Critiques of Russia: from the Inside

by Amarynth

Presented here are a series of comments that critique Russia’s current policies.

The issue here is that these are internal comments, and not propaganda from external sources.  We should clearly keep in mind that Russia still has what is called 5^th and 6^th columns, and these are internal political factions.

If you take a listen to Radhika Desai after her very recent visit to Russia, you will find some of the same critiques in the sphere of economists.  But also remember, Radhika in the main is speaking with Russian communist party economists, and their vision of an economic path forward is a planned economy, based perhaps loosely on USSR methodologies.

We have a few old tsarists, as well, who also make their voices clear though they do not necessarily disclose what their bottom-line objective is.  It is simply to bring back a Tsarist Russia.  “Let’s be done with the Putin era… Bring Back the Tsar!”

On the face of it, Russia today is – or is striving for – a modern-day western style economy.  Nabiulina’s firm hand on the exchange rate is used as the main example of this.  A friend says, based on a discussion from myself:  “You’re right about the inability of Russian officials to understand rent, interest and financialized management. They’re Vol. I Marxists, not Vols. II and II dealing with these, because the USSR didn’t charge rents or interest.”  This brought my comment, which was related to business skillset in the main, squarely into the economics sphere.  My question was, where are the economists who are business developers, because I find a lack of business skill, which I ascribed to the civilization not learning it, as a result of the hard-planned economy of USSR times.

So, there you have the three main civilizational pushes and pulls in Russia.  At the previous SPIEF, Putin instructed Karaganov to bring the necessary nomenclature and descriptive concept for ‘the Russian Dream’.  I always tie this to the simple Chinese statement – they are socialist with Chinese characteristics, and we of course see the Chinese mixed economy that is state-planned, and yet we see a massive company like Huawei, which is structured as one huge cooperative from the lowest to the highest member of staff. Methods out emerging from of a true socialist base can thus be used – even in China’s mixed economy. Professor Karaganov was not very successful in his search for nomenclature, and that is not surprising, as Russia, economically speaking, is tending to be a fish on the shore and not in the water.

Then, there is the war (SMO)… and the Russian civilization has lost its patience and want this war to be done with.  There is an underlying anger that we can perceive clearly if we follow people like Medvedev and Karaganov.  In addition, there is the perception that Russia may be at war for many years into the future.  So Putin is taking a lot of flak these days.

Sberbank CEO German Gref addresses Russia’s economic problems at the SPIEF

Drivers of economic growth

Traditional or inertial drivers of Russia’s economic growth are nearing exhaustion, making a new growth model necessary: “Unemployment remains at historic lows, while capacity utilization is also high, and labor productivity has not yet grown at a pace that could offset these factors. Traditional or inertial drivers of economic growth are approaching exhaustion. The question now is what the future model of economic growth could be and what the government can and should do to implement it.”

The Russian economy will gradually transition to a new growth model: “I believe we will gradually move toward this new growth model. There will occasionally be setbacks. Technology and productivity improvement are now a mantra for any business, small or large. They also contain answers to how internal business must be transformed. These building blocks will provide new quality for a gradual transition.”

The economy continues to grow even under current challenging conditions, which can be called a miracle: “Regarding growth, we see that, thank God, it continues. In fact, it is already a miracle that under these conditions–with a strong Ruble and a high key interest rate–the economy continues to grow.”

Foundation of the economy

Small-business representatives are the foundation of the economy, creating its added value: “I believe this is one of the fundamental things that must seriously change in our country.”

The efficiency of this economy reflects the efficiency of the entire state: “I believe our approach to business, to the people who build the economic foundation through their work, is crucial. The smaller the enterprise, the more attention should be paid to protecting it from administrative barriers and supporting it.”

‘Four horsemen of the apocalypse’

The Russian economy faces a number of serious challenges, including a high key interest rate, rising tax burden, a strong Ruble, and administrative barriers: “We are indeed in a situation where people sometimes speak of the four ‘horsemen of the apocalypse’ in the economy. These are the high interest rate, the growing tax burden, the strong Ruble, and issues related to administrative barriers.”

