Tatyana Abankina: “The crisis has shown that even big business has no reserves”
It became known that the plan for the restoration of the Russian economy, proposed by the government, is designed for 2020-2021. Of the 8 trillion rubles laid down in the plan, 6 trillion falls on budget expenditures and lost revenues, and 2 trillion on investments, including extrabudgetary, in infrastructure.
The total amount includes previously approved measures to help people and businesses. Also over 700 billion rubles. still not worked out government “breakthrough initiatives” will cost.
Tatyana Abankina , director of the Institute for Public Resources Management at the Higher School of Economics, at the request of NI, evaluated the government’s initiatives.
- It seems to me that this plan will be finalized. Now it does not look like a whole. These are different blocks, most likely proposed by different ministries, which unite different directions. One of the areas is the support of people, small and medium-sized businesses, including large enterprises that are in difficult situations, the most vulnerable groups of both economic entities and the population. Here, the measures are not expanded in comparison with those that have already been promised, and in fact it is only about supporting families with children, in fact the least affluent, of the share of the population whose incomes are below the subsistence level. To a certain extent, everyone expected that these measures would be more carefully worked out. On the other hand, many experts note, and I agree with them, that the consequences will affect a much wider circle of the population, which today may lose their jobs. These measures are clearly not enough. It seems to me that they should be expanded.
Of course, all this requires justification - how much additional resources can be allocated for these purposes. The depth of the crisis will be much more serious and will require more support.
The second direction is to try to dampen the consequences for large corporations, entire industries. There is agreement on what kind of industries this will be. This list is not yet final. It is obvious that the sectors related to railway and air transport, with communication, in order to ensure the transition to a digital economy, were selected. Undoubtedly, it is important to strengthen import substitution and self-reliant enterprise development. It is a question of tourism and sectors related to consumer behavior, but specific measures are not visible. But in all cases, those subsidy measures or tax exemptions, collateral for loans, partial tax refunds today are also not enough for these enterprises to make an innovative leap.
Today, measures are limited to ensure some stability, to try to prevent large-scale reductions, bankruptcy. But this is not enough.
Those measures that are proposed lead to the nationalization of the economy, because only those who receive state support will benefit. But it does not apply to everyone. The sectors and individual enterprises that will be assisted will be identified. Accordingly, others will find themselves in a more difficult and difficult situation. This is not a simplification of the rules for everyone, but selective decisions related to who the state chooses.
It is absolutely true that the plan contains an investment scenario and support for development prospects. It has not yet been worked out very clearly, but the document has not yet been adopted. We see that there is a coordination of interests regarding who will be in the investment projects that will be supported.
And one more direction about which I want to say. These are measures that are aimed at the settlement of labor relations. The unemployment rate there is very optimistic. With the closure of enterprises and a reduction in consumer demand, of course, the collapse of services, small and medium-sized businesses working for the final consumer will be much more powerful. Those measures that are envisaged to combat unemployment have not yet been ensured, not expanded at all.
This was discussed for a long time, and now it has become necessary to regulate the rights of employers and workers, including those with a remote form of employment, sick leave, holidays, and shorter working hours. Changes are taking place and they should be fixed by law. According to the document that we are discussing, the scale and the measures that are needed to help those who have lost their jobs and reduce unemployment are clearly underestimated. I did not see in the document how much investment projects that are planned for the construction and development of infrastructure are associated with those regions where the situation is most acute, where the risk of unemployment is high. I did not find a coordination, and this is bad, because the plan today does not correlate with territorial development. And the situation of the regions is very different. Their abilities and opportunities to recover are also very different. It seems to me that the risks are clearly underestimated.
The general feeling from this plan is that its main message is “let's wait a bit, wait, and then everything will return to square one.”
- In terms of overcoming the crisis, a specific amount of investments is indicated - 8 trillion rubles, and it is assumed that GDP growth over two years will be more than 2%. How realistic is it to achieve the planned economic growth with such investments?
- The forecasts are very optimistic. Sources of funds are not indicated. If you go for measures such as preferential taxation, a moratorium on certain taxes, then this will lead to a significant loss of funds to the budget. In addition to the National State Fund, which is now trying to attract funds from various sources, no other sources have been indicated, despite the fact that entire industries are in short supply in a number of regions. Support will also be needed for regional budgets.
It seems to me that the pace of economic recovery is clearly overestimated. I see no justification for why this growth is possible.
The state suggested using OFZ instruments, that is, issuing federal loan bonds that banks would buy, and additionally issue money under them to revive consumer demand. But how this tool will work is not very clear. At the first auction, banks did not show interest, some experts evaluate it as a failure. Therefore, it is not clear how this tool will attract additional financial resources to the economy and the fund, through which investments will be provided.
The situation continues to remain very tense, but we do not see pessimistic scenarios for overcoming the crisis. These options are not considered.
- Before the coronavirus pandemic and the fall in world prices for hydrocarbons, last year's GDP growth was slightly more than 1%. How will the expected growth of 2 percent or more be ensured in the next years?
“I can't justify it.” Those investments in the amount of 8 trillion rubles that are supposed cannot give such a growth. They will not give such a contribution to the economy. A big contribution was made by trade, in which there will be an undeniable decline. Construction in the pre-crisis volume also cannot be held. The government’s plan does not identify those sectors that will provide the planned GDP growth. I do not expect such a rate of recovery in either 2021 or 2022.
The plan indicates government subsidies, government procurement, and government orders for manufacturing products. Mainly for large enterprises. But this will ensure sustainability, not development.
- What is the point of nationalizing the economy? Seventy years of experience in the USSR demonstrates the obvious disadvantages of state management. “There never was such a thing, and here again” ...
- This process has been in our country for a long time. Independent business did not stand up. There is close cooperation with the state. This is not the first crisis that has shown that everyone is counting only on state support. State support involves appropriate obligations and state control. Even large trading companies that had tremendous revenues - all these huge malls, shopping centers and chains do not have any reserve and insurance funds. They did not form them. And now, with a drop in demand, they are ready to lay off employees and close losses. They do not take anything upon themselves and in the same way turn to the state for help.
- That is, economic laws do not work in a single territory?
- I believe that they do not work for us. We were not able to achieve transparency and transparency. The business tried to avoid taxes, customs payments, circumvent laws, receive super-profits and bring these super-profits abroad, rather than invest in development.
- Is it possible to regulate prices and return the Soviet model of a planned economy?
- As for price regulation, it is unlikely, although there are certain zones. This is fraught with an increase in the share of state enterprises, nationalization of banks, entire industries. As for the return to a planned economy, the elements of planning never went away. The Ministry of Economic Development and other ministries are involved in regulating the economy either by direct or indirect methods. As practice shows, indirect methods do not work very well for us. The main thing is that there is a great temptation to try to circumvent taxation both by companies and by people. Everyone prefers gray salaries. And now, when people retire and it turns out that they do not have supporting documents, there were no corresponding deductions, where will it come from? Who will compensate for the deductions of the unified social tax?
The country needs investments in healthcare, in medical science. This is possible only from the state budget. We do not have private investments that can be directed there.
This is not to say that our business independence has worked. Although, of course, in the nationalization, the main threat is that the list priority enterprises and sectors are selected, and general conditions are not created. Today, the questions are tough enough to prevent system failures. The banking system is under great threat, and this is the system sector.
The support of people and private small and medium-sized businesses is not great, it will hinder development, but maintaining employment in large enterprises is very, very important.