NEWS 23.09.2016 21:17 eyes: In Russia, the lack of raw materials, plants and personnel, the economic crisis is man-made
Advisor to the President of Russia, the author of the plan to extricate the country from the economic crisis Sergei Glazyev explained that all the current financial problems associated with dysfunction of government regulation. “We have growth opportunities determined by existing resources. Production capacities are loaded slightly more than half. We can increase production by more than 40% on the basis of existing capacities. Thus when we say that this is a legacy power – this is not true.
Look at the power cost. Modern metallurgical plants metal – bankrupt in fact. I know many such examples. Brick factories are modern, with modern equipment. Engineering is working on 40 percent capacity. That is are including of power which were introduced over the last 5 years, new capacity.
The second issue is labour. We are told that we supposedly low unemployment. Notice that 5 percent is not low unemployment. But we have to add the hidden unemployment. And that people part-time work and a long vacation is collectively get about 12 percent. Because of the tragedy in the Ukraine – a huge influx of qualified people with good skills that are in demand.
If you take raw materials. I was recently in Tatarstan – there was achieved 100-percent processing of oil. This means that we have the yield of oil was increased in the half due to integrated development. In modern enterprises, do not waste what we have long sought. But if we use oil as export of energy carrier and chemical raw materials, the production yield increases.
One cube of wood, we produce 10 times less than commercial products than in Finland. What, we can’t do the same thing? Can. We are talking about the possibility for a banal deeper processing of raw materials in key areas of our resources sector to increase output significantly,” – said Glazyev.
According to the academician, the main problem of the Russian economy is the government’s lack of any desire to deal with the actual economic growth and the Central Bank – maintenance of a stable ruble.
“I see that we have a complete dysfunction in the system of state regulation. It would seem that our government should be concerned about economic growth. What is economic growth? This demand growth, investment growth. Instead, it turns out, the reduction of both. The investment will be reduced due to the fact that taxes increases; the demand will be reduced because consolidation, that is, the reduction of budget expenditures.
All the way around. The Central Bank should be responsible for the stability of the exchange rate. And he’s a free navigation of the ruble. I’m not talking about the fact that, according to the theory of money, he must also create the conditions for high investment. And it turns out that we artificially fall into the trap of simultaneously high inflation, falling production, declining investment, rising costs, reverse the increase in inflation due to rising costs.
Of course, the current crisis is man-made, it is associated with gross errors in macroeconomic policy. But the question of how to get out of it. Even if the government would just do their job: the government – a rise in investment activity, an increase in expenses in line with its social obligations, and the Bank will provide a stable currency, we will get plus 4-5 percent due to the fact that the business will finally feel stable conditions.
No there are no secrets. And if we add to this the mechanism of the strategic indicative planning, underpinned by a flexible monetary policy, bind the plans of production growth in the emission of money, we can get growth and 8%. And in some areas – just explosive growth.
But here the main thing – responsibility for the use of money” – leads the “new Russia” the words of the Advisor to the President. Glazyev also said that his program is based on a very specific tool suggestions, on the understanding that the money in modern macroeconomics are no more than a tool of growth.
“Modern money is not gold and even dollars. Modern money is a tool for the economic turnover and investment growth, which are issued under the debt, under obligation. The U.S. dollar for 90% issued under the Treasury bills of the United States. And the whole money issue, which we use here, in Russia, is money, passed through the us budget deficit, which reaches 8-10%.
And when they need growth, they cast all thoughts about the fact that the budget deficit must be no more than 2-3%. From the moment when the bonds of European countries appear in the market throws them a government – the European Central Bank under them prints money. And before that, Central banks of European countries printed money for the debts of the enterprises.
When in Germany he gave 20 marks after the war, then economic growth has been financed due to the fact that the German Central Bank has issued lending money to commercial banks secured by promissory notes of the enterprises which took out loans from them. Money is a tool”.
