Irina Samakhova. Skirmish at Belokurikha

Skirmish at Belokurikha
Irina Samakhova

Publication date: February 17, 2004

This economic forum, informally called “Altai Davos,” was held for the fourth time at the mountain resort of Belokurikha. The initiators - State Duma deputy Vladimir Ryzhkov and the German Naumann Foundation - manage to gather a very respectable company of expert economists, politicians and entrepreneurs in Altai every year in February. The conversation today was about the main thing - about opportunities, ways to achieve and limiters of economic growth in Russia. The political situation was not specifically discussed, but was the true nerve of the discussion.

Prominent St. Petersburg economist Sergei Vasiliev named among the diseases of the Russian economy the monstrous stratification in income levels between social groups, regions, and within regions - between the centers and the periphery. He considers this situation dangerous for the very existence of the state and calls for saving small towns by investing in local industry and the social sphere.

Presidential Adviser on Economic Affairs Andrei Illarionov , who objected to Vasiliev , on the contrary, calls inequality, “difference in potential,” the most important engine of the economy. He cited the United States as an example, where regions have no idea about subsidies from the center, but compete to create the best conditions for business development: whoever creates them, capital and labor resources flow to him, and he prospers. As for Russia as a whole, it is necessary to stop acting to the detriment of national interests, as was the case in the 90s, when, under external pressure, decisions were made that reduced the competitiveness of the economy. Thus, according to Illarionov, Russia should under no circumstances raise domestic energy prices to world levels and ratify an international agreement to limit carbon dioxide emissions into the atmosphere (the so-called Kyoto Protocol). And the presidential adviser considers the main condition for sustainable economic growth to be a reduction in government spending from the current almost 40 percent of GDP to 22 percent. For reasons that are not entirely clear, it was from this level of government spending that rapid economic growth began in more than 60 countries around the world. A recent example is neighboring Kazakhstan, where the economy, as a result of targeted liberal policies, grew by more than 11 percent last year. This was achieved by carrying out very stringent reforms in the social sphere - for example, in the housing sector of Kazakhstan, all benefits and subsidies were canceled overnight, and now the population fully pays the cost of the services of private companies that have taken over the housing and communal services sector. Just a couple of years ago, many Kazakh cities experienced enormous difficulties with light, heat and water supply; people were sometimes forced to cook food over fires and wash in ditches. Now, thanks to the efforts of entrepreneurs, all this is a thing of the past.

State Duma deputy Mikhail Zadornov, somewhat perplexedly, asked Illarionov to indicate which items of the Russian budget could be radically reduced in the near future in order to achieve the required level of government spending. Expenditures on health care, social security, and education are already meager. The sharp increase in defense spending still leaves it at a level that does not allow us to hope for rapid modernization of the Armed Forces.

Illarionov avoided a direct answer, saying that the decision here can only be political, reflecting some consensus in society. Whether it is possible will be determined by the elections on March 14.

State Duma deputy Vladimir Ryzhkov doubts that the presidential elections will lead to the desired agreement. They are being prepared in the context of growing anti-democratic tendencies and the curtailment of serious discussions in society. In conditions of false unanimity, reforms can be imposed on the country, but one cannot count on subsequent economic growth, because along with political freedoms, economic freedoms inevitably suffer. In Kazakhstan, according to Ryzhkov, economic growth under an authoritarian regime is ensured by foreign companies that have become the de facto owners of the country. And in Russia, the growing bureaucracy is strangling domestic business, but large foreign investments cannot be expected, because the West does not approve of violations of democratic norms, judicial arbitrariness and examples of free handling of other people's property.

, a well-known economist and managing director of the Troika Dialog investment company, showed what mutual distrust will lead to Evgeniy Gavrilenkov . He believes that the extremely low level of monetarization of the Russian economy does not allow us to hope for the development of mass long-term lending in the foreseeable future, no matter how much the authorities would like it. Foreign banks could support the development of mortgages, but in conditions of instability they will not come to Russia. Only a democratic way of governing society is considered stable in the civilized world.

The representative of the Naumann Foundation in Russia, Dr. Falk Bomsdorf, in his speech also expressed great doubts about the possibility of authoritarian modernization in Russia. For obvious historical reasons, the Germans are especially afraid of unanimous votes, especially under patriotic slogans.

In the business environment, politics is talked about in different ways. The owner of the Wimm-Bill-Dann company, David Yakoboshvili , said at the Altai forum that every businessman now feels like a fish on a hook that can be pulled out of the water at any moment. At the same time, he believes that one should do one thing - either business or politics. “But then you’ll have to come to terms with being on this hook forever ,” noted Boris Brusilovsky, chairman of the Novosibirsk Chamber of Commerce and Industry. He believes that entrepreneurs, who form the lion's share of budgets at all levels with their tax contributions, should more actively formulate their questions and demands for politicians.

Meanwhile, in Russia, where at the moment both liberal reforms and democracy are poor, there is noticeable economic growth - almost 8 percent per year. And this somehow quenches the thirst for change. Mr. Illarionov calls such sentiments Oblomovism.