If It's - "Surmounting the Crisis", Then What Will Be Next?

HALF DEATH OF ECONOMY

Week of Russian Business (WRB) took place from 12 to 16 of April, 2010 in Moscow under the aegis of the Russian union of industrialists and businessmen RUIB).

It left burdensome impression. Surmounting the crisis has been officially announced, however economy of the Russian Federation stays in a clod. Nobody talks about any innovative development. We reap consequences at first of Yeltsin pogrom and then Putin laziness. Escalation of economic crisis into sociopolitical crisis is simply inevitable.

No-Go

As a matter of fact, WRB became "party-economic active" of the Post-Soviet Russian Federation. Some kind of instant picture of a present situation. Picture of stagnation, hanging became visible after a set of performances of oligarchs, businessmen and officials. We will try to write out high lights.

So, despite the course on innovative development declared already in 2007 (let's recollect Putin's last presidential speech in February, 2008 - "innovations or death") actually central power didn't defined with a question: what should be understood as innovations? How to give tax privileges to innovators, if it is not clear - what it is?

Even if the power will clarify the meaning of the term and will give out its unambiguous interpretation, who begins to define those companies which is possible to consider innovative? Tax service? Special commission? Ministry of Science? Some experts?

A lot was said about it in the first day. There are different ways of tax encouragement of innovative companies in developed and successfully developing countries. Up to seven - (Peoples Republics of China) and ten years' tax vacation (India). However, we don't consider here the fact that there are no such privileges in the Russian Federation. The root of all evil is covered in barbarous tax administration. Better to say - in corruption-ramping lawlessness of fiscal bodies. You could just recollect an example of Novolipetsky Metallurgical Industrial Complex where each tax check lasts sometimes for 10 months - and demands (example of 2006) 105 thousand certified copies of documents. Thus Federal Tax Service loses 70% of appeals in court.

So, there is barbarous tax system. On the other hand - accruing fiscal loading on real sector. Demographic catastrophe and "elite" larceny (which the power does not fight) leads to increase in social loading on labour compensation fund. In the future - up to 32%. After all it is necessary, keeping larceny of tops, to provide somehow the growing number of old men and unemployables in the Russian Federation. In fact it dooms economy to stagnation and leaving in a shade. Feel, what could happen?

Thus appeals to be engaged in innovations in primitive economy of the Russian Federation with its bear bureaucracy sound as mockery. There's no demand for innovations. To register innovative company is necessary to present to tax inspection the contract of rent of premise for a year. It means - if to take hundred-metre office - some tens thousand dollars. While innovators - are in general rather poor people.

In other words, gloomy and stagnant prospect depicts itself. The machinery of state reached in its larceny full marasmus. It's extremely difficult to work in these conditions: it is necessary to write the heap of papers and to try to knock down "bulldozes" of various bureaucrats.

Performance of representatives of Nizhny Novgorod was remarkable: the state works god knows how. The branch enterprises made a list of their requirements for import equipment for which customs privileges are necessary. They received 861 positions. Looked in the list of customs officers (federal one) - found only 9 positions. At that credits in banks are terribly expensive, everything - under pledge (at that one need 70% from its cost). Even personal property is being demanded now as a deposit. All the same - 20% per annum, whereas industry stagnates at the rate of 15%. If there's no pledge - percent goes up to 30%.

It's impossible to develop in such conditions.

Is There No Bank Crisis?

Stagnation is especially felt in bank sphere.

There was very interesting conversation between banker-oligarch Peter Aven, the vice-president of the Central Bank Gennady Melikjan, vice-president of RUIB Alexander Murychev and the chairman of committee of the Federation Council on financial markets Dmitry Ananjev.

All know that there very high rates in the Russian Federation - whereas they are close to zero in the USA and EU. Naturally, industry does not take credits. They are excessive. But, as it appears, industry doesn't need credits. Successful (export-raw) enterprises do without them - they issue bonds. Other enterprises don't want to take credits because they have no place to expand manufacture. There are no new commodity markets. Peter Aven adds: there are no "long-term money" in bank system of the Russian Federation. They used to take them from the West, now the source run low.

