Sergei Glazyev, Advisor to the President and Academician of the Russian Academy of Sciences, released a very important article on the current geopolitical situation of Russia.
This article calls by its proper name many things that, until recently, were not customary to be voiced outside closed offices.
In particular, Glazyev explains in detail what reasons force the United States to strive for the complete defeat of our country, and proposes a plan, following which will allow Russia to protect itself from this terrible threat.
I highly recommend spending an hour or two and carefully reading Sergei Glazyev’s entire article. The Kremlin’s latest decisions suggest that it is on the basis of this detailed article that Russia’s development strategy for the next 10 years will be developed:
I will briefly outline the main points of the article in order to convince doubters to spend time thoughtfully studying the original text. Please take into account the fact that I will present theses in bare form: without argumentative context, without graphs and without references to other materials. If you wish, you can find all the details in the original article.
1. The United States is behind the events in Ukraine - this is the only force that benefits from the escalation of the conflict.
By organizing a major war in Europe, the United States hopes to successfully survive the crisis that is befalling them, and then enter a new long wave of economic growth.
2. There are three scenarios for the development of events in the medium term.
The optimistic scenario—a controlled and peaceful globalization beneficial for all countries—is currently unrealistic. The American elites are not ready for it, since it will mean the loss of their leadership.
A catastrophic scenario - the collapse of the Anglo-Saxon financial system and the disintegration of the planet into a number of economic regions closed from each other - is quite possible. If such a scenario is realized, the golden billion will suffer the most, since it will lose the ability to siphon resources from the remaining 6 billion of the Earth's population.
The inertial scenario is the preservation of the current order of things by devouring “peripheral” countries. This scenario is most interesting to the American elites and, in fact, it is within the framework of this scenario that US actions in Ukraine fit.
3. Liberal ideology now creates risks on a planetary scale. Concentrated capital acts in its own interests - and these interests often require the plunder and destruction of entire states.
At the same time, what is important, liberal ideology also harms the United States itself: the US ruling circles often act to the detriment of America and Americans.
4. The US strategy in the field of dominance is very simple: they dominate in all possible areas at once, starting with the financial and military areas. A kind of vicious circle is formed.
Military power allows Americans to collect so-called dollar seigniorage from all over the world - to print dollars for themselves, thereby devaluing the assets of other countries. The collected dollars are used, in particular, to purchase scientists from all over the world and to develop new technologies. New technologies allow the Americans to strengthen their military superiority, and, coupled with pushing through the free market that is disastrous for other countries, also obtain new resources.
5. By now, the US strategy of global dominance has almost stopped working. The BRICS countries may still be less developed than the United States, but they are 10 times larger than America in terms of population. The BRICS countries do not need to spend huge sums on military budgets; in addition, they are in an advantageous position of “catching up” and can not develop new technologies, but copy them.
The share of the dollar in global payments is also declining, and soon the Americans will be forced to curtail their military and scientific programs.
6. The Americans are trying to get out of the trap in their usual way: by starting a global war. Using the strategy of “controlled chaos,” the Americans are trying to ignite a series of military conflicts throughout the planet. In particular, we have already seen the “work” of Americans in North Africa, Iraq, Syria and Ukraine.
The First and Second World Wars led to a huge outflow of brains and capital from warring Europe to the United States. The Cold War and the subsequent collapse of the socialist camp gave the United States hundreds of thousands of specialists, unique technologies, a huge amount of valuable resources and more than a trillion dollars in net profit.
Americans are also profiting from current conflicts. Looting museums, seizing assets, exporting gold reserves, gaining control of natural resources... every American war is fought strictly "in the plus."
7. The United States prefers to wage war by indirect methods - using tactics of bribery and deception of the ruling elites.
Initially, control is established over local elites by drawing politicians, businessmen and promising youth into special relations with the United States. Then the Americans begin military operations with the wrong hands and, pitting one force against another, achieve the desired goals. NATO troops are brought in only when these methods succeed in weakening the enemy to such an extent that he can no longer resist.
The Western side considers itself strong enough not to fulfill its obligations. This is her kind of calling card.
So, for example, Saddam Hussein was deceived, whom the States first allowed to attack Kuwait, and whom the States then demonstrably punished. This is how Yanukovych was deceived, who was persuaded not to use force just to make him a refugee.
Milosevic, Gaddafi... the list of leaders deceived by the Americans is very extensive.
8. The immediate goal of the Americans in Ukraine is to separate Ukraine from Russia. However, the signing of the European Association Agreement is only the beginning of a big plan.
Ultimately, the Americans expect to gain complete control over the European Union and Russia, and then use this advantage in the fight against China - while they perceive Russia as a rebellious colony, and plan to punish us by completely ruining Russia and dividing it into several warring countries.
What is important is that the United States itself loses practically nothing from the war it started in Ukraine. They are on another continent and only benefit from this war.
9. Is it possible to prevent a global war in Europe? Yes it is possible. To do this, it is enough to deprive the Ukrainian Nazis of support from the United States.
