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Published: February 8th, 2017

Ruslan Grinberg, the head of the Research Institute of Economy, RAS, told in an interview with "AIF" about whether our economy is ready for the next blow and how to protect it from the external shocks.

The burden of uncertainty

Victoria Gudkova, "AIF": Ruslan, what is the probability of oil prices falling and the devaluation of the ruble?

Ruslan Grinberg: it will depend on the ratio of the factors of rising in price and reduction in price on the world oil market. I believe that the first has already been exhausted, but the second will begin to act with increasing force.

First, there is no signs of accelerating sluggish economic growth in the world as a whole. Second, there has been a serious slowdown in economic activity in China, for the first time in 15 years. And it is perhaps the most powerful consumer of energy in the world. Thirdly, the setting of the USA on the rejection of imported oil, will soon be available through a large increase in shale oil production. This will expand the gap between growing supply and no incremental demand. Finally, fourth, is unlikely to last the long, price solidarity of OPEC member countries, which have pledged not to increase sales of produced oil. So, there are enough threats for prices the main product of the Russian export. So, we should not be calming down and enjoying while we have stable oil prices. As for the possible devaluation of the ruble, as it was said, it is quite likely. I think because of too much dependence on oil prices, we just haven’t matured to a regime of freely floating exchange rate of our currency. The ruble should be supported. The stagnation of the economy and lack of investment are largely caused by insecurity and uncertainty they are the feelings about the future of the ruble. Our economy has so large export and import components that the chronic instability of the national currency simply contraindicated.

— They say: we must get off the oil needle. And how to do it, are there any ideas?

— There is an understanding. Moreover, there is a belief that the country must achieve stable economic growth and overcome the primitive structure of the economy and exports. The differences start when we choose ways to solve this problem. Here is a dispute between two schools of thinking. The first, which is called the liberal considers that there is a need to improve the business environment. To lower taxes, reduce administrative burden, provide guarantees of private property, independence of the judiciary. Plus, structural reforms in education, health, culture, science. These reforms essentially boil down to the fact that the person is paying for everything from the maternity hospital to the grave. The bright representative of this school is Alexei Kudrin, who is now preparing a detailed programme.

But the orientation is only on private business, and it is recognized by the proponents of this approach, will not help the economy to make a leap. If it grows, it will be very slow and not more than 1% a year. I understand the concerns of our President, who set the government the task to provide economic growth rates above the world rate (now 3%).

We, at the Institute of Economics have a different approach. I fully agree that we need to create conditions for conducting business, but it is not enough. There is no business yet in our country, that would pull the country out of the quagmire of stagnation. It is the power of public investment. First of all, in infrastructure and mega-projects. It is necessary to build ports, tunnels, a network of highways and high speed Railways. To deal with infrastructure projects is necessary because over the last quarter of the century, we are far behind on consumer ready products. It is very difficult to compete, for example, with China. And in the infrastructure construction there is no competition.

— Does this mean that Russia should abandon the idea of mass production of serial products — airplanes, cars, refrigerators?

— No, but we should follow the selective industrial policy with clear priorities. It is necessary to conduct an honest investigation of post-Soviet scientific-technical potential to understand where do we have manufacturing capabilities to create competitive products, and where we are hopelessly behind. I think we are able to run about 10 brands such as Nokia or Samsung.

Russia should also reduce dependence on raw resources exports. I’m talking about the construction of high-speed railway for transiting goods from Asia to Europe. It's mentally very close to us. We love to make something unique, grandiose — like the TRANS-Siberian railway, the spaceport or the Northern sea route.

— And is there a need in such a corridor in the conditions when the leader of the most free country in the world says about the restriction of trade relations?

This is the irony of history. The United States, which called for globalization are going to go to isolationism, and the leader of authoritarian China called for openness on the forum in Davos, Switzerland. The best forecast was made in one of the reputable consulting firms: "A Lot depends on what will Trump do. But it is the fact that he doesn’t know what he’ll do." But the US has a system of checks and balances. I hope eccentricities of the President will be restrained.

— You repeatedly said that you look at the future of our economy with optimism. What inspires you this optimism?

— We are an independent state, we have the resources, a bit shabby, but a good human potential. If a barrel of oil will not get much cheaper this year, it will be more or less promising stability. People are accustomed not only to live but to survive. This is shown by all the polls. They instinctively feel that revolution is not needed. In general, as one of my foreign friend noted, "you have a brilliant position, but not hopeless."

— And what prevents us to move on?

— There is a lack of negotiability, the culture of dialogue and compromise, the inability to admit a mistake. Once we derided Gorbachev’s "consensus", but he had spoken correctly, wisely. Of course, small countries are easier to agree, but there are many of us and we are different. And we have to do it.

Source: aif.ru