The disappointing results of the SPIEF have been summed up: the population will pay for the economic achievements of the year

From June 14 to 17, the 26th St. Petersburg International Economic Forum (SPIEF-2023) was held. This year it was visited by 17 thousand representatives of 130 countries, including unfriendly ones. The United Arab Emirates became the guest country of SPIEF. More than 900 agreements were concluded for the amount of 3 trillion 860 billion rubles. All these digital achievements are quite impressive. But the main thing at any forum is still not the surroundings, but the content. Let’s dwell on some topics of the forum that seemed to us key.

Economy adjusted faster than expected

SPIEF summed up the results of the country’s economic life over the past year, when Russia faced unprecedented Western sanctions. But our economy, despite the numerous forecasts of skeptics, survived. From the high stands it was said: Europe is in recession, the inflation rate has reached 6.1%. In the Russian Federation, GDP growth is expected to be about 2%, and inflation is half as low – 2.9%.

Russian business is in solidarity with the state’s position on this matter. For example, the head of the country’s largest bank, German Gref, said that the country’s economy went through an “unprecedented difficult period” better than all expectations. In his opinion, there is not a single analyst who would correctly predict how the Russian economy will survive the “turning point”.

“Such results in a crisis situation were influenced by the professional work of the government and the Central Bank team, as well as the business itself — many companies were able to quickly reorient export flows and find solutions to reimburse suppliers who left the market, to buy companies leaving the Russian Federation,” the forum said.

The West wanted to strike at Russian exports, but it did not work out either, judging by the statements of the speakers. Moreover, Russia is going to conquer new export peaks, regardless of any sanctions. This was stated by Deputy Prime Minister Victoria Abramchenko during the SPIEF. “Our goal is to rise from 18th position in the world ranking of food exporting countries to the top ten in 2030, and we will work on this,” she said.

As Abramchenko said, Russia supplies food to 160 countries of the world, while Western markets closed to the Russian Federation did not bring down exports, but, on the contrary, increased it. “If we talk about the pre-sanction year 2013, then our export positions there were $16.5 billion. Last year it was $41.5 billion. We grew 2.5 times,” the Deputy Prime Minister stated.

And in the field of import substitution, according to the speakers, everything is fine with us. Repulsed from the sanctions downright with a bang. And Maxim Oreshkin, Assistant to the President for Economic Affairs, went even further and said that today it is not entirely correct to call the processes taking place in our economy import substitution, since qualitatively new products are being created. “What our country is doing now, our economy is doing, this is not import substitution. It’s just development, creating new products, moving forward. We do not have the task of replacing something, we have the task of creating our own, often at a new technological level,” he explained.

Privatization of the 21st century

Unexpectedly, one of the central topics of the forum was privatization. Who would have thought that an idea thrown a couple of months ago not even by a high government official, but by the head of one of the top Russian banks, would suddenly become almost the main one for discussion. Recall that in April 2023, Andrei Kostin said that Western sanctions had destroyed the “supporting elements” of the Russian economy that had developed over the past 30 years, and to create a new growth model, one of the sources of funds could be the money from restarting privatization. Then the presidential press secretary Dmitry Peskov said that the idea of ​​a new privatization was not being discussed in the Kremlin. However, in the summer Kostin’s idea seemed to have experienced a new birth. Literally all the leaders of the Russian financial and economic bloc who gathered at the SPIEF discussed the topic of privatization.

In particular, the head of the Central Bank, Elvira Nabiullina, several times during the forum stated the importance of privatization: “I believe that, of course, it should be privatized. We have something to privatize without prejudice to strategic interests.”

And Maxim Oreshkin explained how he supports this idea: “Of these two, the position of Andrei Kostin, who spoke about privatization, is really closer to me. But not large-scale privatization, but exactly in the form that Elvira Nabiullina spoke about: exit from assets inefficiently used by the state for the benefit and benefit of the state.” Economic Development Minister Maxim Reshetnikov noted the opportunity for investment in state assets that are inefficiently managed – this, in his opinion, can be helped by privatization. And according to German Gref, privatization contributes to maintaining the stability and competitiveness of the economy.

The head of the State Duma Committee on Budget and Taxes, Andrei Makarov, in turn, recalled that the head of the Investigative Committee, Alexander Bastrykin, thinks differently: Russia needs to be nationalized. “Who will you bet on? I would bet on the head of the Investigative Committee, because if not nationalization, then there will be confiscation, ”the deputy mocked.

