Staunton, May 19 – Despite all the talk in Moscow about a breakthrough and new confidence because of rising oil prices, the Russian economy has been falling ever further behind the advanced economies of the world and will continue to do so for the foreseeable future, according to Rosbalt commentator Sergey Shelin.
The ordinary Russian has to be suspicious about any talk of a breakthrough because the officials suggesting that is possible are the same ones who brought Russia to its current stagnation, a state that has left the country ever further behind the advanced economies and that these officials have no idea how to change (rosbalt.ru/blogs/2018/05/18/1704137.html).
One example of this inability surfaced this week when some in the government pushed for a sweeping counter-sanctions bill in the Duma and then Russian business leaders had to intervene against it, likely with the support of some others in the Presidential Administration but hardly an indication of a well-developed program.
The backing down in this case was justified in terms of maintaining Russia’s economic growth. “But just what growth” is anyone talking about. In the first quarter of 2018, the economy had grown only 1.3 percent over the same period a year ago. And “this is even worse than was the case in 2017” when the figure was 1.5 percent, Shelin says.
These figures are truly anemic compared to the worldwide tempo of economic growth over the same period of 3.5 percent. Only Japan and Italy did as poorly as Russia, and only Brazil among the major economies did worse, with an increase of only 0.7 percent. Now the economics ministry “which makes promises” is lowering the projected rate for this year.
And as always, it blames the past: “the not very good situation in the economy at the start of this year.” Ordinary Russians, polls show, have reached the same conclusion. After a brief uptick in optimism between October 2017 and March 2018, “the share of pessimists has again been increasing.” Also ever more pessimistic about Russia are Western financial institutions.
According to Shelin, “slow, even notable economic growth is completely compatible with the fundamental principles of Putinomics as long, of course, as this system does not begin to harm itself by the imposition of all kinds of counter-sanctions which will hit not only Voronezh but even the hierarchy itself.”
But the possibility of having a breakthrough that would allow Russia to catch up and surpass the Western economies is another matter altogether, the Moscow analyst says. Between 2015 and 2017, Russia’s GDP fell by 0.9 percent, while the world’s GDP rose by 10.2 percent. And even the top five economies, of which Russia is not one, did quite well.
Russia’s problems in this regard can’t be clamed on the Soviet past or on its involvement in Syria, Shelin says. In Kazakhstan, for example, GDP grew by 5.7 percent. Meanwhile, “Poland, the largest of our dependent east European states showed us an example: its GDP grew 10.7 percent.” Nonetheless, no one in Moscow is talking about copying Poland’s approach.
And other participants in the Syrian war, Shelin continues, did far better than Russia over the same period. Turkey’s GDP grew 15.1 percent, Iran’s 14.6 percent, Israel’s 10 percent, and Saudi Arabia’s 6 percent.
Thus, all talk about an economic “miracle” is misplaced. Russia has been growing more slowly than other countries similarly situated and will continue to do so. “This lag has deep roots,” the analyst says. “It is built into our entire system as are regularly repeated promises to carry out an economic miracle,” even though somehow that never happens.