The financial pyramid of US debt obligations is now holding on with all its strength and is ready to collapse at any moment. If major US creditors dump their hoarded dollars and Treasuries into the market, the dollar will collapse.
At the same time, losses for Russia, Europe and China will be much less than from the next world war unleashed by the Americans.
Another direction of attack is the destruction of the monopoly of pro-American media in Europe. If the media in the European Union express two points of view on current events, European politicians will be forced to act not in the interests of the United States, but in the interests of their states.
After the collapse of the dollar pyramid, Americans will not be able to pay Germany and Japan for the maintenance of their military bases - and then these two countries defeated during World War II will be able to free themselves from American rule.
10. The Americans have suffered several sensitive defeats in recent years. South Ossetia, Syria, Crimea... having encountered decisive resistance in these areas, the Americans were forced to retreat. A couple more defeats, and the Americans will lose faith in their omnipotence.
The American oligarchy will not take risks unless it is sure that the war will not spread to US territory.
The current war in Donbass is of the greatest historical significance. If the militia manages to defend itself against the junta, it will mean the collapse of the US image as an indestructible superpower.
The Americans understand this very well, so they will use all their capabilities to drag Russia into a war with the Ukrainian army or destroy the Resistance.
Russia must firmly declare that if NATO sends troops into Ukraine, Russia will consider this a declaration of war: with all the ensuing consequences for the territories of the United States and the European Union.
11. A global anti-war coalition must be created that can resist US aggression. This coalition must put forward a program for stabilizing the world economy and establishing a fair world order in which the interests of all countries will be taken into account.
The anti-war coalition must be powerful enough to withstand the resistance of the United States and the G7 countries, which will fight to the last for their right to siphon resources from other regions of the planet.
The sustainable development paradigm rejects confrontation and competition as engines of economic growth - instead of investing in wars, it implies investing in science, medicine and education.
12. American strategists are now betting on the collapse of Russia from within by inciting internal social and interethnic conflicts. This, in particular, is evidenced by the appointment of the notorious John Tefft to the post of ambassador.
13. The anti-war coalition, the creation of which Russia may try to initiate on the basis of BRICS, should begin with the creation of a universal payment system, the creation of an analogue of the Western banking system SWIFT and the creation of its own rating agencies.
Russia will have to take on the leading role in the coalition, since only we have the military power and authority necessary for this. In addition, we are now bearing the brunt of the Americans' blow.
14. The Russian economy must be protected from the global financial market. In particular, you need to do the following:
* Access to subsoil development and other strategic sectors should be provided only to entirely Russian companies;
* The ultimate owners of systemically important enterprises must register their property in Russia;
* Companies located offshore must pay taxes in full;
* Channels for illegal and semi-legal withdrawal of money abroad must be closed;
* Taxes on financial speculation and the export of capital should be introduced.
* Dollar assets must be converted into gold and the currencies of friendly countries;
* Export of hydrocarbons, metals and other products must be carried out in rubles.
* State corporations should stop taking loans abroad;
15. The world is now moving to a new technological structure. Russia must make a technological breakthrough - otherwise our economy will be locked in the trap of catch-up development and raw material specialization for another 20-30 years.
For this, conditions must be created for the development of technology. It is especially important to create mechanisms for internal long-term cheap credit - now a significant part of the problems in the Russian economy are caused precisely by a chronic shortage of money.
16. The company must be consolidated. To do this, it is necessary to radically reduce social inequality, increase the cost of living to the real level and introduce a progressive tax on personal income.
In addition, spending on education and health care must be increased.
It is necessary to restore the institution of property confiscation and strengthen control over officials by civil society.
PS. Above I listed only some of the points from Sergei Glazyev’s article. In the original article, these theses are given in much more detail, with all the explanations and justifications.
Update. The full text of the article with illustrations can be downloaded from one of these links.
In this article I will try to present in the most accessible language the essence of Glazyev’s proposals and the criticism of his opponents.
Academician Glazyev suggests:
Start the development of industry in Russia. What do I need to do?
1) For this you need cheap targeted loans for a long period at 0-2% for 5-10 years. Now we have loans at 15% and higher, while in the West they are 2-5%. If our entrepreneur takes a loan at 15%, and in the West an entrepreneur takes a loan at 2%, then the products of our plant will be significantly more expensive, because our entrepreneur with a loan at 15%, in order to pay interest on the loan, will have to set a higher price goods. Who will buy more expensive goods if there is a similar one cheaper? - Few people. That’s why our entrepreneurs don’t take out such loans! There's no point, you'll go broke.
Why do we now have 15% loans? Because the Central Bank gives loans to commercial banks at a high refinancing rate of 8.25%, and in the West, the US Federal Reserve and the ECB give loans to Western banks at almost a zero rate (the Fed, for example, has a rate of 0.25%). Accordingly, loans are cheaper in the West. It’s more expensive here, our banks take money from the Central Bank at 8.25% and then add their own percentage and give loans to enterprises at 15%.
