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Published: February 10th, 2016

"Poverty and Inequality: treatment recipes" - the theme of the new section of the Moscow Economic Forum, which will take place on February 16 in Moscow. In anticipation of the event co-chair of the MEF, the president of the Industrial Union "New Commonwealth", the chairman of the Federal Council of the “Party of Work” Konstantin Babkin told the "Regions of Russia" how stimulation of the production ofnon-raw materials will help to rid Russia of social problems.

- According to analysts, in 2016 the poverty threatens a third of Russians in the foreseeable future -half of the citizens. Konstantin Anatolevich How do you assess such a prediction?

- There are two options. The first scenario is pessimistic - the current economic policies will continue, as a result, the degradation will worsen, poverty will increase, the number of localities and enterprises decrease. The second option – a turnaround will finally happen in economic policy, the potential of the country will be implemented, and then the concept of poverty in Russia will disappear in to the past, because people will be demanded, they will have opportunities to use their talents and provide for themselves. And the state will be able to support the people who, for some reason or another are unable to work or earn enough.

- The official unemployment rate in Russia as of January 2015 was 5.5%. In your opinion, in whatareas are the most cuts now? Who remain out of work?

- Official statistics are greatly underestimated. I think there are actually not 5% but 25% of unemployed people. To official figures, we have to add on two million accountants who due to improperlyarranged financial reporting system are busy with useless work. Let us add another two million security guards, who are not known to be engaged in productive work, which is a form of hidden unemployment.

The situation with unemployment may develop on the same two scenarios. If you the current economic policies will continue, the actual number of unemployed will grow in all areas. The manufacturing sector will suffer in the first place, and people engaged in creative work, will continue to lose their jobs. For extraction of coarse materials a maximum of 5 million people are needed. And from 5 to 10 million people for support. The rest are the excess, but their number will be drastically reduced by unemployment, degradation, stupefying, encouraging emigration.

The second scenario is a positive - all non-primary manufacture: agriculture, industry will develop. Then there will be no unemployment, because people will be demanded.

- What measures can help to counteract the growing unemployment and reduced living standards?

- If we abandon Gaidar's priorities of combating inflation, accumulation of the stabilization fund,membership in the WTO and other fantasies, will start to build the economic policies that promote non-commodity manufacture, it immediately becomes clear what to do. For example, you should not raise taxes, and the key rate of the Central Bank, you should radically reduce them; support exports. Loans mustbe cheap.

- How, in your opinion, should look like principle of a fair distribution of wealth in society?

- Giant bundle today is encouraged by the State because even the rich pay taxes less than poor. This serious problem makes society sick. I would suggest to solve it not through the expropriation of property under the old formula - take and share, but through the development of non-primary sector - agriculture, industry. If we have to grow the pie that can be shared, that is the income of all society, we can build a policy so that young, novice, poor, evil can earn, to show their talent in the first place. We need to give the opportunity to earn not to the oligarchs, but for ordinary people. To build a system of education, so that people in the region could gain knowledge and apply them.

Agriculture is just one of the industries in which you can build such a policy. A few years ago it was announced that the government supports agricultural holdings. This policy is still in effect: first of all state aids by preferential loans, subsidies which only a handful of the largest agricultural companies get. Small farms in the region has never been supported. In my opinion, the agricultural policy must be changed to the opposite: to bet on the sector of small and medium size, helping them to sell products at reasonable prices, to provide them access to government support, high technology, education. Then the support of agriculture will be 300 thousand companies across the country, each of which is a few dozen shareholders. If these companies become profitable, millions of people in Russia can earn in agriculture.

Using the principle of equal opportunities in industry and in other areas, we can solve the problem of property stratification. This is the path to a more just society and a more efficient economy.

– How to resist the growth of prices for housing and communal services, tariffs of natural monopolies, transportation, food?

– Measures bluntly aimed at limiting price lead to the suppression of the real sector, increased unemployment and makes food inaccessible. We should not suppress the agriculture but stimulate it. Then people will earn a lot, and there will be many products. I am deeply convinced that the solution to all problems is in the development of real production.

– From time to time there is a proposal to return the government ration cards under the guise of supporting the poor and helping domestic producers. How do you assess this proposal? Who will benefit from the introduction of ration cards?

– If you correctly introduce the system it can be useful at this stage. Today because of the high cost food is not available to many people, so the state is hit by price, replacing exports and encouraging imports. Trying to solve the problem thus leads to an increase in rural unemployment and increased poverty.
If you introduce a card to give the poorest people guaranteed minimum set of products, so that they can get free a certain amount of sugar, buckwheat bread on a monthly basis, and the government will allow farmers to sell the products of their labor at prices ensuring the profitability of production, the active development of the village will begin. It will revive the economy, create jobs and give people the opportunity to earn money, it does not hurt the poor because they will be guaranteed a minimum ration. Once in the new economic policy of agriculture will come to another level of development, several times will increase annual production volumes of food will create millions of jobs, the poor will be much less, because people will be able to express themselves. And when they will earn ration cards would no longer be needed. Therefore, a temporary measure, which is used in Germany and the United States, where there are food stamps, I think, at this stage it is possible to support in Russia.

– How, in your opinion, it is possible to solve the problem of foreign currency borrowers, in particular, consumer currency mortgages that are not able to repay their loans now due to the fall of the ruble?

The fact is that the risk was taken by both: the borrowers, who knew that the ruble may fall, and banks that could run into problems. Directly this problem, of course, can not be solved, but it is possible through the development of the economy, when people will be able to earn more, and after a change in the policy of the Central Bank of the Russian Federation, which increases the cost of loans in Russia. The Central Bank must drastically reduce its key interest rate, then people will borrow in rubles at low interest rates and carry far fewer risks. Second, the central bank should stop terrorizing the banking system through the revocation of licenses and cease to withdraw money from Russia.

– What reforms in the field of education, science and culture you consider necessary?

– First of all it is necessary to ensure that they meet the needs of non-commodity production. Today, masters and bachelors who know around a little bit and nothing concrete, find no application. We need to get closer to the Soviet system - to train specialists for the production of gearboxes, for the production of gears and so on. D.

Changes are needed in the field of culture - the main channel must cease to promote debauchery, idleness and dalliance. In place of the Minister of Culture, I would have adjusted the policy in the field of mass media, so that they stimulate cravings youth to study, creation, high morals.

– Thank you Konstantin Anatolevich.

Source: Регионы России