2024-07-28 16:09:30
Even outside of Moscow, for example, in the Krasnodar Territory, 428 new catering companies appeared this year.
Western sanctions against Russia are not working as intended. What’s more, some specialists even say that they benefited the Kremlin. “Compared to the spring of 2022, when most experts, including myself, were convinced that the Russian economy would not survive half a year, today we see that it not only survived, but continues to grow,” says economist Vladislav Inozemtsev.
There are more numbers that surprise specialists. For example, investment dynamics.
What is behind such statistics? What keeps the Russian economy alive and how long can it last?
Journalist Mumin Shakirov talked about this with restaurant owner Boris Zarkov, professor of the Department of Economic and Social Geography of Russia Natalia Zubarevich, economist V. Inozemtsev, economist Sergey Guriyev, his colleague Igor Lipsits, senior partner of “Movchan’s Group”, financier Andrei Movchan living in the United Kingdom. The interview was published on “svoboda.org”.
As already mentioned, Russians are more generous to public catering establishments this year, and the number and turnover of the restaurants themselves also increased.
However, there is also a negative side that businesses have to face – the sudden outflow of migrant workers from Russia.
“In the Krasnodar region, they are conditionally now completely banned. The problem is that there is a constant lack of staff and turnover. People are rehired, wages are constantly rising. And this affects the quality of services,” said restaurant owner B. Zarkov.
However, as travel abroad became more expensive, domestic tourism began to develop in Russia. “I see organic growth,” said the restaurateur. “Besides, demand increases competition, so many interesting projects open up.”
There are no obstacles for food products either. in 2014 in response to Western sanctions, the Kremlin announced a ban on the import of European food products. Since then, restaurants have relied on local meat and dairy products and seafood.
“One thing is clear: people have money to go to bars, cafes and restaurants, at least in cities and towns,” concluded M. Šakirov.
N. Zubarevich, professor of the Department of Economic and Social Geography of Russia, calculated: excluding inflation, wages in rubles increased by more than 14 percent. And in January-April. it grew by 19 percent. “The wage race is accelerating,” the professor assessed.
“Compared to the spring of 2022, when most experts, including myself, were convinced that the Russian economy would not survive half a year, today we see that it not only survived, but continues to grow. Formally, the gross domestic product (GDP) is rising, the incomes of citizens are also increasing, but no development in the Russian economy is currently present or foreseen,” commented economist V. Inozemtsev.
Almost every expert who observes the situation in Russia mentions that the country’s economy is growing because of military orders. Russian President Vladimir Putin constantly boasts that the country’s economy has outgrown all of Europe in terms of growth: in 2023 GDP rose by 3.5 percent. But does it improve the quality of life for Russians?
Economist S. Guryev pointed out that over the past few years, production has grown exclusively in the Russian military industry.
“The fact that we produced a tank does not necessarily mean an improvement in the quality of life of Russian citizens. The tank manufacturers received money from the Russian budget, but in a sense this is equivalent to the money being printed and distributed to the tank manufacturers. So we should not be surprised that the economy is overheated, unemployment is low, and inflation is high,” said S. Gurijev.
A number that shocked
Fourteen Western sanctions packages, labor shortages, difficulties in settling with banks even when trading with partners like China and India… But nothing can reverse domestic investment.
N. Zubarevich, professor of the Department of Economic and Social Geography of Russia, is surprised by the dynamics of investments, which the interviewer calls incredible: “Last year it was less than 10 percent, and in the first quarter of this year – 14 percent. growth <...> I would really like to see the half year results. For now, I am afraid to comment because it is a number that has shocked me.”
However, the government’s decision to increase taxes could spoil things. Recently, V.Putin signed a law, by which from 20 to 25 percent increased income and profit taxes. It is clear that there is not enough money for the war, so unpopular tax measures must be taken. According to economist I. Lipsic, this is primarily a blow to small and medium-sized businesses.
The economist predicted that they would retire, so fewer workers would be needed. “People will go to work in military factories if they don’t accept them, or they will go to the army as mercenaries,” commented I. Lipsic.
No one ever said what they expected
Fourteen sanctions packages do not appear to have produced the expected benefits.
Financier A. Movčanas is not surprised by this. According to him, no one has ever said how to measure the effectiveness of sanctions and what is expected when they are introduced.
Secondly, according to A. Movčan, a solid part of the sanctions contributed to the Kremlin’s strategy.
First of all, the sanctions related to limiting the export of capital from Russia, the sanctions aimed at the oligarchs – individuals who are not directly involved in military actions and decision-making – gave the Kremlin an opportunity to stabilize the economy.
“As well as senseless sanctions aimed at limiting imports to Russia. They have simply given Russian propaganda a convenient narrative of hostility to the West, instead of forcing themselves to present themselves as a rights-eroding dictatorship, restricting Russians’ ability to, say, import goods and export capital.
The West acted precisely in favor of the Kremlin, becoming the enemy it needed at the time. As a result, the consolidation of the Russians strengthened in particular, which was much greater than anyone expected,” the financier assessed.
In his view, the West, on the contrary, should flood Russia with imports to soak up the currency earned from oil.
“Anything that directly or indirectly contributes to the possibility of military action, of course, should not be sold. But BMWs, Louis Vuitton handbags, jewelry, hamburgers, IKEA furniture, and anything that cannot be used for war should be sold openly, freely, and in any quantity, as this would surely compete with the state’s task of having money to support its military capabilities.” , – commented the financier.
Where is the limit of Russia’s overheated military economy? When will it stop growing?
“The military economy does not have a magic wand, it does not create incentives and it does not create an economy by itself. It is just a way of redistributing economic resources from some state coffers rather inefficiently. Previously, the budget was in surplus – 3 percent. surplus, and reserves grew rapidly, and now the budget is in deficit, let’s say, minus 2 percent. And the state is increasing its debt, which used to be small”, explained A. Movčanas.
However, he predicts that the military industry’s share of the economy may grow even further. He gives the example of Israel: the military part of its economy is about 15 percent. GDP. In Russia, it now reaches 10-11 percent.
2024-07-28 16:09:30