Now let’s look at the issue of inflation, because many people ask and don’t understand, saying that if you print money, there will be inflation. No, and Glazyev said about this, that if you give money specifically for the construction of factories, then there will be no inflation. Because inflation depends not only on the amount of money in the economy, but also on the amount of goods!!! If you produce 100 pieces of conditional goods and you have printed only 100 rubles, then each product will cost on average 1 ruble, if you print another 100 rubles, then it turns out that there are only 100 pieces of goods left, but the money is already 200 rubles, i.e. That is, each product will cost 2 rubles, that is, you have inflation (rise in price of goods). If you give money for the construction of factories, then not only the amount of money increases, but also the amount of goods!!! because new factories will produce products, so not only will the amount of money increase, but also the amount of goods will increase and there will be no inflation! But money should be given specifically for the construction of factories.
Now we move on to the third point, Glazyev’s program. In order to give targeted loans, you need to know what to give to, to which factories. To do this, Glazyev suggests introducing 3) strategic development planning. This can be implemented in different ways. Glazyev mentioned in particular that in Japan there were special forums where representatives of science, business and officials met and discussed what was promising to develop, determined directions, and as you can see, Japan was not mistaken in choosing the development of electronics. This is also an import substitution program, it’s elementary, you look at the customs data, what and how much was imported into the country in a year, accordingly these goods need to be produced, build a plant and produce. (So, regarding strategic planning, there was a howl that this was supposedly a return to the USSR, although Glazyev did not propose anything like that, he talks about the experience of advanced countries, what they did. Think about who is criticizing him and why.)
These are the most important and main points of the program: 1) cheap targeted loans 2) responsibility of banks for their use 3) strategic planning. The Internet is full of videos with Glazyev’s speeches, where he explains this. He devotes a lot of time there to tell what is happening in the country, how the Central Bank is pursuing a crazy policy, how banks are speculating on the stock exchange and dropping the ruble exchange rate, but the Central Bank is not stopping them, and so on. From his speeches, I extracted exactly the essence so that you could evaluate what is proposed to be done. It is necessary to understand who criticizes Glazyev and why; his critics offer nothing. If the criticism is constructive, it should be written there how to develop industry in Russia, but nothing is written about this, the goal is different, so that nothing is done, they simply write that what Glazyev is proposing is not correct. Therefore, if you see Glazyev’s criticism, look there for proposals for the development of industry in Russia, if you haven’t found it, then it is already clear that this is clearly not being written in order to develop Russia. Speculator banks do not need any responsibility, and Glazyev constantly talks about the introduction of responsibility; they will fight to the last, so that nothing changes, so that everything continues as before, speculation, ruble collapses, life in debt from the West.
In recent months, Igor Shuvalov has become a real “favorite” of anti-corruption fighters led by. They found him allegedly undeclared Rolls-Royce, ten apartments in a high-rise building on Kotelnicheskaya Embankment and a business jet. So far, the Deputy Prime Minister's lawyers have managed to prove that there were no violations of the law in his actions.
Outwardly, the scandals did not affect Shuvalov’s financial weight in any way. He continues to play a key role in the government, being responsible for the financial and economic bloc.
Glazyev refused to comment on the substance of this “leak.” But if the suspicions against him are true, then the figure of the presidential adviser takes on a completely different weight and meaning.
A person conducting secret operations for the Kremlin is not the same as a “mad professor” telling everyone about the benefits of emissions, which Glazyev’s opponents often try to portray him as.
However, this will be a discovery for the not very observant public. Glazyev's biography contains an impressive list of administrative positions and achievements. We should not forget that it was Glazyev who implemented the political agreements between Russia, Belarus and Kazakhstan, holding the position of executive secretary of the Customs Union Commission from 2009 to 2012.
Glazyev also worked in the government. In 1991, he became a deputy on the Foreign Economic Relations Committee, and the following year, when Aven left the government, he became the Minister of Foreign Economic Relations of Russia.
Today, with the name of Glazyev, liberal economists scare the impressionable public, and he himself, without mincing words, denounces the Ministry of Finance and the Central Bank for their economic and monetary policies.
The presidential adviser calls the actions of the Central Bank “a path to economic disaster,” and the financial department’s plans to freeze budget spending for the next three years are “an absolutely insane measure.”
Some time ago, together with members of the Stolypin Club, he wrote the “Economics of Growth” program. A key place in it is given to increasing investments in the real sector, including through targeted emissions. For this, liberal economists led by Alexei Kudrin regularly attack him. “Dear Alexey” Glazyev recently wrote a letter in which he pointed out eight misconceptions of the ex-Minister of Finance.
Kudrin reacted to this on Twitter:
“Sergei Glazyev found eight errors in the program that we are still writing. “I haven’t read Pasternak, but I condemn him.”
Glazyev reacted in his characteristic manner: “Kudrin is not Pasternak, but a mouthpiece, an executor of the Washington consensus. It’s strange that Kudrin forgot what he talked about at the Economic Council. After all, the letter was about his report, and not about the program.”
Best Finance Minister
Alexey Kudrin. Photo: Sergey Karpukhin/Reuters
In the 2000s, Kudrin de facto became Putin's chief economic adviser. In 2004, Britain named him the world's best finance minister of the year.
