The end of December is the dullest time of the year since people are publishing figures, lots of figures, mostly on the economy. And only seldom do you see trends behind figures.
But, in today’s Russia, we have both. And the most interesting thing is the debate about a long-awaited chance to change the very model of Russia’s economy, from commodities to technologies based. In fact, people are debating something that already is happening before our eyes.
Speaking about figures, the expected downturn of Russia’s GDP in 2022 has to be about 2.5 per cent. And that’s after an avalanche of predictions that, since the Western world has imposed sanctions against us, we had to lose at best 10-20 per cent of GNP, and, most probably, crush down completely.
But, still, some experts are unhappy. So what, they say, that suddenly Russia has produced, in 2022, a record 150 million tons of wheat, while its export has tripled, according to Antonio Guttierez, Secretary General of the UN. As a result, global food prices went down by 15%.
But the Russian Empire has traditionally been feeding the world with its bread, say the historians. Getting back to realities of 120-160 years ago is nice, but not nice enough.
And so what, that India has increased its purchases of Russian oil 36-fold since February, to 1.08 million barrels a day, overtaking China with its 830 thousand barrels. Yes, we are even discussing projects of Indo-Russian renting, producing and owning tankers, as in creating a whole new international industry. But, again, Russia as an exporter of oil or gaz is not news.
No, what we have now is a long-awaited transition from “export-import model of development”, says an economic guru Anton Sviridenko, the director of the Stolypin Economic Growth Institute in Moscow. It’s a transition to a different model, with minimum dependence on the Western economy, he adds.
Sviridenko is stating the obvious, namely, that after the end of the Soviet Union the nation has tried different models of dependence on global financial institutions, global corporations and global commodity importers. And, while the growth in around 2000-2010 was fast, due to the emergence of a large domestic consumer market, the next decade proved to be stagnant and uneasy.
The only real breakthrough happened after 2014 when the first round of anti-Russia sanctions came along. Moscow was clever enough to impose counter-sanctions on the West, mostly in agriculture. Cheap imports of EU-subsidized foodstuffs have stumbled, and in 4-5 years Russia has got itself a brand-new and powerful agricultural and food industry.
To quote my almost personal experience, my elder daughter was working, at the time, in a company exporting foodstuffs to China. And she was talking about a veritable boom, mostly in dairy products, but also in all kind of sweets and the rest. Simply speaking, the Chinese loved everything edible from Russia. They still do, as far as I know.
So, a little bit of protectionism can be fruitful, after all. What now? What kind of ideas are there to change the whole model of Russia’s economy?
The answer is almost universal: the West has launched an all-out war against us, using Ukraine as a stooge, and it’s exactly that war that leads us to a new kind of economy. That’s because war is always about technologies, that produce all kinds of spin-off effects.
Igor Karaulov is not an economic guru, he is, for God’s sake, a poet. Nevertheless, it was he who found the right words (that’s what poets do) about war as a locomotive for technological breakthroughs.
First of all, he invoked the ghost of FD Roosevelt, the US president who extracted his nation from the Great Depression of the 1930s. It was done thanks to an initial kick off massive military orders, flowing into the economy at the start of the Second World War. The spin-off was huge, beginning with workers getting salaries and forming a strong consumer market. And then, as the US experience showed us all, technological achievements cannot be only military.
If there are enough people with good brains, inventing all kinds of new things for the army, then they surely will invent a lot of other things, too. If a military corporation is being run like a business enterprise, then it will soon grow a lot of non-military branches, making new civilian things that will generate profits.
But did I say that Karaulov was a poet? His main idea is not about business, it’s about people. He says that investments in a military enterprise are, first and foremost, investments in brilliant brains and able hands. That’s uncounted thousands of experts in modern skills of all kinds, congregating around factories and laboratories all over the country.
Somebody working for a secret defence corporation was a very respected figure in the Soviet Union. There was that flavour of mystery around these people, doing something classified. And there was a certainty that they were drawing good salaries, and had a really good education. These were people with State awards and with surprising interest towards poetry, prose, music and whatnot.
That social group has been totally demoralized in the horrid 1990-s when the big idea was that the USSR had crumbled down under the weight of its military industry and that the world around a new and democratic Russia had to stay kind and benevolent. The heroes of the new world were supposed to be office managers, bankers and lawyers, belonging to a social group that became the breeding ground for a global community with universal values and without too many national traits. Now, that new world is not necessarily coming to an end, but it’s certainly losing a lot of its glamour.
There is no way back to the USSR with its militarization of the economy, said President Vladimir Putin yesterday. That means that there’ll be no separate Soviet-style military industry, eating up the government funds. But the way the people in our hi-tech industries are working now, with gusto and enthusiasm, tells us that the new economic model is almost there.
The author is a columnist for the Russian State agency website ria.ru, as well as for other publications. Views expressed are personal.
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