Staunton, May 28 -- For the last two weeks, the Russian powers that be have talked about the assistance they are providing one or anther category of Russians in the face of the pandemic, but the aid is unlikely to be as effective as in other countries because of specifically Russian problems, Vladislav Inozemtsev says.
For a long time, the Russian economist says, the state and the individual have been at odds with one another. As a result, “the rules which exist in society and business do not extend to the government.” Officials from bottom to top view the state as their personal property and view the people as supplicants who can be dismissed at will (snob.ru/entry/193412/).
One consequence of this very much on public view now is that the insufficient aid Putin says the government will provide is cut back further as it passes down through each layer of the bureaucracy with each taking a whack and the Russian people receiving even less that the Kremlin promises, a radically different pattern than in the West, Inozemtsev says.
“The size of the ‘ideological’ difference between Russia and the developed democratic countries is highlighted by ne simple fact: in the US, UK, France and Japan since 2000, there has not been a single government budget in surplus. In Germany, there were two, but in Russia, there were eight.”But the current Russian system suffers from other shortcomings as well. It focuses on old industries rather than new ones. It is more concerned with maintaining supply than stimulating demand. And its absence of clear legal rules means that it can’t act quickly and agilely because every move has to be renegotiated rather than taken according to law.
The Soviet system was obsessed with supply rather than demand, and the Putin regime continues that tradition. In the old economy which died in the 1970s, that might have been appropriate. Now, however, in the new economy, it is consumer demand which matters – and the Putin regime is ignoring that reality.
The clumsiness and slowness of the Russian government’s response means that the recession after the pandemic will be deeper and longer than in other countries. After the 2008-2009 crisis, the US moved quickly and recovered in a year or two. Russia didn’t and the recovery took far longer. There is no reason to think Moscow will react faster now, Inozemtsev says.
The pandemic will end, “but the economic problems which came to Russia not yesterday but more than a decade ago will remain for a long time to come.” And that highlights a real tragedy: As bad as the Putin regime’s response was t the pandemic, its response to the economic problems that will follow almost certainly will be worse.