One of Kudrin’s main achievements was the creation of a stabilization fund in which “extra” petrodollars were accumulated. On September 1, 2008, a couple of weeks before the start of the acute phase of the global financial crisis, the size of the stabilization fund reached its maximum - $142.6 billion (data), which allowed Russia to survive the difficult 2009 quite calmly.
In 2010, Kudrin received the title of “best finance minister of the year” from the British. The award found the hero for the fact that he, “overcoming significant political pressure, achieved the creation of a Reserve Fund, which allowed Russia to emerge from the global financial crisis in much better shape than experts expected,” explained the magazine’s publisher Padraic Fallon at the time.
But despite his status as a “cult figure” and Putin’s closest ally, Alexei Kudrin’s administrative star quickly and suddenly declined in September 2011.
While in the United States, in a conversation with reporters, he said that after the 2012 presidential elections he would not go to work in Medvedev’s government.
“I have a number of disagreements with Medvedev on economic policy, they primarily relate to significant spending on military purposes. They don't allow me to go to this government. I don’t consider this option for myself; I will certainly refuse,” he said.
Medvedev, who at that time was the President of Russia, at the next meeting with the participation of members of the government, said that “such statements made in the United States look indecent and cannot be justified in any way,” “nobody has canceled discipline and subordination in the government.” , and “if you, Alexey Leonidovich, do not agree with course president, and the government is pursuing the president’s course, you can write a letter of resignation.”
The situation was difficult, and Vladimir Putin did not save his comrade. Since then, Alexey Kudrin has not held any positions in government structures, although he remained in the president’s inner circle.
Last year they began to look for a place for him, but it turned out to be impossible to fit him into Medvedev’s government, and only this year Kudrin became head of the board of the Center for Strategic Research and deputy chairman of the economic council under the president (the chairman of the council is Vladimir Putin himself).
He prefers not to talk about the program being prepared under his leadership.
“I can say that our document will not become a set of templates; it will respond to both old, chronic and new challenges. Its main goal is a significant increase in living standards, which, by the way, has been declining for the third year in a row,” Kudrin said in a recent interview.
Alexey Kudrin advocates for unpopular structural and institutional reforms, such as raising the retirement age. He, unlike Glazyev, fully supports the Ministry of Finance’s policy of reducing budget expenditures and the Central Bank’s actions to reduce inflation.
Queen of Finance
Elvira Nabiullina. Photo: Pavel Smertin/TASS
The fragile, teacher-like chairman of the Bank of Russia, Elvira Nabiullina, makes you want to help her check her homework. But the first impression is deceptive: she speaks quietly, but everyone hears her, and the metal in her voice leaves no doubt that you will have to answer to the fullest extent for unfinished work.
She has a long-standing business relationship with Vladimir Putin. As vice president of the Center for Strategic Research, she participated in the development of the program for his first presidential term, then headed this fund, worked as deputy minister and minister of economic development, and assistant to the president. Vladimir Putin, without a doubt, values Nabiullina as a professional.
In June 2013, she took charge, and then no one could have imagined that a year and a half later she would have to face a deep crisis and panic in the foreign exchange market.
Some experts assess her actions as a failure; some, on the contrary, believe that she worked perfectly, having previously let the ruble float freely and sharply increased the key rate from 10.5% (as of December 12, 2014) to 17% (as of December 16, 2014). of the year).
Nabiullina continues to defend the chosen course, arguing that there is no alternative to the floating exchange rate of the ruble, and the main goal of the Central Bank is to reduce inflation to 4% by the end of 2017, and therefore keeps the rate at a level above current inflation.
She believes that this is a necessary condition for sustainable economic growth, and is ready to sacrifice current indicators by limiting the volume of lending to the population and the corporate sector through high rates.
The only way to achieve high GDP growth rates is through structural reforms and improving the investment climate, she echoes Alexei Kudrin.
“Monetary policy together with fiscal policy can ensure macroeconomic stability, but this is not enough for sustainable economic growth. The most important structural reform is improving the business climate. First of all, measures are needed to stimulate competition, deregulate the economy, reduce the share of state-owned and near-state companies, protect property rights and minority shareholders,” says Nabiullina.
Reducing budget expenditures, a new pension reform, which provides for raising the retirement age and maintaining the funded component, will contribute to sustainable growth, but emissions are not what Russia needs, the team of Central Bank economists believes.
Ace Gref and the gray cardinal
German Gref and Andrey Belousov. Photo: Valery Levitin/RIA Novosti
Elvira Nabiullina and Alexey Kudrin are united in a “triple alliance” by German Gref. He worked together with Kudrin and Putin in the St. Petersburg mayor's office and headed the Central Social Research Center.
As some analysts write, it was created specifically “for Gref,” and for seven years he tried to implement a program of market reforms. To put it mildly, not everything worked out, including because of the permanent conflict with the Prime Minister. But Gref’s merits were noted, and after the ministry he was entrusted with leading. For a long time he was predominantly absorbed in the affairs of the country's largest bank, but in the last couple of years Gref has been gushing with different ideas.