Crisis of the Russia model of "reforms" is on hand. Own people are poor, everything work on export of raw materials and low-tech-production from the Russian Federation. Whereas the demand there has fallen. To raise people incomes - impossible, it contradicts to canons of colonial neoliberalism Russian-like. Thus bank system is weak: there are no long-term actives. Means, it's impossible even theoretically to take loan for a long time and under low percent (for the sake of technical modernization). Well, what innovative development you are talking about then? Yes in general industrial life will glimmer hardly. It means guaranteed stagnation of the country.

Moreover, it is impossible to count on renewal of crediting of real sector. Ananjev declared that it's impossible to reduce discount rate of Central Bank. It was found out that banks cannot give credits under low interests for they have already involved means of investors under 15% per annum. Besides they have the heap of bad debts. They can't be returned.

From unofficial dialogue we knew: in last (pre-crisis) years owners of thousand factories and enterprises took credits in banks. They did not think about returning them back. Credits were taken for "kickback" to bank managers. Then the money was transferred abroad where effective proprietors moved themselves to. Now they enjoy life on Canary Islands. While banks received now (as pledge for non-return of loans) great quantity of dead enterprises. It's not clear what to do with them. Manufacture is dead. It was found out thus that equipment was put up in one bank, walls - in other, ground area under the factory - in the third. Sometimes one and the same property was put up in different banks. Clear business - total "dead end". It's clear that banks try to make up losses raising percent on credits today.

What is it? Prospect of dangerous economic depression.

G.Melikjan declared: present crisis - not economic. It is caused by incapacity of the state, inefficiency of state machinery, nasty judicial system, absence of protection of the property rights. And he is right. Crisis washed off foam of "oil boom" and showed that nothing was made either at Yeltsin, or at Putin. Corruption and state criminal runs the show. There's no saying about innovative growth.

Necessary Conclusions

Conclusions are elementary. Owing to all mentioned crisis (crisis of stagnation, rotting of the Russian Federation) will proceed. Now there is also a limit to existence of its economy: there was a lot of said during WRB about impoverishment of human capital, about shortage of prepared staff, about growth of a share of old men among population. It is 0 together with physical deterioration of technical sphere and accruing of noncompetitiveness of youth - it depicts ending of most Bialowieza's Russia-91. "Reforms" of 90s and the beginning of XXI century - not mythical Stalin superreprisals - became enormous meat grinder which processed Russian people. Now we will also face the result of monstrous falling of birth rate throughout fifteen years.

It means that sociopolitical shock is already inevitable. Improvement of economic situation will be illusory which will come across poverty of people and impossibility to lean against internal demand.

What could be the way out? My opinion: revolution with system change is necessary. With establishment of temporal dictatorship of development - new oprichnina which principles your obedient servant described not once or twice. With program of overcoming from system crisis in the Russian Federation. It is obvious that industries need new sources of demand. It means - increase of incomes of people and opening of absolutely new commodity markets.

That is, five-year plan (plans) with development of breaking-through technologies and projects which open new markets is necessary. Here you are future-polises (new urbanization, a house to each family) and new techniques capable to enter world market. For example, hybrid flying machines possessing the speed of the plane of 1940 and load-carrying capacity of a sea-craft. Or new medicine that really treats and not makes people invalids and makes the pockets of the patients empty. 

To create interconnection of such projects is necessary to have model of the Future, of a new epoch. Having a set of projects it is possible to plan investments and economic development.

We have such model. While present power doesn't have it. It's in general is incapable to project Tomorrow.

Vice-premier Sergey Ivanov on WRB said: to rescue the Russian Federation is necessary to apply that knowledge and technologies which are not present elsewhere in the world. He said right thing, however present "elite" cannot apply this principle. It doesn't have for it either mind, or boldness, or unselfishness, or necessary tools.

It means, ahead - resolute struggle. Russian Federation is close to its end. It's just the question of time. The second tsunami of global crisis - and it will come - will stroke across RF madly. Even Kudrin recognizes it. Transition of the West to the Sixth technological Level becomes not less terrible test for the Post-Soviet fragments. It becomes funeral of anti-Soviet experiment-91.

Well, for now economy of the Russian Federation - in a clod.

The more important is to make an attempt of national rescue. There's already nothing to lose. As they say, a man can die but once...

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