Paul
Goble
Staunton, December 28 – Many including
some in the Kremlin believe that forcing oligarchs to repatriate the money they
have sheltered abroad will go a long way to solve Russia’s economic problems,
Yevgeny Gontmakher says; but they are wrong: far more will have to happen for
any money returned to make a major difference.
That is because unless the Russian
economy and the Russian polity are fundamentally changed, the economist
continues in an interview given to the Znak news agency, the money may come
back to Moscow but it won’t be used in ways that will prevent the Russian
economy from falling ever further behind those of other countries (znak.com/2017-12-26/evgeniy_gontmaher_nyneshnyaya_ekonomicheskaya_model_protyanet_eche_god_dva_ne_bolshe).
Despite what the Kremlin claims,
Gontmakher says, the Russian economy is lagging behind and will continue to do
so unless the Kremlin takes steps to free entrepreneurship by guaranteeing
private property now and end other archaic forms. Indeed, he argues, unless the regime does so,
Russia may soon find itself in a position where it can never catch up.
“Freedom
of entrepreneurship, protections for private property, independent courts, and strictly
legal arrangements for the law enforcement organs in our life” aren’t the
threats some see but rather the guarantees of economic growth in the new economy,
and consequently, Moscow must move in that direction on all fronts.
Nearly all problems from income
inequality to stagnating growth have their roots in the absence of these features
of rapidly growing economic system, Gontmakher continues. And unless things change, the economy won’t
grow and any new injection of funds will only lead to a growth in the “shadow”
sector of the economy.
The problem is wider than just the
business community, he argues. Ordinary Russians may support the state as their
economic provider; but “on the other hand, people view [the state as it
currently exists] very negatively becaue they instinctively feel its
ineffectualness.” That must change and
can only change if the state improves conditions across the board.
For example, Gontmakher says, the
hierarchical and authoritarian system in Russian schools now means that the
pupils who turn to the Internet know more than their teachers who overwhelmingly
do not even know how to go on line.
According to statistics, “only 16 percent of teachers know how to use
computers.”
The Kremlin won’t solve problems
like that by forcing oligarchs to return money now invested in the West. “Potential
investors must be certain that their money will be secure if they begin to
invest in real economic projects.” Otherwise the money will be wasted and held
only until it can go abroad again where that possibility is real.
The same thing can be said of
another Kremlin favorite “solution” – a rise in oil prices, Gontmakher says.
That will bring more money to Moscow but it won’t help the economy modernize
and grow by itself. Instead, it will only add to the shadow sector and thus
reinforce the current economic malaise.
Putin believes that he has the
support of the workers as far as reforms are concerned given that polls show
many employees oppose robotization as a threat to their positions. But that is
to misread why they feel what they do. Ludditism is a universal and not just a
Russian phenomenon, and what people really fear is losing their jobs.
Neither the population or the regime
understands that the fourth industrial revolution other countries are going
through will bring new but very different jobs and that both groups will
benefit if they seize the opportunity as other countries are doing. But that requires not just more money or a
technological revolution but a humanitarian one as well.
Over time, this revolution “will
force us to change the economy” as much as many oppose any change now.
Unfortuantely, “there is still no recognition in Russia that if we do not begin
to adapt to new conditions, they we may be thrown on the dust heap of history
once and for all.”
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