Without a goal: why the program of the liberals and the Stolypin club will not work

Held in late may, the meeting of the Presidium of the Economic Council under the President with the discussion of the programs prepared by the Stolypin club, the Ministry of economic development and the group of Alexei Kudrin, leaves an ambivalent impression. On the one hand, well, that “highest level” with the personal participation of the President began to discuss alternative options for the economic strategy. In recent years, a number of key decisions were made without considering their economic consequences — it is sufficient to refer to the recognition of the first Deputy Minister of Finance Tatyana Nesterenko, “the Finance Ministry did not ask how much it will cost solution to the Crimea”. On the other hand, the set of ideas presented in the programs discussed, it brings to mind the statement by Winston Churchill about the generals who are always preparing for the last war — with the amendment that in this case we are talking about General economic policy.

In my opinion, a common problem for all three programs prepared in the fact that neither one of them do not clearly defined endpoint — in the format of “sustainable economic growth” and “improving living standards” and the format of the models of economy and society that we orientirueshsya. Before discussing tools, it is important to agree on what we are going to build in the end.

Liberal circle

In my understanding, Kudrin, and the Minister of economic development Alexei Ulyukayev, internally based on the fact that we are building an open liberal economy in which the main engine will be a private business, including foreign companies. And resources for investment, this business will attract, in particular, with the global financial markets. The obvious problem with this approach is that we are an economy already built, but to bring this process to its logical conclusion as it has not happened. And in General, it is clear why it happened — because of the low quality of institutions (especially state) and the continuing in force of this deep distrust of business and population policy. And if in this area will not be radical changes, it is not clear why suddenly the next attempt to build a “liberal market” will lead to the desired results.

But there is a more fundamental problem in the proposals coming from the liberal camp. It stems from the fact that after 2014 the world has changed. The annexation of Crimea and military conflict in the East of Ukraine radically affected the relations of Russia with developed countries, indicating a certain “point of no return”. And even if tomorrow the West suddenly cancels all formal sanctions (hard to believe), informal barriers to access for Russian companies to capital and technology will be left — just because Russia is perceived today by the West as potential enemy. And for many years to come.

The authors of the Stolypin club, seem to be aware of these challenges and rely on the model of “catching-up development”. Largely they focus on the experience of the countries of South-East Asia (South Korea, Taiwan, the China of today) — with the active role of the state in the economy, by stimulating investment through a credit issue, etc. But they do not take into account that for Southeast Asian countries was characterized by a high degree of closeness of the economy. More precisely, they are actively working on exports and through the success in foreign markets evaluate the activities of national companies. In this case they acted protective tariffs on imports, and the domestic financial market was just closed to foreigners. Also had serious limitations on the foreign exchange market that prevented domestic companies to freely buy and sell currency. Therefore, the implementation of the Stolypin club, in my opinion, is only possible with the introduction of very rigid exchange controls and the closure of the financial market for foreign players. But nothing like that in the program of the Stolypin club is not directly said. And I don’t think a successful medium-sized business, entering in “Business Russia” (which is largely behind the development of the Stolypin club), really wants for himself such restrictions.

“Corruption without theft”

As is the case with the proposals from the liberal camp, the program of the Stolypin club, there is a more fundamental problem. The historical experience of implementation of similar measures of active economic policy shows that they lead to success only if there is a certain “quality of bureaucracy”. Even the most successful Southeast Asian countries were not free from corruption — it is generally characteristic for countries oriented toward state capitalism. But the “rent extraction” officials in Korea or Taiwan did not take place in the format of “cutting the budget” (which is typical for Russia), but by “sharing the profits”. In this context you may recall the famous article Shleifer and cherry 1993, in which a distinction models “corruption with theft” and “corruption without theft” at the level of theory, it was shown that when all costs of corruption the second model deals significantly less damage to the economy and society.

We also still clearly dominated by the “corruption with theft” that development can not be combined. The Central question for the implementation of any economic strategy — “quality state,” the incentives that determine the actions of the state apparatus. However, none of the discussed programs, this question is not put clearly.

Why do we need Russia?

What are the alternatives to these programs? I have no answer to this question and the answer, in my opinion, can only arise from the public discussion, different ideas and different approaches with the participation of representatives of major “interest groups” which play a significant role in the economy and society.

For this discussion it is important that he had a “customer” so that its results were sought after by the government — and the signs that now appear. Equally important, were formulated the right questions to discuss. One of these issues is addressed primarily to experts from the liberal camp, in favor of openness: why Russia needs the world? Geopolitical tensions of recent years have clearly shown that we are dependent on the world market — but now no country in the world can not overcome this dependence. While all countries are in fierce competition not only for markets but also for cultural and political influence. In these circumstances, we must understand that we don’t owe anyone anything, but to love us no obligation. And if we want to, we are considered to be not only because of the availability of nuclear warheads, it is important to understand what we can offer to the world from which the world could not refuse. Only on that basis will make a transition from confrontation to dialogue and a return to the integration of Russia in the global value chain. The proponents are so popular today, the policy of import substitution should also consider the question of who and what we are really unable to catch up.

New elite

Developed in Russia since the beginning of 2000-ies the model of management of economy and society rested on the arrangements of three elite groups: Federal bureaucracy, business oligarchs and security forces. Until 2003, in between remained in relative balance. After the Yukos affair, the balance of forces has changed in favor of the Federal bureaucracy and a power elite, and after 2011-2012 — amid fears of a repeat in Russia of the scenarios of the “Arab spring” — the security forces became the dominant elite group. However, in the 2000s, the country emerged three influential social group — a successful medium business, regional bureaucracy and the elite of the budget sector. These groups were formed due to the growth of the domestic market and increase of budget expenditures, they are much more massive. In comparison with 1990, today they have something to lose, and at the same time representatives of these groups well understand how it is possible to work in the Russian reality. It is necessary to include representatives of these new groups in a dialogue about ways of development of the country.

One last note: all participants in this economic debate, it would be useful to go back a few steps back and try to negotiate for more common core questions — with the release of understanding what we’re trying to build. The experience of such discussions was at the site of the Center for strategic research, 1999-2000 — and, in my opinion, those discussions (and certain consensus that has prevailed in the course of their conduct) largely determined the progress in economic development in the early and mid-2000-ies. The CSR project is 2.0, which now runs under the leadership Kudrin, in my understanding, can be successful, if the area of the CSR will again be a base for discussing more General topics (about “model selection”) to take account of changed realities and with the involvement to this discussion of new categories of participants. If, after discussion, will be found new basic consensus, on this basis, it may be possible to formulate realistic ekonomicheskuyu program.

The authors ‘ point of view, articles which are published in the section “Opinions” may not coincide with ideas of editorial.