Evgeny Gontmakher: the current economic model will last another year or two, no more


Евгений Гонтмахер: нынешняя экономическая модель протянет ещё год-два, не больше

President Putin and Prime Minister Medvedev soothe us (and probably themselves) the positive dynamics of the national economy in the past year. In fact, we continue to lag behind developed and developing countries. And in the coming years, the government will not liberate entrepreneurship, the gap will not just chronic and hopeless character. Economist, member of the Kudrinsky of the Committee for civil initiatives Evgeny Gontmakher believes that the global technological revolution will force the ruling elite to undertake the modernization of the economy, and thus society and the state.

“Our economic model is completely outdated, not even the XX century”

— According to forecasts of the Organization for economic cooperation and development, in 2017-19 years the world economy will grow by 3,6-3,7%, Russian — 1.5-2%. We continue to lag. What, in your opinion, the main reasons for the lag?

— If to compare our country with the car, is the engine working, but by inertia, we still continue to roll. Two and a half percent is residual fuel, but the heart had already stopped. Our economic model is completely outdated. This model is not even the XX century: in the century, many countries, both European and Asian, developed very quickly. It is an archaic model when built vertical of power and there is no guarantee of private property. So where do we develop? Absolutely no where.

The success of the society is laid, perhaps, first of all in the family — the opportunity to give my child enough attention, to invest in its future education, knowledge and skills that are in demand in the future. In connection with this: what do you think of the recent Putin’s proposal to support families and the birth rate? Economist Andrei Movchan, for example, believes that “brood” mostly poor.

— I’m with Andrei Movchan disagree. He has a right to their point of view, but I believe that any money that goes into the social sphere, is a good thing. We have social projects and programs greatly underfunded, at 2-3. So it’s good that at least some families in the Russian Federation who live in poverty, get by local standards, decent money (about 10 thousand rubles per month). Especially since the first child is in a young family when the parents have not had time to progress in the labour market. As a rule, in this family a small salary.

Евгений Гонтмахер: нынешняя экономическая модель протянет ещё год-два, не больше“It’s hard to imagine that a young couple decides to have a child for 10 thousand rubles per month for one and a half years. It’s some kind of primitive view of human motivation”Komsomolskaya Pravda/Global Look Press

Another thing is that these situational measures is a pre-election move by Putin. In the same spirit as debt relief to individuals. It does not reform. We have what is called “family policy”, there is no systematic, routine. As, for example, in France, when decades increasing attractive conditions, benefits, payments. We have hot and cold. First, Putin put forward his demographic programme, introduced maternity capital and so on, and then it all subsided.

Now there are these measures, but what will happen, nobody knows. What happens after a child reaches one and a half years? (This is the term calculated initiative of Putin — ed.). All families will be able to support the child? Because it is a family whose per capita income lower than half a living wage. There will come a drop in income and born child will get worse. Therefore, we need not pre-election measures, and program management of the child through life until they reach 18 years of age.

Further, I am sure all these benefits will not increase fertility. Our demographers have long said that the birth rate can not be bought. It is an intimate process which is governed by sentiments, cultural norms, that is fine humanitarian sphere. In short, Putin’s proposal may be useful for the Russians, but this is no family policy.

One of the most acute problems for young people — the housing problem. According AHML, this year, mortgage rates reached the minimum of less than 10%, and the next will fall to 7% and then even lower. Whether for young families to enter into mortgage loans?

— It is good that rates are reduced. But we can hardly expect that it would cause an outburst that people will actively take these loans. If it was in 2000-ies, when were rapidly increasing income… Remember, then began in the country’s credit boom. As incomes grow, people had to make the first payment and then repay the loan. Now the trend is different. We have a fourth consecutive year of falling real incomes, wages remain small. And the typical young Russian of the family income is small. If they are growing from year to year, then the number of those wishing to enter into a contract of mortgage lending would rise. But now people are afraid of what will fit in the mortgage, and give her and not be able to lose the apartment.

Евгений Гонтмахер: нынешняя экономическая модель протянет ещё год-два, не больше“We have a fourth consecutive year of falling real incomes, salaries are still a little”Igor Grom/Sign.com

That is, in an abstract sense, a reduction in credit percent — correct measure, but it is divorced from macroeconomic reality. We see that the country’s growing debt. People already take out loans to cover other loans. Credit formed a vortex, which can suck a lot of citizens. What about the surge in mortgage lending can be said?

