The press published three scenarios for the development of the Russian economy prepared by the IMF experts. According to the first scenario, the price of oil will fall to 80 dollars per barrel, which will lead to a fall in GDP. The second scenario assumes the preservation of the current economic situation, which will provide Russia with a relatively low economic growth compared with the third possible scenario, in which growth is noticeably higher, but this will require investments in industry.
We turned to Mikhail Leontiev with a request to comment on this information.
The current conjuncture cannot be preserved: it is artificially maintained
I want to personally thank the IMF for the scenario, according to which Russia will invest in production and growth will begin. Even in the government program, which our prime minister opposed to the Davos scenarios, there were no ideas to invest in production.
We had fairly high rates of investment in fixed assets, but these investments are mostly inertial in nature, that is, they do not change the structure of the economy, and therefore our dependence on energy exports has only increased. Significant economic restructuring did not occur at all, and in some cases, domestic production was replaced by imports.
In order to reverse the deindustrialization, simply investing in production will fail. For this, we need models that are not covered by the methodology, ideology and practice of the IMF, that is, illiberal models of accelerated economic development are needed. This does not mean that they are anti-market.
It’s amazing why the IMF believes that the most likely model is to preserve the current market situation, in which Russia will ensure small growth and stability. No real processes in the economy give chances for such a development of events, that is, for the preservation of the current conjuncture. The current situation cannot be preserved: it is artificially maintained - due to the global deterioration of macroeconomic indicators, due to further disruption of macroeconomic equilibrium. At that moment, when the client can not keep balance, and it is all broken and broken, he just falls from the perch.
Russia has no existential obstacles to economic growth and development
In fact, there are two real models. The first model is an economic collapse, after which anything can come, including a very heavy, very expensive, very tough economic revival of Russia, or it may not. The second model is when Russia begins to purposefully engage in structural policy, begins to engage in re-industrialization and ensures its economic growth, economic success and economic attractiveness, including precisely because it happens against the background of a worsening conjuncture.
Russia has no existential obstacles to economic growth and development. We have no overconsumption, we have no macroeconomic imbalances, that is, inhuman debts; we have an absolutely disgusting structure of the economy in the presence of prerequisites to change this structure, but in the absence of the will and desire to do so on the part of the economic model that prevails here. The IMF advises us to invest in production. They advise everyone to invest in production, but behind this there is no state investment program, an active industrial policy. Behind this is the idea of improving conjuncture and investment attractiveness.
What is the investment attractiveness when investments under the current development model are in principle unattractive? Investments must have a return, but where will it come from within this model?
This model was built on artificially stimulating demand by issuing and, thus, pumping the main results of activity from those who create a product to those who print money. The main beneficiary is the one who prints money. All the others also exclude something from it. For example, Russia has received a lot from this: at the expense of expensive energy, it has increased the budget, improved welfare, repaired something, patched and darned.
"Russia has an absolutely disgusting economic structure"
- Mikhail Leontiev