Tuesday, April 21, 2020

Moscow Doesn’t Understand Russia No Longer a Country of Big Businesses, Zubarevich Says

Paul Goble

            Staunton, April 19 – Moscow has no choice but to provide assistance to citizens, business and the regions, Natalya Zubarevich says. If it doesn’t, it will face “political risks that it hasn’t known since the 1990s.” But sadly, the government doesn’t understand that the country is not what it was, that smaller service industries are more important now than industrial giants.

            Thus, there is no guarantee it will direct such funding as it may be willing to provide in the correct way, the regional economist at Moscow State University says, and, by so doing, in fact make its economic and political problems worse not better (znak.com/2020-04-20/ekonomist_natalya_zubarevich_kak_rossiyskim_regionam_spravlyatsya_s_krizisom_iz_za_nefti_i_pandemii).

            Recognizing these changes is as important as recognizing that the economic situation in Russia is one that can be described as “a perfect storm.” It is not only about the pandemic and the resulting quarantine, but it also involves the decline in the price of oil and the fact that Russia has not yet escaped the crisis which began in December 2014.

            Unless Moscow gets this right, Zubarevich says, incomes will fall, unemployment will rise, and the ratings of those in power will decline.  Preventing that requires understanding that what will help giant businesses won’t help small ones and that it is the smaller ones and the impoverished regions that must be saved if the ratings of the regime are to be as well.

            The government says that it wants to help, and that is the first hurdle that had to be overcome, the regional economist says. But “the main challenge today is to take serious decisions rapidly, but the organization of decision making and execution is such that the authorities aren’t able to do that.

            Instead, they jump from one thing to another, often completely forgetting what they did the day before and trying something else. Sometimes this is justified as in the case of forgetting about the referendum on the constitutional amendments, but often it simply adds to confusion and decline.

            But there is another factor at work, a factor from below, that Moscow needs to take into consideration, Zubarevich says. In contrast to past crises, Russians are following what others are doing not only inside Russia but also abroad. The regions are watching not only what Sobyanin is doing in Moscow but what other countries are.

            And they are asking “why can’t the same thing be done here?” This is creating “very strong pressure ‘from below,’” and that is something the governmental bureaucracy and the powers need to learn to take into consideration if they are to save the economy and save their own ratings.

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