Is a disaster just around the corner? Why Kudrin, Gref and Chubais urge to prepare for the worst

Russian liberal top managers Alexei Kudrin, German Gref and Anatoly Chubais have recently noted rather pessimistic statements about the prospects for the domestic economy. For example, Kudrin has repeatedly voiced concerns about the growing role of the public sector, calling for a new privatization. German Gref, speaking at the beginning of September at the Eastern Economic Forum, which was conceived as a report on the country's achievements, made an analytical report that sharply differed from the general tone. It, among other things, said that the energy transition would cost Russia very dearly: by 2035, GDP could decrease by 4.4%, household income - by 14%, exports - by $ 179 billion, and the production of gas, oil and coal - by 52, 72 and 90%, respectively. Budget receipts will decrease by 5 trillion. rubles, or 20%. So Chubais, speaking in St. Petersburg at the anniversary of the Leontief Center, predicted a massive rejection of the main items of Russian exports in the next decade.

Experts assessed these performances in different ways. For example, Vladislav Inozemtsev, Doctor of Economics, Director of the Center for Post-Industrial Society Research, believes that such a catastrophic scenario in itself may even embellish reality, since the cumulative effect of losses in the energy sector for the Russian economy remains unclear:

“Today, mining provides 11.5% of GDP - and the figures for the decline in production indicated in (Gref's) report correlate with the estimate of the decline in the size of the Russian economy. But the energy sector generates significant growth in other sectors: suffice it to say that 44% of freight traffic in the Russian Railways network is carried out by ...coal alone. Energy and metallurgical investment programs provide aggregate demand for 5.5 trillion. rubles per year, or 5.2% of GDP (for Gazprom and Rosneft. Energy companies provide about 50% of the capitalization of the Russian stock market; they occupy seven lines in the top ten most expensive domestic companies, and the downward trend will translate into a fall in the total investment attractiveness of the market.Finally, one should not forget that in 2016-2020 the average annual volume of exports was $ 422 billion, and a decrease of $ 179 billion is a collapse of more than 40%, and incomes entering the country constitute the most important element of effective demand I will not say anything about cutting federal budget expenditures by a quarter.

In addition, all the above calculations do not give references to the existing trends in the development of the Russian economy. If we were talking about a decrease in the population's income by 14% in the conditions of their previous growth by more than 2 times, as was the case in the 2000s, the problem would not seem too big. But in the past seven years, incomes have been declining without any crisis, so the acceleration of the trend looks very alarming. A reduction in exports to $ 200-210 billion means its rollback to the 2004 levels with all the ensuing consequences. In other words, Sberbank's calculations unambiguously indicate that the 2020s will become the decade of economic recession in Russia.

I made this assumption back in 2016 in my article for the Washington Post, noting that in the 2010s, the potential for economic growth in Russia was exhausted, and the “decade of stagnation” (from 2011 to 2020, Russian GDP grew by 13.4 %, increasing by an average of 1% per year) will be replaced by a “decade of decline”. Meanwhile, then the prospects for the energy transition were not seen as clearly as they are now, and the inability of the domestic economy to modernize was not so obvious. Today, when G. Gref talks about epic losses, A. Chubais talks about “changing global elites,” and A. Kudrin suggests opposing all this with a “magic wand” in the form of a “Russian iPhone”, there are more than enough reasons for skepticism. I am sure that the time of economic "luck" for Russia is coming to an end. We must prepare for the worst..."

Political scientist Nikolay Travin found historical analogies to what is happening:

“The consequences for the economy, according to Chubais's estimates, will be sad. He did not talk about politics, but anyone who considers the forecast realistic can think for himself how sad the consequences will be for the Putin regime, which will lose the ability to keep the real incomes of the population at least at a constant level.

Chubais considers the future transformation of the economy to be unprecedented, since in all previous industrial and technological revolutions, business has made the upgrade that suits it. Now states and societies will force business to abandon coal, oil and gas for the sake of ecology.

I still see one interesting parallel in history. But the analogy should not be looked for in the sphere of industrial revolutions. We are talking about the military revolution of the 16th - 17th centuries. During this period, the monarchs were forced to abandon simultaneously the "oil, gas and coal" of their armies: from the old weapons, old fortifications and the old principle of building troops. Swords and bows were replaced by firearms. The simple stone walls, scattering from the cannon salvo, were replaced by a complex system of bastions. The feudal lords serving for the land were replaced by a mercenary army, serving for money. All this together led to an unprecedented sharp rise in the cost of war.

How did this turn out for society? An unprecedented drastic restructuring of the tax system. The states survived, which managed to siphon more funds from the people. First of all, France (from the time of Richelieu), England (from the time of the Glorious Revolution), Russia (from the time of Peter) and Prussia (from the time of Friedrich-Wilhelm). Those who failed either failed (Spain) or disintegrated (Poland).

It seems that if Chubais is right, society in the 21st century will have to fork out seriously in order to pay for the energy transition for business..."

But journalist Pavel Pryanikov urged not to worry especially, the raw materials economy of Russia, in his opinion, will still survive:

“So far, no ABSTRACT energy transition is visible in the world, which would lead to a drop in Russian oil, gas and coal by 50-90%.

Let's take two main markets for Russia - Europe and China (more broadly - East Asia).

Yes, Europe will reduce coal generation (primarily in Poland and Germany - our key buyers of the same gas), and also partially - at nuclear power plants. But this generation will be replaced by gas. For renewable energy sources, the same problem remains - reliable energy storage devices (absorbers of peak solar generation in the daytime and wind turbines). They are still not there.

Those. Europe will reduce its consumption of oil (move to e-mobiles) and coal, but at the same time increase (and strongly) its consumption of gas.

East Asia market. China is only increasing coal generation so far and plans to gradually reduce it only in 2030-35 (to the current level of 2021). Booming Vietnam and, most importantly, India will increase coal consumption. Those. coal in this macro-region is only a plus for the year until 2035-2040.

And in general, East Asia is a growing economy and growing markets for all raw materials for many decades.

Oil consumption will increase, gas consumption will be multiplied. Incl. and such a huge market as Japan, where coal-fired generation is being converted to gas.

If we add up the future energy consumption of these two macroregions, it will turn out for Russia in the future that:

- coal exports will remain approximately the same as now (well, maybe some fluctuations at the level of -5-10%);

- oil exports will decrease slightly (10-15 percent);

- gas exports will grow by one third.

- there will be a market for hydrogen (on which Russia will also sit tightly as a supplier).

There is no disaster in sight.

But this does not mean that the world will not develop hydrogen energy (as well as ammonia, methanol and biofuel), wind turbines and solar panels (not only quantitatively, but also qualitatively - with an increase in their efficiency; SES is already being brought to 28-29% efficiency ) and other renewable energy sources (tidal, geothermal energy and even wood pallets). It's just that this process will be very prolonged, and most likely we will see the consequences of such an energy transition closer to 2050-2060.

Why Gref, Chubais and Kudrin are voicing this alleged catastrophe is understandable: they want to be the first to stake out a political place for themselves in the future Thaw-Perestroika (“call us, we know how to save Russia!”). And also - to sit down already now as the main operators on the emerging market of hydrocarbon quotas (on them Russia can earn up to $ 50 billion a year, which, by the way, compensates for the drop in oil exports), as well as Russian renewable energy sources (more precisely, on their state order, this is also billions of dollars)..."