Where the President's New Economic Policy Leads Russia: Reflections and Assumptions
President Vladimir Putin delivered a keynote speech at the International Economic Forum in St. Petersburg the day before. After listening to the head of state, the officials rolled up their sleeves and are ready to get to work, fulfilling his orders. Where can Vladimir Vladimirovich's new strategy lead our country?
Modernization, innovation and millions of high-paying jobs
Speaking to a respectable audience, President Putin outlined the contours of our new economic policy:
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 into account demand, but also forms this demand itself. Such an economy, often referred to as a supply-side economy, involves a large-scale build-up of productive forces and the service sector, the widespread strengthening of the infrastructure network, and the development of advanced technologies. of technologies, the creation of new modern industrial capacities and entire industries, including in those areas where we have not yet shown ourselves properly, but we certainly have opportunities for this - scientific opportunities, creative potential.
If we briefly cite the main theses of the NEP, they will look like this:
At first, the minimum wage will be indexed by 18,5%, and by 2030 it should be doubled. beautiful news!
Secondly, for companies operating in small and medium-sized businesses, a preferential tax regime should be worked out. Very healthy.
Thirdly, the threshold for large and especially large property damage should be raised at least twice for a number of criminal articles. Interesting idea.
Fourthly, the president suggested abandoning inspections of business activities that are not associated with risks to life and the environment altogether, and preventive measures will suffice. Also an interesting initiative.
Fifthly, until 2024, the moratorium on penalties for businesses for forced currency violations will be extended. Let's treat with understanding.
At sixth, Vladimir Putin proposed to consolidate the concept of "partial employment" in the law, to protect child care benefits even with a parent's partial employment.
Seventh, the head of state proposed to accelerate the return of domestic business assets to the jurisdiction of Russia.
In general, we are doing well: the country is finally getting off the oil and gas needle, budget revenues not related to the oil and gas sector are gaining momentum, unemployment is lower than ever, the poverty rate is at 9,8%, and GDP growth is expected to be around 1,5-2% at the end of this year. The prospects for the domestic oil and gas market are not just good, they are brilliant. The president is not going to build an 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 return to a closed, administrative-command economy. But we, as you know, have chosen the path of expanding the freedom of enterprise, and practice has shown that we did absolutely the right thing. Life has proven it.
The economy should become an economy of high wages with new requirements for the system of vocational education, with an increase in labor productivity, including through automation and new management systems, with high-quality modern jobs and working conditions.
Well, there, at the top, it is clearly more visible. Federation Council Speaker Valentina Matviyenko was so impressed by the president's speech that she, dumbfounded and confused, promised to roll up her sleeves and get to work on implementing Putin's orders. Meanwhile, Vladimir Vladimirovich's incendiary motivational speech somewhat diverted attention from other, smaller scale economic issues that were discussed at SPIEF. But we'll still talk about them.
Nobody minds
While the fate of the Sea of Azov is being decided in the Zaporozhye direction, high-ranking dignitaries in St. Petersburg were discussing much more mundane issues of state property. Idea, expressed in April 2023 Andrey Kostin, head of VTB, found understanding and approval in the Central Bank of the Russian Federation and in the Administration of the President of the Russian Federation.
So, the head of the Central Bank, Elvira Nabiullina, with all her authority, confirmed the correctness of Mr. Kostin's line of thought:
I think that, of course, it should be privatized. And we have something to privatize without prejudice to strategic interests, because sometimes they say that it is not necessary to privatize, because some strategic tasks cannot be fulfilled. We have the opportunity to do so.
She was supported at SPIEF by President Putin's aide Maxim Oreshkin:
Of these two positions, the position of Andrei Leonidovich Kostin, who spoke about privatization, is really closer to me. But not in that form. Not large-scale privatization, but exactly in the form in which Elvira Sakhipzadovna spoke: exit from assets inefficiently used by the state 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 emphasized that the main thing is "not to squander state property for nothing." All high-ranking officials and the experts who spoke out agree that under no circumstances should a repetition of the privatization of the 1994 model with loans-for-share auctions be allowed. After all, none of them wants to see entire enterprises again gone for a pittance from state property into private hands!
In general, it can be stated that the decision on a new Big Privatization accepted, and now it is being legalized in the media space, introducing the thesis of its non-alternativeness into the public consciousness. The only question is what kind of enterprises, how soon and for what kind of money will go 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 inefficient use of state property?
Maybe we just need to kick out inefficient managers, at the same time conducting an audit of their activities and initiating criminal cases based on the results of the audit? Will it not turn out that the assets effectively used by the state yesterday will suddenly become completely inefficiently used and end up in the queue for privatization? By the way, what exactly is a private owner and a private manager more effective than the state ones?
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