“The mantra is about business support is pronounced almost 30 years and nothing”

Poverty has truly become a plague on our society and economy. The country’s “humiliating” the number of poor — 20 million people, said Putin, and this is only the official data. Two-thirds of the citizens have reduced or expect layoffs, faced with a reduction in wages or expect that to happen soon. Almost half of the citizens evaluate their financial situation as difficult and very difficult, the vast majority do not believe in the best and preparing for the worse, people save on clothing, utility costs, even food and medicines. And of course — on education. That is, poverty hinders development. How to cope with the “curse of poverty” to create millions of decent-paying jobs?

The answer to this question is in response to your first question. Today’s economy, archaic, GOSUDARSTVENNAYA, programs the situation when the majority of enterprises are not competitive and most jobs in the country — very bad from the point of view of remuneration. Yes, in recent years there was increase of salaries in the public sector, but it is negligible. What kind of mortgage can be when the doctor is at a rate of 15 thousand rubles? This, of course, more than he was getting before, but still, we understand, is not enough for a normal life. In export-oriented industries (oil, gas, mineral fertilizer, metallurgy) salary is significantly higher. These wages can even afford to take out a mortgage. But this is clearly a minority of jobs.

The basis of all — the real sector, the production of mass goods. And here we have the horse is not lying. We must build a new economic model. What do you need? Freedom of enterprise, guarantee of private property, independent courts, lawful place of law enforcement in our lives — it is to ensure our safety, many policemen are engaged in the redistribution of businesses. Need a large package of political reforms. All of this should build new institutions — competition that supports economic diversity and competition legislation a fair trial, a variety that are not under state control media, fair elections and so on. As a result, a new model of the economy.

Евгений Гонтмахер: нынешняя экономическая модель протянет ещё год-два, не большеEugene Getmacaddress service forum FMG-2016

When the state withdraws from the economy, there will be conditions for the production of products that will be appreciated in the country and abroad, and people will start to get a decent wage. Here’s a way we need to go. This is much harder than to blame of entrepreneurs is that they don’t want to pay high salaries. And why suddenly? If many of them are teetering on the brink of bankruptcy.

But until we see, on the contrary, the decline in competition and “creeping” nationalization of the banking sector, at the same time — the unavailability of loans for business. Public procurement is virtually monopolized by cartels, and others, not “their” pester checks: according to the Ministry, organize each year 2 million checks. Number of bankruptcies in all sectors, except mining, the past year — a record since the previous crisis of 2010-ies. Facts about the oppression and the killing of entrepreneurship are countless. Do you think the next presidential term approaches of the state monopolies to entrepreneurship will change for the better? Urged Putin at the Congress of “United Russia” to improve the political system, fight corruption and assaults on businesses, to encourage competition, to develop the technology.

— How many there is a new Russia, that is since 1991, so many talking about supporting small and medium businesses, fighting corruption, development of political system. The mantra about business support pronounced nearly thirty years, but, as you can see, it means nothing. The President, Ministers, governors, deputies, all say: we need to develop a small business. What? You remember the famous phrase “stop scaring business”. But all that remained and the share of small business reduced. You are talking about bankruptcy, about the closure of businesses. In our economy continue to survive only large enterprises that have the administrative resource protection. Or enterprises set up by officials and written to their relatives and friends. While I have no reason to believe that sentences, for words become actions. Maybe something will happen after the elections?

— A specific proposal — to hold an Amnesty of business and citizens for tax debts. Volume up to 150 billion rubles. This measure is able to pull out of our business?

— The proposal itself is positive, but insufficient. It is not development. Imagine: a person is drowning, then POPs, gulps air and goes again to the bottom. Tax Amnesty — about the same.

— The prospect of gradual increase in retirement age citizens seem to have got used. And then, on your account, wait in terms of taxes — they increase the transfer of weight on the most affluent? For the level of social inequality, we reached the performance of Latin America and pre-revolutionary period a century ago.

— The inequality in our country again is directly related to the economic model that we live in: small salaries in most parts of the labour market. And we have long heard that we need to introduce progressive scale of personal income tax. Sooner or later we really will need to go on a progressive scale. But now — early. Because we have a million ways of tax evasion. We have no account of incomes greater than 30% of income is in the shade.

The attitude of the population towards the state is ambivalent. On the one hand, it breadwinner: give pensions, increase wages. On the other hand, people perceive it very negatively, because instinctively feel its inefficiency. Therefore, the typical behavior of the Russian person in respect of the state taxes to pay as little as possible, to evade taxation in the shade. The higher the taxes, the more the “shadow”. If people trusted the government, if saw that pay taxes not in vain… But we pay taxes and education, medicine, housing getting worse. “So why should I pay these taxes support the officials? The more that the money often steal” — says the Russian.

