Not the April theses of Academician Glazyev
Heroes and exploits
One of the authors knows Sergei Glazyev personally well. We met and communicated more than once. But at the same time, S. Glazyev constantly did not recognize his “bad” acquaintance. We'll forgive you, because by his character S. Glazyev is from that breed of charismatic leaders who are absolutely and, we admit, sometimes justifiably, confident in their absolute rightness.
They are ready to lead their flock in any direction, under any banners, and it doesn’t matter what. The main thing is to lead. I remember his work as Minister of Foreign Economic Relations in the Gaidar government and his deputy in the State Duma from the Communist Party of the Russian Federation.
He always builds his speeches and performances according to the principle “for everything good and against everything bad.” And here we completely agree with him. Who will object to something good? Here, for example, is his recent performance on the Tsargrad channel.
Rereading again
It is an avid read, it is written sharply and convincingly. And then, if you think a little, questions begin, what to do? Where are the suggestions of the harshest critic?
Since Sergei Glazyev was relieved of his duties as presidential adviser on the EAEU in 2019, many considered him a candidate for the post of chairman of the Central Bank of the Russian Federation. Under the current “iron lady,” the chair seemed to sway, and more than once, but, let’s agree, not much.
Many people cannot refuse the desire to become the chairman of the Central Bank of our country. Our hero too, and he launched an attack on E. Nabiullina more than once. The fact that our main banker knows how to devalue the ruble even when the Central Bank of the Russian Federation has a triple currency coverage of the entire ruble mass, we know perfectly well even without it, let’s remember at least the end of 2014.
But now Academician Glazyev cites two new negative circumstances: inflation and last year’s export of capital in the amount of $243 billion. And here we need to figure it out. Nabiullina, as the head of the Central Bank, is criticized by many and for many things, even to the point that she allegedly turned the Bank of Russia into a branch of the Federal Reserve System, which is actually hard to believe in the current conditions.
But all criticism has only an indirect relation to current inflation. Because the Bank of Russia, just as it did not give money to the economy during the 11 years of Elvira Sakhipzadovna’s reign, does not give it now. And all illiberal economists have long understood that our inflation is a consequence of global economic inflation, which was caused by the United States, pouring tens of trillions of dollars into world economic circulation.
In the EU, inflation is higher than ours. Even in tiny Mongolia, which is completely dependent on China, inflation there is 15%. We are withdrawing this accusation against Elvira Nabiullina by Sergei Glazyev.
What about the oligarchs?
Next we look at “capital flight”.
What's this? Are the oligarchs bad again? Or is this a normal economic process? In the 1990s and 2000s, and later, our oligarchs actually took approximately two trillion dollars in total out of the country. They bought a lot of things there, hoping that they would ride like cheese in butter in the West.
And then there are sanctions, and not only against Russia, but also individual ones. Americans find money from Russian oligarchs in any offshore. Switzerland and Cyprus are examples of this.
And what do you order? Where should the money go? And most importantly - why? After all, at home, in Russia, it is both safer and safer. Pay your taxes and sleep well.
Billions of Dreams
Since an economics academic doesn’t have time to simply figure out this figure of 243 billion, let’s try to do it ourselves.
So, the relocants of military age, to whom mom and dad send money, plus pacifist emigrants who scold Russia, but continue to feed from Russia (the castle in the village of Gryazi is being sold for a billion rubles) clearly made a significant contribution to Glazyev’s “capital flight.”
The average estimate of this contribution is $50 billion, there are no exact figures, plus or minus 10%. Guest workers, for whom there are no exact statistics at all, because they come and leave, and not empty-handed. But there are pre-Covid banking statistics for individual countries.
Tajikistan alone then accounted for 6–8 billion dollars a year. But now they are coming even from Vietnam and China. Whatever one may say, the figure of 50 billion pops up again.
Now tourists from nearby routes are Turkey, about five million people or 7-8 billion. We'll throw about the same amount at Egypt and the Emirates. But there are also the Maldives, Venezuela, Cuba, Thailand, and they haven’t stopped traveling to Europe (via Istanbul). Here, too, 30–40 billion is estimated.
There was once a smart deputy chairman of the Central Bank of the Russian Federation - Viktor Melnikov. He was involved in currency control and interacted with Rosfinmonitoring. He was a close associate of Sergei Ignatiev, with whom he led Russia through the global financial crisis of 2008–2010 without inflation or large devaluations.
Melnikov left the Central Bank shortly after E. Nabiullina arrived there. According to his estimates, at the end of the 2000s, sick and sick people treated in Western clinics, plus our students in Western universities, cost the country’s balance of payments $20–25 billion a year. Now, maybe less.
But in Israel there are clearly more of our patients, and a medical route to India has also appeared. It’s difficult to give an approximate figure, but these expenses clearly make a real contribution to the itemized breakdown of Glazyev’s “fugitive capital”.
Parallel Circuits
And now the last, and most important thing.
Parallel import and related schemes. And they are very different, sometimes white, sometimes gray, and sometimes dark gray. But most often they are associated with non-return of foreign currency earnings.
Instead, a product appears in the country that is included in customs statistics, but is not included in the statistics of foreign trade operations, because the money for this product did not go abroad through Russian banks.
Most often these are either currency exchange transactions (so-called transfer transactions). Or operations paid for from proceeds not imported into Russia, but here shown as paid for with money there, there and taken on credit.
It is quite difficult for journalists to compare customs statistics with central bank statistics. But Academician Glazyev, from the heights of his position, could well have addressed this issue before throwing stones at the Russian “iron lady”.
Even the head of the Central Bank is in no way able to influence the process of parallel imports. Is it possible to recreate the state’s currency monopoly, as it was before Gorbachev in the USSR.
Alternative? Net!
And lastly, let’s return to the question, what does Sergei Yuryevich Glazyev offer us as an alternative?
Perhaps he knows how to fight global economic inflation using the internal measures of one country?
Or maybe order the American Federal Reserve to stop printing dollars? Somehow we strongly doubt this.
Or does he have suggestions on how to fix our Russian balance of payments?
Well, let him write: all tourists are prohibited from leaving the country, bank transfers of guest workers to their homeland are prohibited, all Russians are prohibited from receiving treatment, studying and hiding from conscription abroad.
Let’s imagine for a moment that a person with such views will become the chairman of the Central Bank of the Russian Federation. Can you imagine what kind of trouble he will break?
And especially for those who want to study more deeply the economic views of Sergei Glazyev. Type in the search engine: “S. Glazyev, Mobilization economics. The Internet will fill you with a lot of interesting things.
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