Among his favorite topics are public administration reform and Russia's technological lag behind the West. The ex-minister’s statements are often on the verge of a foul, but some of his ideas are already being implemented. For example, the project management method, beloved by the head of Sberbank, is reflected in the form of the Council for Strategic Development and Priority Projects.
The most negative reaction was caused by Gref’s words about Russia as a downshifter country.
“We lost the competition, to be honest. And this technological enslavement, I would say that we are among the countries that are losing, on the list of downshifter countries,” he said at the Gaidar Forum this year. — Countries and people who managed to adapt in time and invest in this are the winners today. Countries that have not had time to adapt the entire social system and all institutions to their own economy will lose greatly. And the gap will be greater than during the last industrial revolution.”
Gref supports the policies of the Central Bank and the Ministry of Finance, agrees with Alexei Kudrin on many positions and, like them, cannot stand the ideas of Sergei Glazyev.
This triumvirate of Kudrin - Nabiullina - Gref, as well as the Minister of Finance, would have “gobbled up” Glazyev and the entire Stolypin Club without a trace, if not for presidential assistant Andrei Belousov.
Belousov, like Glazyev, studied at the Faculty of Economics, worked at the Central Economics and Mathematics Institute of the Russian Academy of Sciences, and came to the government from the Institute of Economic Forecasting of the Russian Academy of Sciences only in 2006. As Deputy Minister of Economic Development, he worked with both Gref and Nabiullina, and throughout the entire period of Vladimir Putin’s premiership (2008-2012) he worked in the government apparatus as director of the department of economics and finance.
Putin, having regained the presidency, appointed Belousov minister of economic development, but then, about a year later, returned him to his personal control, appointing him as his assistant.
Belousov is cautious in his assessments and statements and prefers not to support one side or another. But largely thanks to him, “Economics of Growth” did not disappear in the bowels of the presidential administration, but continues to be discussed as some kind of alternative economic course.
He hardly criticizes the Central Bank, saying that the regulator “never makes mistakes,” but makes comments that the ruble exchange rate is too high today.
“I mean that this both reduces budget revenues and increases budget problems. And this reduces the competitiveness of Russian industry and agriculture, in part, I want to emphasize this, by devaluing the tasks of import substitution,” Belousov said in July of this year.
He prefers to remain in the shadows, but his influence, including by virtue of his position, is very great.
Shuvalov, Glazyev, Kudrin, Nabiullina, Belousov - all of them have a chance to convince Vladimir Putin of their indispensability and receive the highest possible post in the “fourth term” government. But there is also a very wide circle of experts and officials who participate in the competition. We will find out who the president will bet on only after signing the decrees on the appointment of the ministers of economy and finance and the chairman of the government.
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The conferences created by our colleague Igor Golubev contain abstracts from the sensational report of Academician S. Glazyev. However, the text of the report is quite large. Understanding many of the proposals of the excellent economist requires thorough preparation. For those interested, the full text is in one place
http://www.business-gazeta.ru/article/140998/
Below are the comments to the report.which highlight its main accents. Comments were published in the online newspaper “Nakanune.ru”
Liberal critics unleashed their “righteous” anger on the report of academician Sergei Glazyev for the Security Council commission. And these are the same financial economists who have been at the helm of the Russian economy since the early 90s. These are those who allowed several severe economic crises in Russia, and they are now declaring that everything is in order, and the upcoming crisis is not a rake at all. In return, the Ministry of Finance proposed raising the retirement age as a method of saving state reserves.
Another alternative is to increase the national debt, but the priority is still age.
Why were our liberal financial economists so afraid of this report? So what should you do? Sergei Andreev, director of the Center for Regional Development of the Academy of National Economy and Civil Service under the President of the Russian Federation, spoke about this in a conversation with Nakanune.RU.
Question: The liberal media and financiers are still discussing Sergei Glazyev’s report and say that with these measures we will face hyperinflation, terrible crises and, in general, pitch darkness in North Korea. The academic's supporters say on the contrary that these are the right decisions. From your point of view, how should we view this report and the proposed measures?
Sergey Andreev: This report clearly buries everything on which the previous economy was built, and it was built on thieves’ principles, which make it possible to build schemes, for example, in such a way that private individuals borrow, but he pays the state pays their debts for them. Or another example: they give money to banks, but the banks do not deliver it to industry, to the real sector, but they introduce financial fraud and make a lot of money from this, then this also allows, in a certain sense, a bunch of people to profit. And since they are united by class interests, they are not liberals at all, they are simply, relatively speaking, people who are attached to the budget and organized system of power in such a way that it lines their pockets, allowing them not to bear responsibility for it. What reaction do you expect from them?