Евгений Гонтмахер: нынешняя экономическая модель протянет ещё год-два, не большеVyacheslav Krylov and Efim Repin/Motor.EN

So it’s not in strengthening the fiscal policies, not tax increases, and reform of the state itself. When the government starts dealing with the welfare of citizens, not merely their own interests, then maybe we can talk about raising taxes, and a progressive scale of taxation. Because people will understand why they pay taxes.

“Economic growth is minimal, to print money is not the answer”

Is vital to the success of the society in the future — the prestige of the teaching profession and quality education. No wonder at the same Congress of “United Russia” Putin has set the task to make our school the best education in the world, and to raise the University up to the highest standards. But throughout this year, we see the growing gap between teachers and students: adults insult children for their participation in opposition rallies, frightening showdowns in the FSB, ruined careers, challenges for parents. It is unlikely that in such a relationship, in the absence of mutual understanding and trust possible quality education.

— Schools develop a paradoxical situation when students, thanks to the Internet, know more than their teachers who teach according to the old textbooks. Unfortunately, the teaching corps is quite old, there is very little of the young. (According to the Minister of education Olga Vasilyeva, only 16% of teachers are able to use computer — ed.) In the end, the student in the best case just yawns and does his own thing, and at worst starts to show the teacher a higher level of knowledge and understanding of the issues. I know such cases, they are numerous when students say: “what do you say that to me, it is not so” — the beginning of the controversy during class. This is especially true of the Humanities — literature, history, social science. Stung by the teacher, using his administrative capacity, this can disciple and “flatten”.

Евгений Гонтмахер: нынешняя экономическая модель протянет ещё год-два, не больше“In schools develop a paradoxical situation when students, thanks to the Internet, know more than their teachers who teach on the old textbooks”Igor Grom/Sign.com

This, of course, the challenge for the educational system, so teachers need to learn constantly and quickly PEREPODGOTOVKI, take them out of the archaic system of mentoring, when the teacher is the master who comes and inspects all the severe eye, the pupils should remain silent and obey. No, today the teacher is a tutor, i.e. a mentor, older friend. This involves the pupils ‘ activity, their autonomy in the search of knowledge and discussion, not rote learning of textbooks. We have lots of talk about this, but few do.

As for the incident, when students are persecuted because they go to protests, it’s just a mess. Of course, the school can not engage in political activities I agree with this entirely. But if the children took part in a rally in the framework of the law, then there is nothing terrible and to pay attention to it is not worth it. The passport we get at 14 years old they are fully grown people, will understand where to go. In addition, today, in the information age, people Mature faster than in the years of his youth the very directrix that cause students and reading their sermons.

I think this reaction of teachers and Directors is dictated by the setting of Moscow. Surely there is instruction: dear teacher, be careful, there is a threat Navalny, the opposition, youth are recruited to organize the Maidan, and because of her need to be rescued from the hands of evildoers. I do not condone of Directors, but we have to understand that it’s dependent people, they have a contract with the local Department of education, they can be fired at any time.

What can you do in response? To send to the Kremlin reverse public signal. Stood up to someone at the last press conference, Putin said that the danger from the fact that young people interested in politics, no. Gentlemen master, you do training and socialization, but not politics. But when pressed you guys for participating in politics, then growing anger and exacerbated the generational gap. However, while we have this political economy model, when it is kept on the important bosses, nothing will change: you depend on the chief, he gave the order — you do.

— In the Federal budget a clear bias towards the defense industry, army, law enforcement, public administration. Spending on education, health care, physical culture and sport, on the contrary, are estimated in percent and is decreasing. Recently Valentina Matvienko gave an illustrative example: 3 thousands of schools are not connected to sewer and don’t have warm toilets. As for health care, more than half of citizens are dissatisfied with the quality of care — lack of staff, its qualification, rudeness, poor infrastructure, inaccessibility. The same, half of the citizens believe that the priorities of the Federal budget should be very different, social. Do you think the government will listen to the people? Or will remain at their priorities?

— You heard at the press conference, Putin anecdote about the clock and dagger. And all this is dished under the dressing of caring about people: while “enemies are everywhere” and we — “besieged fortress”, not to fat, it is necessary to tighten belts, “just war”; if we are in a situation almost of the cold war, if we threaten from everywhere, we have to increase military strength and security — because in the country there are various “foreign agents.” Because we have an archaic political and economic model, it does not increase GDP, and so on all is not enough, so in the budget deficit, the military needs are satisfied first, and everything else — by a residual principle. In this situation, the increase in spending on education and health is possible only under the condition that print money, thereby we will poshtem one of the few of our conquest — low inflation.