Already in a different tone than in April, the press secretary of the president spoke on the topic. Dmitry Peskov believes that the privatization mechanism works well in most industries. He confirmed that many people in the economic bloc of the government support the idea of ​​privatization. “Such ideas are really constantly on the agenda. Then it’s a question of profitability,” he said.

Whether Russia is facing a new round of privatization is not yet clear, but judging by the signals sent by the forum participants, it will receive a “green light”, and something will still pass from state to private hands. This development of events should not be particularly surprising: we recall that the federal budget has a deficit of almost 3.5 trillion rubles, and the government needs to take money from somewhere to plug this hole. In the face of sanctions and the closure of many foreign markets, there are not so many options. Privatization is one of them, and perhaps the most real one.

Prices given by the brakes

But let’s get back to our achievements, which were discussed a lot at the forum. Inflation in Russia is lower than in many Western countries, close to the historical low of 2.9%. And unemployment has already reached this most historic low, dropping below 3.5%. The participants of the St. Petersburg forum did not miss the opportunity to praise the team work of the state and business in these areas.

Maxim Reshetnikov said that the current unemployment and inflation rates in Russia confirm the achievement of a balance in the economy. According to him, the normalization was facilitated by structural changes, which were achieved, among other things, through unprecedented state support measures. The economic growth rate in 2023 is likely to exceed the previous forecast of the Ministry of Economic Development of 1.2%.

As for inflation, it is about to turn into deflation. At least with regard to food – this was reported by Victoria Abramchenko. “We have very good forecasts, I hope that food will not add any unpleasant points to inflation,” the Deputy Prime Minister said at SPIEF.

According to the estimates of the Ministry of Economic Development, in May, prices in the food products segment decreased by 0.03% due to cheaper fruits and vegetables (-1.67%). At the same time, prices for other food products continued to rise, including sugar and meat.

Low inflation is, of course, good, but something else is more important: will it be able to keep up with such indicators, and if so, at the expense of what or whom? And here, in the statements of the speakers, sometimes disturbing notes broke through the dense wall of optimism. For example, Finance Minister Anton Siluanov noted that if the budget deficit is increased, this will lead to an increase in inflation, and the population and business will pay for such a decision. Another option is to increase taxes, but “they will pay for that too.”

Social is off the agenda

It is clear that business, especially large business, which is widely represented at the forum, has its own specific interests. A lot of correct and beautiful words were said at SPIEF regarding the prospects in the field of management and business development, digitalization and artificial intelligence, exports and logistics. But for most Russians, the most important economic issues are their standard of living and income. And ordinary people living in a very difficult economic reality were waiting for relevant statements from high rostrums: whether benefits and pensions for working people would be indexed, whether salaries for state employees would be raised, whether extraordinary payments would be made to those in particular need. They waited, but did not wait! In the speeches of ministers and heads of departments, nothing was said about this at all. True, President Putin did not pass over social problems in silence. The head of state recalled the minimum wage (minimum wage), the indexation of which will be indexed by 18% in 2024. However, this is not news – such a step was known back in February. Putin also proposed paying child benefits regardless of the growth in family income. This, of course, is good news, but obviously for a limited circle of Russian households. The president also said inspiring words about the “economy of high wages,” but it was more like a wish and a call, and not a real set of steps to increase people’s earnings. On this, in fact, all the measures of the state in relation to the support of its citizens were exhausted.

The rest of the agenda of the forum was very far from the life of the ordinary population. Of course, this state of affairs can be attributed to the specifics of the SPIEF, they say, the business agenda is being discussed here. But there is no doubt: if the authorities had at least some new measures to support the population in their stash, they would not fail to “pull them out of their sleeves”, regardless of any specifics.

And the fact that no such theses were voiced is an alarming signal. Obviously, in the face of a growing (well, or at least not decreasing) budget deficit, the government is clearly not up to generous steps towards the population – to plug the holes that have formed!

According to Maxim Oreshkin, the government should decide in the coming months which industries can develop without government assistance. And the Ministry of Finance and the Ministry of Economy should compile a list of inefficient and redundant items of expenditure that do not help transform the economy. But Dmitry Chernyshenko, Deputy Prime Minister of the Russian Federation, was especially imaginative and frank at the SPIEF business breakfast: “The little piglet is not enough for everyone. In the face of a budget deficit, many expenses will have to be abandoned, and even in the social sphere, I will not scare anyone and say what exactly. Efficient decision-making calibration will decide everything.”

Effective calibration – if someone does not understand, this means: which costs to cut first, and which – later. From all this, a disappointing conclusion follows: one should not count on state gifts to the population in the short term. It remains only to hope that they do not take away what is already there.