We have the same thing now with industry - The decline in industrial production in our country is such that it is actually stagflation, the loss of entire industries. And all industries are interconnected - you cannot take a gear out of a machine and then say that the rest of the machine is fine. Therefore, in this regard, Glazyev spoke from general, conceptual positions. He doesn’t say that any particular things are wrong, he says that the system is wrong, and the whole system allows someone to steal, who runs these liberal media. Glazyev insists on strict economic regulation by the state. He says about mobilization economy that it needs centralized planned management with the involvement of resources and private, and government in the same direction – for development. In turn, this means that the state must finally let business breathe and stop stealing. Well, will those who steal like it? To those who are strangling the economy with the hands of these liberals who are now in government?
I think we should pay attention not to the effect, but to the cause - Glazyev has been talking about this for a very long time. His last book simply calls to mobilization economy on the eve of a war that was actually declared for our country. Therefore, as an economist, I welcome him here, but in the political sense, I understand that there are no prospects for a significant break yet. We are being driven towards the collapse of the country, this is also obvious.
Question: And if we consider the situation outside the report, how are things going, where is everything going?
Sergey Andreev: There are factors that break down the economy in key areas. Primakov, who told all this to Putin, in one of his interviews said everything that he considers correct to say, discarding diplomatic equivocations. Everything that is being done is being done incorrectly from the point of view of state interests. Of course, few people expected this from him, but nothing has changed; now Glazyev says this as a scientist-economist.
And society tolerates everything that happens. And it is important to understand when a lightning-fast change in public sentiment will occur. When every seventh person is below the poverty line - not yet. But then there is no need to blame the “fifth column”, no need to say that the enemies came up with this and under external sanctions we feel so bad. What sanctions if trade turnover with America has increased - deputies spoke about this in the State Duma and cited figures? This is all camouflage, but Glazyev highlights the essence. Naturally, neither the liberals nor those who are strangling their own country with the hands of our government like him.
We now have about a quarter of budget revenues going to to government needs, for the needs of public administration. A quarter goes to officials - for payments, for all sorts of their events, cars, and so on. It's official. The number of officials in our country has increased to approximately 5–6 million people; the expenditure on this apparatus has also increased in a quadratic manner. And at the same time we see production falling into the negative. If you show it on a graph, then imagine - a curve goes up, which shows the growth in the number of management apparatus, officials as a bureaucratic class, and from top to bottom, from left to right, it crosses out - this is a fall in our production, a fall in gross product, and budget income. This is an exact repetition of 1989, this cross was crossed out then by the USSR. And now we see absolutely the same trends.
Those who profit from this collapse, from pieces of Russia, will then have the same pieces of power and property as during the collapse of the Soviet Union, they are now categorically not interested, so that this plan is obvious to someone. And Glazyev puts it on the table and, explaining it in scientific terms, says: “Look, people, they are dragging the country into a hole.” Well, how will they react? Naturally, spit on it.
Question: Is the liberal bloc simply afraid of these measures, afraid of a planned economy, a review of the results of privatization?
Sergei Andreev: In economics there is the concept of nationalization of strategic industries and enterprises - this is a mandatory condition for keeping our leading supporting industries, including the military, within some planned framework. This also includes and machine tool industry, and mechanical engineering, and aircraft manufacturing, and space, and life-sustaining industries, including housing and communal services. If we don’t do this and hand it over to the very comrades who rely on it, then we are finished. Nationalization, that is, return to the state management of strategic enterprises and industries is required. Here you don’t have to be either a communist or a liberal - you have to understand that this is how it’s supposed to be.
Enormous central planning is taking place in all countries. You cannot plan everything down to the last nail, this is obvious, but the basic parameters, based on the main state capacities, simply must be done. For example, you want to produce nails as a private individual. And they tell you that this much steel will be produced for these nails. You understand the scale to which you can expand your production. Therefore, the plan is the basis for the market, if you like, in order to understand how to ensure good, core business in other sectors. This is the second part of the question - what are they afraid of? They want to hand the country over to more powerful international structures that will simply eat us up, and that’s all. And they will participate in this process for their agency fees. The guys drag everything out of the country and understand what percentage their uncles will pay them. They are afraid that the country will become something sovereign and powerful, and they will not get anything.
Question: The Ministry of Finance, as if in response, proposed its own measures - to increase the retirement age to save state reserves. On the other hand, as an option, increase the national debt.
Sergey Andreev: Raising the retirement age, which, according to calculations, will give approximately 1 trillion rubles. Considering that we are now spending 3 trillion on officials, I would take 1 trillion from there and leave pensioners alone. This trillion exists, it just lies on the surface, it is called serving the needs of public administration. But this means they have to take it from themselves - it’s too much for them. And the second is an increase in public debt, but by what? If you just “bite through” it all, it’s stupid. This must be turned into investments, that is, this money must be used to production project, and production in such a situation dies due to high interest rates, due to the fact that they do not have enough working capital. So we need to change the conditions for production, and you don’t need any money - everything will start playing on its own.
Yes, and it is necessary not to reduce the number of officials, but to pay them 5% of the country’s income, and then let them do as they want. And 5% is a normal amount to maintain the management layer, but they now have 25%. And if so, it means there is somewhere to get it from if the state approaches this issue in a smart way. But for now the state is themselves.