Евгений Гонтмахер: нынешняя экономическая модель протянет ещё год-два, не больше“If we are in a situation almost of the cold war, if we threaten from everywhere, we have to increase military strength and security — because in the country there are various “foreign agents,””Jaromir Novels/Sign.com

— Specifically the “may decrees”, which was supposed to enhance the prestige of the professions of teacher, doctor, scientist, social worker, — how well they are performed and to what effect?

— I was very surprised when the President said that “the may decrees” made by 93%. I think he meant only that part of the decree which refers to the increase in wages. Wages are almost brought to a parameters, which Putin outlined in 2012. And that is largely good reporting is due to different statistical tricks: come up with a clever method of calculating the average wage in the region, reduced employment in the public sector — remaining wages to be raised. Of course, this reduces the quality of services, but in the “may decrees” says nothing about raising them. In total, 93% is a meaningless figure. Apparently, Putin wrote that he was glad, but in fact it’s worse.

The “decrees of may” apply not only to salaries. In their package there is a decree that underlies all, but all about him forgotten. It is a decree that you need to almost 1.5 times to increase productivity, to create 25 million highly-productive jobs, and so on. No one mentions this decree, this silence. So what about the implementation of “may decrees” you can talk?

— It “may decrees”, the implementation of which is vested in the constituent entities of the Federation, led to the fact that regions have incurred in debts, some of them more than the annual income, and generally account for about a trillion rubles. Moscow has allocated assistance in the amount of 55 billion rubles, it is clear that this measure, too, is not a system, regions, and agglomerations need more tax powers, sources of growth. The same Matvienko announced that next year’s regional policy will be revised in favor of the territories, and Putin said at his annual press conference confirmed it. What effect do you expect from these changes?

— In terms of low economic activity regional budgets are not replenished. And requirements for increase of salaries in accordance with the “may decrees” is quite hard. As a result it was discontinued funding for many other articles that don’t need to report to the President. Thus, regional budgets were broken ridge, their structure is dramatically distorted. It is not surprising that we have schools where there are no normal toilets. Why? It is not necessary to report to the President.

Moreover, two regions, Karelia and Khakassia, has officially stated that they have no money to increase salaries. This will continue. The Federal budget, of course, can help them. But it is formed by taxes, and economic growth is minimal, to print money is not the answer. The situation is getting closer to its dead end, the result must occur to some interchange. Apparently, after the election of President Putin will announce the “may decrees” made and cancel them. But the main problem is that there is no economic growth, no growth, no money in the budgets.

“To enjoy a temporary increase in the cost of oil is erroneous and dangerous”

— What if the tightening of Western sanctions will force our “oligarchs” to return the capital to their homeland? Putin has announced Amnesty of fluent capitals, their income tax exemption, the issue for them government bonds. But, according to the United States, in offshore hidden more than a trillion dollars of our businessmen and officials, is 60% of Russia’s GDP. Is it possible to consider the capital as a real resource for the country’s modernization?

— For this you need to create the conditions. If someone where-that abroad are $ 100 million, of course, possible here to take this man to be “hostages”, something to arrest: do not return — you will be bad. But this is not the solution to the whole problem. We talked about trust. Potential investors should be assured that their money will be safe, that if they begin to invest in real economic projects, none of these projects did not encroach. And for this to be a fair trial. But, as we have seen, our court often works for someone else. Therefore most business do not believe that the money will return to Russia, will be safe. Trust is just not there, only through reforms that require, first, political will and, secondly, time. Need a specific, illustrative examples of which it will become clear that the government does not claim the money business. It’s a long process. (We add that, according to the Central Bank, in the past year the capital was moved, mainly from Russia, and not Vice versa: the net export of capital grew by nearly 3.5 times compared to the previous one and amounted to 28 billion dollars — ed.)

Евгений Гонтмахер: нынешняя экономическая модель протянет ещё год-два, не больше“The strategy of reform Kudrin about the pain points: the court and law enforcement system, and public administration, and human capital”, the Press service of the President of the Russian Federation

— According to Alexei Kudrin, to ensure the growth of Russian GDP up to 3-4% per year to global rates, you need to double the export volumes. What kind of export, besides raw materials, we can increase?

— Kudrin has in mind the increase in exports as a result of the reforms. In its reform strategy about the pain points: the court and law enforcement system, and public administration, and human capital. By the way, on taxes there’s nothing radical being proposed. And rightly so, because, as I have said before. If reforms in these basic areas somehow disappear: there will be freedom of enterprise will become a better investment climate, the export from Russia will increase.

