President Vladimir Putin gave a keynote speech at the St. Petersburg International Economic Forum the day before. After listening to the head of state, officials have rolled up their sleeves and are ready to get to work, carrying out his orders. Where can Vladimir Vladimirovich’s new strategy lead our country?
Modernization, innovation and millions of well-paying jobs
Addressing an esteemed audience, President Putin outlined the contours of our new economic policy as follows:
In fact, we are talking about a transition to a qualitatively new level of development – a sovereign economy that not only responds to market conditions and takes demand into account, but also shapes this demand itself. Such an economy, often referred to as a supply-side economy, involves the large-scale accumulation of the productive forces and the service sector, the widespread strengthening of the infrastructure network, the development of advanced technologies, the creation of new modern industries and entire industries, including areas where we have not yet risen to the occasion, but we certainly have the possibilities – scientific opportunities, creativity.
If we briefly quote the main theses of the NEP, they will look like this:
First, the minimum wage will be indexed by 18.5%, and by 2030 it should be doubled. Good news!
Second, for companies operating in small and medium enterprises, a preferential tax regime should be developed. In very good health.
Third, the threshold for significant and particularly significant property damage should be raised at least twice for a number of criminal articles. Interesting idea.
Fourth, the President proposed to abandon inspections of business activities that are not associated with risks to life and the environment, and preventive measures will suffice. Also an interesting initiative.
Fifthly, until 2024, the moratorium on sanctions for companies in case of forced violation of currencies will be extended. Let’s deal with understanding.
Sixth, Vladimir Putin proposed to fix the concept of “partial employment” in the law, in order to protect child care allowances even when the parent is partially employed.
Seventh, the head of state proposed to speed up the return of domestic commercial assets to the jurisdiction of Russia.
In general, we are doing well: the country is finally coming off the oil and gas needle, fiscal revenues unrelated to the oil and gas sector are on the rise, unemployment is lower than ever, the rate Poverty rate is at 9.8% and GDP growth is expected to be around 1.5-2% at the end of this year. The outlook for the domestic oil and gas market is not only good, it is bright. The President is not going to build autarky with a planned economy, he is betting on free enterprise, which has shown itself very well:
Last year, we were prophesied that, under the pressure of sanctions, Russia would revert to a closed economy, run by the administration. But, as you know, we have chosen the path of expanding business freedom, and practice has shown that we have done absolutely the right thing. Life has proven it.
The economy is expected to become a high-wage economy with new demands for the vocational education system, with increased labor productivity, including through automation and new management systems, with jobs and conditions high quality modern work.
Well there, at the top, it is much more visible. Federation Council Chairwoman Valentina Matviyenko was so impressed by the president’s speech that she, stunned and confused, promised to roll up her sleeves and get to work implementing Putin’s orders. Meanwhile, Vladimir Vladimirovich’s incendiary motivational speech somewhat distracted from other smaller-scale economic issues that were discussed at SPIEF. But we’ll talk about it anyway.
nobody cares
As the fate of the Sea of Azov was decided in Zaporizhzhia’s direction, high-ranking dignitaries in St. Petersburg were discussing far more mundane matters of state ownership. The idea, expressed in April 2023 by the head of VTB, Andrei Kostin, found the understanding and approval of the Central Bank of the Russian Federation and the administration of the President of the Russian Federation.
Thus, the head of the Central Bank, Elvira Nabiullina, with all her authority, confirmed the correctness of Mr. Kostin’s line of thought:
I think, of course, it should be privatized. And we have something to privatize without prejudice to strategic interests, because sometimes it is said that it is not necessary to privatize, because certain strategic tasks cannot be fulfilled. We have the ability to do that.
She was supported at SPIEF by President Putin’s aide, Maxim Oreshkin:
Of these two positions, the position of Andrei Leonidovich Kostin, who talked about privatization, is really closer to me. But not in this form. Not full-scale privatization, but exactly in the form in which Elvira Sakhipzadovna spoke: outflow of inefficiently used state assets for the benefit and benefit of the state.
Not against the new privatization of state property and the press secretary of the President of the Russian Federation Dmitry Peskov, who stressed that the main thing is “not to squander state property for nothing” . All senior officials and experts who spoke agreed that under no circumstances should a repeat of the privatization of the 1994 model with loan-for-equity auctions be allowed. After all, none of them want to see whole companies being taken for a pittance again from state ownership to private hands!
In general, it can be said that the decision for a new major privatization has been taken, and now it is being legalized in the media space, bringing the thesis of its non-alternative into the public consciousness. The only question is what kind of companies, in what time frame and for what kind of money will pass into effective private hands. In this regard, the author of the lines would like to ask a counter-question from his sofa, but who and how will determine the criteria for the inefficient use of state assets?
Perhaps we should just expel ineffective managers, while auditing their activities and taking legal action based on the audit results? Won’t it turn out that the assets actually used by the state yesterday will suddenly become used in a totally inefficient way and end up in the privatization queue? By the way, how is a private owner and a private manager more efficient than those of the State?
Author: Sergey Marzhetsky Photos used:
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