“Russia needs a mobilization economy with market tools”

The difference between a prophet and a forecaster is, first of all, that the former rather anticipates, while the latter evaluates in cold blood. In addition, forecasts tend not to come true, unlike prophecies, to which, in case of non-occurrence, the prefix “false-” is added. Minister for Integration and Macroeconomics of the EEC, former Advisor to the President of Russia, Doctor of Economics, Academician of the Russian Academy of Sciences Sergei Glazyev has repeatedly warned over the years about the events that have occurred in the Russian economy in recent months. He talked about the inevitable blocking of the reserves of the Central Bank and the government by the West, the complication of settlements in dollars and euros, the need to create barriers to the export of capital for the accumulation of investment resources, lowering rates, etc. It is difficult to deny that his predictions came true, although their implementation was catalyzed.

As you know, there is no prophet without honor, except in his own country. Glazyev, being an accurate forecaster, generally confirmed this cliché, since in official Russian expert circles he was often considered a person at least shocking – primarily for his often sharply negative position towards the economic policy of the Central Bank and the government. In the current environment, many of his past recommendations, such as the introduction of barriers to the export of capital, are already being implemented. Others, such as applying the experience of the Soviet planned economy, are gradually entering the toolkit of the authorities.

The fallacy of the floating rate policy cost Russia about 30 trillion rubles. from 2014 to 2021, estimates Glazyev. Despite the losses, Russia can still sharply increase the rate of economic growth and even become a global leader, he is sure. But even after changing management models from wrong to right, this will not be possible without fulfilling “one simple condition” – the introduction of a system of responsibility, Glazyev argues: “If one or another leader or management structure does not achieve its goals, then they are incompetent and must be replaced” .

– If we talk about the mobilization economy, then we traditionally understand this as the economy of the Stalinist type during the period of industrialization or the Great Patriotic War. While a mobilization economy with extensive market tools is quite possible. First of all, this is a system of measures that ensures the full binding of the resources available in the economy in the process of its expanded reproduction in order to achieve specific goals. That is what we should strive for. Terminology in this case does not matter much – you should not see negative connotations in the word “planning”. Offset contracts in general may be one of the tools for implementing such a policy, but they are unlikely to be enough to effectively restructure the entire economy.

This requires the creation of a strategic planning system with appropriate mechanisms of responsibility, the subordination of monetary and all other areas of economic policy to the goals of economic growth and the improvement of the welfare of the population.

This type of economy has operated and continues to operate in China. Macroeconomic policy should be based on the targeting of economic growth, for example, in terms of GDP growth. Or, if we proceed from the principles of the social state, the increase in consumption of the population with medium and low incomes. A number of others flow from this high-level target, most notably investment growth. A loan is created for the growth of investments – the main source of financing investments in the Chinese economy, especially in the first 10 years of its recovery, are targeted loans: for priority areas – at a rate of 0.2%, for the public sector – 2%, for private borrowers – 4%. Along with centralized credit mechanisms, there are regional ones focused on financing the investment plans of provinces and cities.