| In Soviet times, the minister of culture of one eastern republic said literally the following: “As the popular satirist of the 19th century Nikolai Vasilyevich Gogol said, “Vaska eats and listens.” The reason for which this phrase was said was happily forgotten, and the name of the minister was also forgotten. The phrase remains. Last week, the Minister of Culture of Russia said that we need to work “with our sleeves rolled up.” It is especially pleasant to hear such a turn of phrase from the mouth of the Minister of Culture - the phrase will remain.
“They’re tugging at their sleeves” in earnest—there’s already a breeze. Prime Minister Fradkov personally came to the nest of the Russian oligarchy - the headquarters of the Russian Union of Industrialists and Entrepreneurs - to urge big business for almost three hours to help the domestic economy.
The calls sounded especially touching against the backdrop of the World Bank report released the day before. It followed from the report that the very people who are being asked to help the economy are precisely the economy. They create jobs, they control major industrial and raw materials assets. And if the government wants to force tycoons to share, it is the government’s job to come up with the most reasonable and economically non-destructive ways to withdraw excess profits.
The Byzantine tradition of vying with each other to speak pleasant words to superiors and make correct reports “to the top” as the only content of the civil service is ineradicable in Russia. The Central Bank and the Ministry of Economy have been vying with each other all week to report a sharp reduction in quarterly inflation compared to the same period last year. By the end of the week, during the meeting of the president with the prime minister and the head of the Central Bank, a terrible thing was revealed: too sharp a decrease in inflation could have a detrimental effect on the main thing for which we will work, live, breathe in the next four years - doubling GDP.
In addition, the Central Bank strengthened the ruble by almost 5% in four months - exactly as much as it was going to strengthen during the entire 2004. This means that in order for the GDP, which we calculate in rubles, to grow, as the party (United Russia) and the government demand, the Central Bank needs to practically “freeze” the exchange rate at around 28.5 rubles. for a dollar.
“Rolling up its sleeves,” I would even say, “oversleeves,” the government worked hard all week in the accounting field. For once, the Cabinet of Ministers managed to agree on a package of tax laws, which provides for specific deadlines for completing tax reform in the country. In 2005 - 13 years after the start of the movement into the market - Russia should finally receive a somewhat coherent and relatively long-term tax system.
The Ministry of Finance behaved very cunningly in this situation, achieving the long-awaited right to be responsible not only for expenses, but also for income. Anticipating a reduction in treasury revenues after the reduction in the rate of the single social tax and experiencing uncertainty about the good collection of the mineral extraction tax, the Ministry of Finance proposed that the government borrow $3 billion on the foreign market using Eurobonds. Of course, the Ministry of Finance itself is going to determine the underwriters, coupon rates and loan placement terms.
They will most likely give money to Russia now, and at a decent interest rate. And Minister Kudrin will not only insure himself in case of holes in the treasury after tax innovations, but will also earn PR points in the battle for the strength of his positions in the government.
PR points are not the last thing in the current government. It is no coincidence that Minister of Economy German Gref, who recently publicly “teased” Deputy Prime Minister Alexander Zhukov, had to prove on Sunday on NTV that there is no split in the government, that Gref himself is not going to resign and that in general everyone in the cabinet is like-minded.
So everyone is rolling up their sleeves, doubling GDP by 2010 and halving the number of poor people in the country by 2007. It is important not to confuse the last two points, otherwise the number of poor people will double, and the GDP will halve. Semyon Novoprudsky
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