Question: In the end, who is right? Sergei Glazyev or the liberal bloc?
Sergey Andreev: In this situation, Glazyev is definitely right, because he looks at our country from the point of view of the global economy and understands that it is “frozen” if everything continues like this. And everyone else looks at it from the side of their private interests and begins to think about “what would have happened if.” But the fact remains that, based on the concept that is in effect today, we entered a crisis for the second time in the last 10 years: in 2008–2009. and now we have stepped on the same rake. The robbery of the country again follows the same pattern - money is distributed to banks, rather than deposited to production diagram. Who benefits from this? To those who spit at Glazyev. And it's not about specific individuals, it's about the system. The system needs to be changed, and changed hard.
Economic growth in Russia is not a utopia. If we introduce the personal responsibility of government members for GDP growth, optimize interest rates of state banks, return to the “double budget,” create a common airspace with China... These and other proposals are contained in the “12 steps” strategy proposed by RAS academician Sergei Glazyev.
Russia risks sliding to the sidelines of technological progress and becoming a set of disparate enclaves on the periphery of the American or European economies, RAS academician Sergei Glazyev warned in the article “Seven Scenarios for Russia,” prepared at the request of Gazeta.Ru.
It is unacceptable to simply sit and wait for the sanctions to be lifted, which is, in fact, what the ruling class in Russia is doing now. Neither the next “action plan 2025” that the government is preparing, nor the “growth strategy” of business ombudsman Boris Titov are suitable as an effective tool. And the 2035 strategy, which former Finance Minister Alexei Kudrin is formulating for the Kremlin, is not yet ready.
According to Glazyev, the government and the Central Bank continue to follow the traditional recommendations of the IMF in macroeconomic policy, and Kudrin is building his program on this. Continuing this approach dooms the Russian economy to further degradation.
It is still possible to avoid a negative scenario. If the Kremlin implements an economic growth strategy based on Chinese governance experience. Academician Glazyev offers his own mechanism for a strategic breakthrough, consisting of 12 steps. Moreover, Glazyev makes these proposals not as an official, an adviser to the president, but as a scientist and expert in the field of public administration.
Government regulation and openness
The first thing that needs to be done is to transfer the functioning of the government to the technology of strategic and indicative planning.
Strategic planning indicates promising directions for economic development, based on long-term forecasts of scientific and technological progress and an understanding of the possibilities for rapid development of the country's economy within the framework of the world economy. Indicative planning provides guidelines for the activities of government bodies at all levels to create conditions for increasing investment activity in order to increase production and improve the standard of living of the population. It also provides entrepreneurs with the opportunity to take advantage of these conditions, explains Glazyev.
State regulation remains the same. “Government regulation stimulates business activity in the direction of production growth and restrains destructive manifestations (export of capital, financial pyramids, etc.),” notes Glazyev. But in the presence of state regulation, the Russian economy needs openness. “This makes it possible to import advanced technologies and export finished products, forcing entrepreneurs to increase the competitiveness of domestic products,” adds Glazyev.
Under personal responsibility
Indicative planning cannot be implemented without a mechanism for personal responsibility of officials. And also linking state banks to the tasks of lending for production growth.
This is the second and third point of Academician Glazyev’s strategy.
He believes that “it is necessary to introduce a mechanism for personal and collective (“cross-cutting”, “vertical” and “horizontal”) responsibility of civil servants, as well as a system of rewarding them for the implementation of indicative plans for the growth of investment and production.” These rules should also apply to the activities of state corporations and state banks.
State banks must organize their activities based on the task of lending for production growth and investment. Interest rates need to be adjusted “based on the profitability of the production sector.”
Catch up in Russian, overtake in Chinese
But the government's plan of strategies and indicators for its implementation are only half the battle. “A plan for advanced development based on a new technological structure will also be required. The further development of the world economy is associated with the formation of new world economic and technological structures, the model of which is the PRC. To achieve this, all the leading countries of the world are resorting to stimulating investment through targeted credit issues,” notes Glazyev.
The growth of the Russian economy is impossible without increasing “long-term credit resources and intensifying the role of the Central Bank as a lender of last resort.”
According to Glazyev, in contrast to the economies of the countries issuing reserve currencies, the main problems in the Russian economy are caused not by an excess of money supply and associated financial bubbles, but by the chronic under-monetization of the economy, which for a long time worked “for wear and tear” due to an acute lack of loans and investments .
At the same time, Glazyev refers to estimates from the Institute of National Economic Forecasting of the Russian Academy of Sciences. Achieving 4-5 percent annual GDP growth, above the world average, can only be achieved by increasing the savings rate to 27% of GDP by 2018. Only in this case is it possible to achieve the goal set by the President of the Russian Federation to achieve GDP growth above the world average. And in order to catch up with the growth rate of the Chinese economy, the savings rate (the share of investment in GDP) must be increased to 35%.
These proposals can be financed through targeted credit issues for priority investment projects.