Not necessarily commodities, not just oil and gas. We can integrate into the chain of added value. You know that [the plane] Boeing is going from hundreds of thousands of small parts that are produced around the world, including in Russia? This type of production in Russia can be dramatically expanded, and we still survived and the people, and the power — engineering, metallurgy, chemistry. We have a fairly strong IT industry. Create the conditions — and then there will be a mass of high productivity firms with competitive products.

— But in terms of digitalization and robotization of production, in terms of performance, we lag behind the advanced countries at times, our share in world production and export of high-tech products and knowledge-intensive services is a few percent or even fraction of a percent. “To create conditions” — but will it create? Do you think the Russian government will be forced to connect to the global technological revolution or can afford to stay outside, still maintaining the old production of low social cost?

— “Was oil at $ 50-a 63 — so slightly increase the revenue.” But this is only a temporary measure for the next year or two. The world as we know moving away from oil. Happen fundamental technological shifts in the automotive industry: a super-efficient engines, hybrids, electric cars, even cars running on hydrogen fuel. All this somehow reduces the dependence on gasoline. I’m sure it will take another 10 years and the car market has changed dramatically not in favor of the oil producers. In such circumstances, the sellers of oil will chase buyers and then the price of $ 63 per barrel will seem space. As we now seem space $ 143 a barrel, but less than 10 years. Not just Saudi Arabia adopted a program of transition to 2030 to an economy that does not depend on oil production. What can we say about the European economically developed countries. To enjoy a temporary increase in the cost of oil is an erroneous and dangerous approach.

— According to opinion polls, more than 60% of Russians against robotics, and among 18-34-year — olds- compared to 70%. At the same time, tellingly, 40% of Russians favor a “strong hand” in domestic policy, and I assume that the government needs to concentrate in one person, and the number of those who think so is growing. It turns out that the ruling party and “the masses” are equally conservative and do not want modernization. What kind of robotics, modernization, with such unanimity?

— Of course, the people in the mass conservative, they are afraid of all strangers, the same robotics, I am afraid that they will lose their jobs. And I’m afraid not only in Russia. Luddites do not purely Russian concept and not from our era (the Luddites — a movement of protest against the mechanization of production in England, early nineteenth century — ed.). Such an attitude always and everywhere, until there is technological progress. But many people are not satisfied and the current state of Affairs. And in polls people can answer what they want to hear. Some opinion polls are perceived as an appeal to them of power. And who is going to answer to the authorities the truth? Besides, it is necessary to look, as a formulated question.

In fact, we see that people, whenever possible, the last words of the abuse of local officials. They are not satisfied with the mess at the grassroots level. It is clear that it is a reflection of the classic Russian myth: a good king — bad boyars. But he points out that the citizens ‘ perception of reality, there is no consensus, there is no certainty that all goes well, that we grow and develop.

Евгений Гонтмахер: нынешняя экономическая модель протянет ещё год-два, не большеDaria Shelekhova/Sign.com

As for the fear of the future, then, firstly, I do not think that in Russia today is dominated by fear of losing their jobs due to automation. People are afraid of losing their jobs, rather, because of bankruptcies or due to the fact that are approaching retirement age. Secondly, the Russians are very quick to change your opinion, the question is, what picture to show them on TV (and some no longer believe the TV and get all the information on the Internet). So, we should explain to people, including issues of robotics. If you show the benefits of this process, the fears disappear. Like people new cars, new smartphones. All the products of a single process of technological modernization. Enjoy and robotics. Besides in Russia it is already underway. There are workshops, employing a few people, control the entire production system. And before that there were a few dozen people. For example, large areas of robots is in the automotive industry.

But the problem is not only that our people have very poor knowledge about the fourth industrial revolution, robotics. The upper classes, and they do not know what it is. Meanwhile, it’s not just robotics. The fact that the fourth industrial revolution is changing type of employment and type of life in General. In fact it is not even a technological and humanitarian revolution, a revolution of communication, when large enterprises as such disappear, and people work in small groups and are busy thinking, creative, invent.

The question arises: what to do with released? So all our interview I say: it is necessary to change a political-economic model. Then the question is what to do with the others, will not be so acute as it is in today’s archaic model. Instead of closing jobs will be new, requiring the person. Anyway the fourth industrial revolution will force us to change the economy. But I regret that in Russia there is no awareness of the danger that, if we don’t start to adapt to the new conditions, you can fly to the sidelines of history once and for all. Here’s what to say and not about what so-and-so percent of the population are afraid of automation and robotics. These processes are still going and will continue, it is inevitable.


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