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Published: February 13th, 2017

Possible lifting of sanctions against Russia and lifting of Russian counter sanctions should not put national producers at a disadvantage with competitors, said the Chairman of the Moscow Economic Forum Konstantin Babkin.

- Konstantin, today You are openly talking about the fact that we should not rush in the embrace of the West. Otherwise, we will we be strangled?

- It is possibly sounds good: why should we quarrel – let's be friends. But you need to watch what is meant by the notion of the lifting of sanctions. I'm wary of such claims. At least because Russia's accession to the WTO gave up our market, and not only agrarian. Producers, particularly in agriculture, were in absolutely unequal competition conditions with their foreign colleagues. We could not support its real economy as its support in the West. The introduction of the Russian counter-sanctions somewhat improved the situation. We were somehow able to protect our farmers, there was a breakthrough, for example in cheese making, we set the historical records of grain production, engineering gives the increase up to 30 percent a year...At the same time, as you can see, none of us are nowhere near starvation, there is no commodity shortage promised by ultra-liberal’s, and in some of the most important segments of the market (poultry, pork), Russian products almost completely replaced imported ones.

- If we lift our sanctions will we roll back, then?

- If you return our manufacturers at a disadvantage with the West, then why do we need such a trade "peace" in quotes. It is necessary to separate a quarrel and the correct policy that not only responds to external stimuli, but primarily achieves the strategic aims. Our aim is to raise our country, not to support the economy of foreign countries.

- We are living in a mode of the sanctions policy for more than two years already. However, the program of import substitution in general, not just, for example, in poultry, is not going so well. What are the reasons?

- The main reason is the remaining inequality of our manufacturers with foreign ones. A simple example: in the EU average subsidies to farmer’s amount to 500 euros per hectare, in some countries, like in Sweden – 2000 Euro. We have no more than 8 euros per hectare! And now, compare the 2000 or 8 euros, moreover these 8 euros are quite transparent. And then how our farmer can compete with a German or a Polish farmer? In Europe, the cost of the loan is one and a half percent per year, we have 15% and our farmers give all of the profits to the bankers. This is a disadvantage.

- But there is little money in the budget. Is that so? What can Russia subsidize its manufacturer from?

- There is enough money in the country. More than two trillion rubles were spent only to reorganize the broken banks for the last three years. While the financial authorities openly admit that 80 percent of bankruptcies are criminal. Meanwhile, to support the agricultural machinery industry 8.5 billion rubles were allocated in 2016. Do you feel the difference? The banks - sanatory receive from the CBR cheap loans at 0.5 percent per annum for 15-20 years. If any of the real producers had such preferences, then, believe me, we would have a different economy and would not complain that Russia does nothing but produce raw material.

- By the way, can the example of Trump, who came to power on slogans about the revival of the industrial power of the United States, also move the Russian authorities to review the economic policy?

- Of course we need to follow the example of the new American President. He is a very good protectionist. In the modern world the fight is not over resources, but jobs. Those who will create conditions to introduce new technologies, those will keep their place under the sun in the long term, therefore, the correct economic policy is the main condition for the survival of the nation. And I hope the authorities understand this. Recently, President Putin instructed to develop an economic strategy up to 2025. And now we are under the auspices of the CCI formulating our proposals.

In short we have, three and a half "pillars" of the right national economy.

First, we have to change trade and economic policies, and here the protectionism is needed.

Second is to determine the price and duration of credits to the real sector. The country finally must have cheap and long money, without which no major project is possible in principle.

Third is a tax maneuver. Fiscal levies should be such that those who invest in Russia and those who consume Russian goods received the benefits.

And another half a turn is the so – called "reverse tax maneuver", creating a situation in which it is not profitable to export resources from Russia, but to process here, so they were cheap on domestic market, 40 percent cheaper than today. If we will meet these three-and-a-half conditions, a rapid growth of the economy will begin immediately, and, I believe, that it will lead us to success.

Source: newizv.ru