“At the same time, the inflationary effect from increasing credit emissions in the amount of up to 5 trillion. rub. is not predicted, since the level of monetization of the Russian economy is 7-10 trillion rubles below the optimal level. The main condition here is the direction of credit emission exclusively for the purpose of increasing volumes and modernizing the production of products in demand,” Glazyev argues.
And he warns that in the conditions of structural imbalances characteristic of the Russian economy, a selective credit and investment policy will be required, differentiated by industries and areas of development in accordance with objectively established differences in their profitability. The existing practice of preferential lending to the agricultural sector and small businesses confirms the effectiveness of this approach.
Companies could enter into investment contracts with authorized government bodies, under which banks and development institutions could issue long-term loans.
At the same time, the Central Bank could function as a development institution, providing loans both to the needs of private enterprises in the expansion and development of production, and to government programs.
Under the sky of Eurasia
Part of the plan for accelerated development, Glazyev is sure, could be large-scale infrastructure development projects. Including, together with the PRC.
Infrastructure projects can be financed, in particular, not only from the state budget, but through the “issue of targeted low-interest bonds, quoted on the stock exchange and purchased by the Central Bank.”
To connect them with Chinese sources of financing, the mechanism of currency and credit swaps can be used. In order to attract funds from international development banks and financial markets, special long-term bonds may be issued that are traded on the financial market of the Eurasian Economic Union and the PRC.
The implementation of two transcontinental integration initiatives - the EAEU and the Silk Road - opens up opportunities for expanding mutually beneficial cooperation, Glazyev notes. For example, it is possible to combine the formation of a single airspace and the opening of new air corridors with the transition to jointly produced aircraft within the framework of Russian-Chinese-Indian-Iranian cooperation. Or the opening of inland waterways with the construction and use of ships of our own production. Or the construction of transcontinental transport corridors with the development of a unified base for railway and road engineering. A similar approach can be applied to the formation of a common energy space and a joint machine-building base.
“So far, Russian-Chinese investment projects are developing relatively sluggishly. The international development banks created for this purpose, primarily the Asian Infrastructure Investment Bank, remain on the sidelines. To intensify this work, it is necessary to use the forms of international consortia with supranational governing bodies and concession agreements,” says Glazyev.
Double budget
The next step is the transformation of the budget rule into a development budget, providing for the direction of oil revenues to finance public investment.
“Here it is appropriate to again turn to the Chinese experience. To combat the budget deficit and finance large infrastructure construction in China, since 1982, they began to use the so-called “double budget”: the regular state budget and the capital construction budget,” advises Glazyev.
The regular state budget is formed mainly from taxes, and the development budget is formed from non-tax revenues from enterprises, transfers from extra-budgetary funds with the addition of a positive balance of the state budget. The capital construction budget (or development budget) is intended for the purposes of economic construction, mainly for the construction of the most important facilities of national importance. The main goal of the “double budget” is to remove all capital construction costs from the regular state budget.
Glazyev recalls that after the 1998 default, budget division was used in the government of Yevgeny Primakov. Then the state began to formulate a development budget and establish mechanisms for refinancing commercial banks against bills of solvent production enterprises.
“Subsequently, this effective economic mechanism, which bore fruit, was replaced by the Stabilization Fund, which became a channel for pumping Russian budget revenues into American debt obligations,” Glazyev is indignant.
Another long-overdue tool for stimulating the economy is supplementing the functions of the Central Bank with the tasks of ensuring the growth of investment, GDP and employment. Increasing the role of special refinancing instruments of commercial banks for the purpose of lending to investment projects with an increase in the terms of the resources provided and an expansion of the pawnshop list.
To do this, it is necessary to bring the key rate closer to the level of average profitability in the manufacturing industry. Introduction of a vector of rates for special refinancing instruments, bringing the price of financial resources closer to the profitability of the relevant sectors of the economy.
It will also be necessary to take such a step as “organizing targeted refinancing of state development institutions and commercial banks under low-interest long-term state and municipal obligations, bonds of state corporations, including infrastructure bonds, as well as business plans of enterprises developed in order to implement government programs, orders, special investment contracts, export contracts, joint investment projects with partners in Eurasian integration.”
Against manipulation of the ruble exchange rate
And finally, several targeted but important implementations in the current government practice: “Introduction of a system of control over the targeted use of state bank loans and budget allocations, excluding their export abroad and use for speculative purposes.”
The introduction of selective currency and financial regulation based on indirect methods (Tobin tax, reserve requirements, etc.) in order to prevent speculative attacks, manipulation of markets and the ruble exchange rate, the construction of “financial pyramids” and other frauds that destabilize the economy.
It is necessary, Glazyev believes, to intensify the expansion of the use of the ruble as “a price currency and a currency of settlement for Russian exports, forming the basis for transforming the ruble into an international currency of settlement and pricing in a large Eurasian partnership.”
This requires stabilization of the ruble exchange rate in the medium term against a basket of Eurasian currencies.
“We need a transition to a development ideology with a priority increase in spending on R&D and education, stimulation of innovative activity and encouragement of innovation,” summarizes academician Glazyev and recalls the need for “personal responsibility in the system of government for achieving development goals.”