Key interest rate and monetary policy

The decline in investment signals the need for monetary policy easing, though the situation is not critical: “We have seen four consecutive quarters of declining investment. This is one of the warning factors, which is clearly a significant signal that a shift toward easing [monetary policy] is necessary. But overall, the situation is not critical yet.”

A key interest rate of 10-12% serves as a “psychological threshold” for business to start the investment cycle: “We see emerging trends toward a loosening of the Central Bank’s policy, and we maintain our forecast of 12% for the rate through the end of the year. This, we believe, is the psychological point at which businesses can start attracting investment and initiate the investment cycle. The 10-12% range is the critical threshold separating us from the investment cycle.”

AI and technology

Russia has all the necessary intellectual resources to support its own technological developments: “The good news is that we have all the resources, primarily intellectual resources, to maintain our technical developments at the proper level.”

Russia ranks among the top five countries in artificial intelligence, and the gap with other nations is expected to shrink: “We are definitely among the top five countries in this field. We have our own national models and sufficiently advanced companies, people, and teams, all possessing the full range of competencies required to develop foundational AI models.”

To thicken this soup, we had an article from Scott Ritter describing the consistent external stress and pressure on Russia: (Yes, I know, but this was good work and I used part of it on a recent Venezuela article). I will leave you to read it here:  https://scottritter.substack.com/p/terror-and-mental-war

It seems then as if Russia, despite the welcome increased revenue from the oil trade, is on the cusp of a change.  This is not new.  I’ve been saying that for months, and it was not very hard to see.  One only has to follow the senior and trustworthy committed Russian Governance speakers.  The question remains whether this change is going to be economic or war?  I would choose that they become completely competent in the business field, and take the appropriate lessons from China, who has achieved this.

Remaining for this essay then are the clips and comments from a cross-section of Russian civilization prominent figures.

“As ground advances prove extremely difficult, Russia’s stated shift toward expanded and systematic air strikes is aimed at compelling Kiev to end the war on Moscow’s terms”, writes RIAC President Dmitriy Trenin.

“Given the current battlefield situation, a decisive victory is possible only through the use of weapons of mass destruction, which Russia should deploy without delay”, writes influential businessman, investor, and media entrepreneur Konstantin Malofeev.

“Russia has neither tactical nor technological solutions to achieve a breakthrough in Ukraine, making the initial goals of the SMO unattainable”, writes foreign policy analyst Vasily Kashin.

“Russia is no longer taken seriously by its adversaries after too many red lines were crossed without consequence”, says political scientist and retired intelligence colonel Andrey Bezrukov.

“We are approaching a dangerous threshold, and with the current elite, the chances of victory — or even of simply holding Russia together — are critically low,” warns philosopher Aleksandr Dugin.

Influential Russian public figure Ekaterina Mizulina, wife of pop star Yaroslav Dronov (Shaman), condemns the Tate brothers’ invitation to Russia as “absurd,” citing their dubious reputation and the pending criminal investigations in the US, UK, and Romania.

“Russia is on a losing trajectory”, says senior Russian lawmaker Valery Gartung, citing economic stagnation and a technological disadvantage on the battlefield.

Bloomberg: “Senior Finance Ministry and Central Bank officials have privately warned Putin that Russia’s war economy is unsustainable.”

“Russia’s standing as a great power hinges on achieving victory in Ukraine”, Lavrov tells gathering of foreign policy and security experts, some of whom are growing pessimistic about Moscow’s ability to win on the battlefield.

“The EU and NATO are rapidly preparing for a large-scale war with Russia”, says Putin’s foreign intelligence chief Sergey Naryshkin.

President Vladimir Putin’s speech at the SPIEF on Friday morning

Now after reading that list of comments, I would invite you to go and listen to President Vladimir Putin’s speech this morning at the SPIEF – specifically the last 15 minutes. He already commented on war issues when he spoke to the heads of the world’s leading news agencies. Now take a look at the economic problems highlighted in this list. And then, tell me what he is leaving unattended. I do not find one unattended issue.

Russia is still one of the coolest countries out there.