospects for its economic and social development. The application of economic mechanisms of the market in combination with science-based planning and forecasting requires  a new approach to state regulation of the economy, fundamentally changes the content of national planning and forecasting.

Planning is a management decision-making process based on the processing of initial information and includes the definition and scientific formulation of goals, means and ways to achieve them through a comparative assessment of alternative options and the selection of the most acceptable of them in the expected development conditions.

National planning is aimed at linking all factors of production and maintaining a balance of natural-material and financial-value flows, ensuring rational and efficient use of resources to achieve the goals and objectives set, which is reflected in the relevant planning document (plan).

It should be borne in mind that the essence of planning is not to develop and bring numerous indicators to the executors, but to scientifically set the goals of the upcoming development and develop effective means of their real achievement.

In terms of the form of manifestation and content, planning can be directive, indicative, strategic.

Policy planning is the process of developing plans that have the force of legal law and ensuring their implementation. Plans that have the force of legal law are binding on all executors, and officials are legally responsible for failure to fulfill the objectives of the plan.

A vivid example of the use of directive planning, as the main form of state regulation of the economy, is the former USSR and its constituent republics, as well as the socialist countries of Eastern Europe. In them, directive planning was used in order to directly influence the center on all links and spheres of the national economy in order to achieve certain goals and ensure a given general direction of development. The plans were targeted and overly detailed. But with all the external form of directive influence on the economy, they were often not fulfilled and completely discredited themselves.

However, the failed experience of using policy planning in these countries should not preclude its application to certain critical issues of national importance. Directive planning, being an alternative to market self-adjustment, is nevertheless not an antithesis of the market. This is a product and an important constitutive element of it, practiced not only by the state, but also by business itself. The same experience of directive planning of the socialist economy testifies to the possibilities of its use for solving such problems as the industrialization of the country, the structural transformation of production, the creation of military-production potential, etc. But it is certain that it is advisable to apply directive planning only in emergency or aggravated situations – war, depression, crisis, natural disasters. At the same time, the scope and timing of its application should be strictly limited.

The most common form of state planning of the socio-economic development of the country throughout the world is indicative planning.

Indicative planning is a means of implementing the socio-economic policy of the state, the main method of its impact on the course of functioning of the market economy. It provides a solution to many issues of socio-economic development, the implementation of which is difficult only by market methods without measures of state influence.

Indicative planning is the process of forming a system of parameters (indicators) characterizing the state and development of the country’s economy, corresponding to the state socio-economic policy, and establishing measures of state influence on social and economic processes in order to achieve these indicators.

As indicators of socio-economic development, it is planned to use indicators characterizing the dynamics, structure and efficiency of the economy, the state of finance, money circulation, the market of goods and securities, price movements, employment, the standard of living of the population, foreign economic relations, etc.

An interconnected and internally balanced system of these indicators (indicators) is designed to give a quantitative description of the socio-economic policy of the state, the implementation of which will be aimed at all measures of state regulation.

The main content of indicative planning is to substantiate the goals, objectives, directions and methods of implementing the state socio-economic policy and is a very effective form of organizing the interaction of all state governing bodies both among themselves and with regional government bodies in the interests of improving the economic system and its individual elements in accordance with the tasks of socio-economic development.

The role of the indicative plan is precisely to indicate where the state needs to intervene and only if the market cannot do so.

The state does not have directive relations with producers, but large capital is no less interested in cooperation with the state, as it needs help in promoting products to the world market, attracting foreign investment, etc.

The constructive role of indicative plans is manifested precisely in the fact that, without constraining the initiatives of private business, they help to outline the general course of enterprise management, informing them about potential demand, the state of affairs in related industries, areas, the state of the labor market, etc. Without them, it is impossible to justify investments, they to some extent affect government spending, since the approval of annual budgets takes place taking into account planned outlines.

Indicative plans make it possible to organically and interconnectedly combine in a single document the concepts of socio-economic policy of the state, forecasts of the functioning of the economy, state programs, the system of economic regulators, supplies for state needs, the volume of state capital investments, as well as issues of management of state-owned enterprises. The indicative plan is based on the priorities for which appropriate incentive mechanisms are created.

At this stage of the formation of market relations, indicative planning is an objective and logical continuation and development of forecasting activities, since the forecasts currently being developed contain, along with their own forecast, a system of economic regulators, state programs, supplies for state needs, the volume of centralized capital investments, i.e. go beyond forecasting as a pure foresight of the development of events.

The effectiveness of indicative planning has been proven by world experience, especially in countries such as Japan and France. With the support of the public sector, it can accelerate the development of the national economy.

Strategic planning is a special type of planning, focused, as a rule, on the long term and determining the strategic goals of the  socio-economic development of the country and the directions for their achievement.

The formation of a strategy is the formation and allocation of goals, the definition and allocation of the necessary means to achieve the goals in the long term.

The most important problem in the framework of state strategic planning is the correct definition of goals and the correct ratio between goals and means. As a rule, strategic goals are related to meeting the needs of people. But their formation is significantly influenced by both internal and external factors. In conditions of limited resources (and this situation is observed in any state), the problem of choosing the main goals is accompanied by the problem of ranking priorities.

Therefore, the distinctive features of strategic planning should be:

allocation of strategic goals that are of decisive importance for the development of the national economy; resource support of the intended goals, both in terms of the volume and structure of resources; taking into account the impact of external and internal factors on the development of the national economy.

The purpose of strategic planning is to ensure, on the basis of the selected priorities, sufficient potential for the future successful development of the national economy.

Strategic planning finds its implementation in long-term planning documents that reflect the national development in the future for 10, 15 years.

According to the planning period, long-term plans (10 years or more), medium-term (usually five years) and current (annual) plans are distinguished. In the practice of planning, all three types of plans are used, which ensure the continuity of planning and the possibility of achieving goals of different time.

In the conditions of the Republic of Belarus, during the transition to market relations, the planning system undergoes significant changes. Its novelty is determined by a fundamentally different role and place in the system of state regulation of the economy, the goals, content and methods of monitoring the implementation of the plan. For 1991- 1995, a combination of directive and indicative planning was characteristic. Planning documents were developed in the form of plans-forecasts, annual programs. However, they did not have a significant impact on the national economy of the republic. Using them instead of a single state plan did not justify itself.

Today, the normative basis of state planning in the Republic of Belarus is the Law
“On State Forecasting and Programs of Socio-Economic Development of the Republic of Belarus”, adopted in 1998.