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Siluanov against Kudrin: Who will let Russia to the bottom

Силуанов против Кудрина: Кто быстрее пустит Россию на дно

In the financial block of the government of the Russian Federation has designated a small split. Views diverged first Vice-Premier, Finance Minister Anton Siluanov and audit chamber Chairman Alexei Kudrin. The dispute came because the assessment of economic growth. Speaking at a financial forum in Moscow, Siluanov predicted growth of the Russian economy in 2020 at the level of 2%. This target and the Department did not change, stressed the first Vice Premier. In his opinion, the stimulus to growth will have the unfolding of the mechanisms to the goals of the national projects and the national welfare Fund (NWF).

For their part, present at the event, Kudrin called for 1.3% growth next year “ceiling”. He noted that incorporated in the national projects funds are insufficient to propel the economy to the target of 3%.

But at a key point between teacher and student and Kudrin, Siluanov — no differences: money from energy export needs to be put in a jug rather than invest in the Russian economy.

So, Siluanov said that the Finance Ministry is under pressure because of rising surplus and national welfare Fund. The Agency criticized: “What are you sitting on money and not spend?”

But, once again explained the first Vice Premier, that potbelly is the right strategy in anticipation of the crisis.

“In time, all will quickly leave if the situation deteriorates in energy prices. As it can be. How to develop the theme with OPEC? With oil shale extraction? And that we need to back off, to raise taxes?” — said Siluanov.

Your view of the situation was voiced at the Moscow forum, and Moscow mayor Sergei Sobyanin has called for a review of existing approaches to evaluating economic growth.

“Our economy is not pipes, not oil and gas, and some abstractions, and the economy of man. The modern economy — the economy of man, we must measure through man. I think that it is necessary to revise the approaches in General to what is happening,” he said.

The main criterion Sobyanin called human capital. Also, he said, “any crisis is the inner content of man.” “People either believe in the country’s development and economy, or does not believe. If you do not believe — then it is a crisis. If you believe — then there is no crisis. The crisis heads” — philosophically concluded Sobyanin.

Damn hard to argue that the most important thing in the modern economy is human capital. And that only by its augmentation can to pull Russia out of this swamp. But such a path involves a radical restructuring of social policy — the opposite of what is de facto and Sobyanin and United Russia, and key government Ministers.

That is why education and health care, our country spent a pittance to 4.7% and 3.7% of all budget expenditures, respectively. But rising provisions for the maintenance of security forces under article “national security and law enforcement”, and the costs of the 5 million government officials, whose number has already exceeded the scale of the Soviet Union. Plus growing expenditure on propaganda — in the summer it became known that “the First channel” to get an additional 3,413 billion rubles from the budget — brainwashing of the population.

In fact, the Kremlin missed the chance to develop the economy in the “fat zero” when the budget swelled from oil and gas revenues. And now — later. Therefore Siluanov as many may argue with Kudrin on fractions of a percent in the projections, and the mayor — to talk about human capital: under the current system of government it will not change anything.

Meanwhile, clouds are gathering on the horizon. Leading analysts are unanimous that ahead the world is waiting for the most severe global crisis. And if not to accept emergency measures, Russia will come out of it very worse for wear.

— Disputes about the pace of growth in Russia will soon end themselves — the deterioration in the global economy will become so obvious that will not to dispute — the President of the Union of entrepreneurs and tenants of Russia Andrei Bunich. — At the time of a major disaster, the whole situation will change, and this moment is not far off. Another thing is, at the current rate — without a fundamental change in the structure of the economy, particularly the financial system, Kudrin is right: more than 1% growth of the Russian economy do not squeeze.

Thus, today our economy is still in a good position. On the global energy market, a favourable situation, Russia does not limited to export, plus in the country’s booming consumer credit — people have to live in debt.

But no growth reserves in the current version is not visible. Kudrin is right in saying that national projects will not have any practical influence on the acceleration of the economy.

Even the most desperate optimists believe: when full execution of the national projects of Russia’s GDP will add only 0.5%. National projects came from Federal programs, and the de facto financed on the money of the budget. No new money in the projects there, and it would be strange to hope that the renaming of target programs in the national projects will appear economic growth.

“SP”: — the mayor believes that the rate should be on human capital…

— It is banal: of course, human capital is important. But more importantly, to answer the questions: in what ways will happen the appearance of this capital, its development, and most importantly — its transformation into economic projects in the business? What you need for this kind of social and economic infrastructure, what should be the incentive system, what investment opportunities should open?

Just to say that we need to invest in human capital means a simple reallocation between budget lines: a little more to invest in education and health. The only problem is that at the current rate it does not matter: much more on education and health is not to spend, and what you will spend, you still take away the “national economy”, already curtailed to the utmost.

The trouble is that the current leaders do not clearly understand, something to strive for, where to go. They support the mythical stability, but only in the short term.

“SP”: — what about the NWF — “potbelly” for the filling of which advocating and Kudrin, and Silvanus? We can survive in a crisis on the reserves?

— These reserves are not so great. Earlier, before the events in Crimea, Russia in the world lend much more, now lend only to the extent of our reserves — and no more.

This means that the current reserves will somehow be spent on the repayment of foreign debts. So count on this money is not necessary.

In addition, in the short term, our banks will have to gradually stop giving out loans to individuals — it becomes unsafe. And it will also slow down economic growth.

“SP”: — When the situation in the global economy will play against us?

— In 2020 there will be significant changes in the energy market: the USA will complete the necessary infrastructure, and will have the opportunity to dramatically increase oil exports. This will lead to oversupply in the market, and energy prices will fall.

In addition, the world economy is to grow in a recession. It is de facto already begun in Europe, in the same way the US and China, where the economy is slowing. As a result, the world economy will go to negative rates of growth.

In such circumstances, in order to support oil prices, the United States can begin to oust Russia from the energy market — as has already supplanted it with Venezuela and Iran.

Most likely, a combination of these adverse factors, we will see soon.

“SP”: — in this case will make our government?

— The Cabinet has no understanding of what to do, even in good conditions. About what to do in poor conditions, members of the government generally prefer not to think. In my opinion, they live by the principle of the heroine of “Gone with the wind” Scarlett O’hara: “I’m not going to think about it (or about that) now it’s too unpleasant. I’ll think about it tomorrow.”

— My point initially closer to Kudrinskaya, but I seriously disagree with him, and with Siluanov, the leading expert of the Center for political technology Nikita Maslennikov. It’s theoretically possible, of course, that growth in Russia this year was about 2% of GDP. It is possible to repeat the scenario 2018 — actively to Fund the state ordering, and expanded the defense order. But this statistical increase is extremely unstable. Effect work exactly the same as last year: year-end growth of 2.3% in the first quarter of next year — GDP in the negative zone.

But, perhaps this goes. In the first eight months of 2019, the cash execution of budget expenditures amounted to slightly more than 42%. According to Prime Minister Dmitry Medvedev, the remaining 58% of the costs should flow into the economy in the last four months of the current year. In professional language this is called the budget issue, which of course leads to an acceleration of inflation.

In the end, in the first quarter of 2020 we are likely to repeat the eternal history of the Russian economy — will further restrict its growth potential.

© 2019, paradox. All rights reserved.

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