The country's economy will be rescued only by domestic government orders

16 марта 2022, 11:48
In the context of tough sanctions, Russia should focus not on exports and export of resources abroad, but on domestic development and domestic demand

Sergey Vasilyev, entrepreneur, publicist

How can the Russian economy survive in the face of unprecedented sanctions, the freezing of half of its gold and foreign exchange reserves, and a possible trade embargo imposed against Russian export goods?

How to build our economy if our export stops and any foreign assets in the accounts of Russian residents are at risk.

The day before yesterday, we arrested and froze the assets of the Central Bank in the West. But so far correspondent accounts of a number of our major banks are working. For example, Gazprombank operates, through which Gazprom and oilmen receive foreign exchange earnings for energy resources sold to the West.

And today there, on the account of Gazprombank (as well as in a number of other Russian banks), new foreign exchange earnings from the sale of export goods are accumulating. The payments of our companies on imports will also be paid from these accounts. Thus, the foreign trade operations of our companies have not been stopped. But the risk of possible freezing of these accounts as well, i.e. not only the assets of the Central Bank in the West, but also the correspondent accounts of our commercial banks in the West - there are.

If the West went to freeze the assets of the Central Bank, it can go further.

In general, such a problem and risk exist, and therefore the Russian economy should look for a new model of its functioning when we stop building up foreign assets so as not to leave them at risk in Western accounts.

And this will inevitably lead to a change in the very paradigm of our economic growth. We must focus not on exports and the export of resources abroad, but on domestic development, on domestic demand.

It is the growth of domestic consumption that can only compensate for the decrease in external exports.

And if yesterday idle discussions about who is smarter than Kudrin or Glazyev were just scholastic conversations of bored macroeconomists, today it is already an agenda for survival.

If exports begin to decline sharply due to a break in supply chains, if we are forced to sharply reduce exports to Western countries because of the risks of losing foreign exchange earnings there, then we need to replace this with an accelerated domestic government order.

All the plans that the Government was making yesterday for investments in road construction, bridges, aircraft construction, and so on and so forth, should not be reduced, but sharply increased.

It is the accelerated domestic government order and investment in domestic infrastructure that can only compensate for declining exports.

What specific plans and programs should be adopted now is a matter of technology.

The main thing is to make this decision!

There is no other way anymore...

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