From Nezavisimaya gazeta, Sept. 28, 2021, Condensed text:

Russia, which has tremendous potential, could become a kind of economic hospice if its economic policy does not change radically. This was the conclusion reached during a discussion of Russia’s new national security strategy [see Vol. 73, No. 28‑29, pp. 9‑12] at the Chamber of Commerce and Industry of the Russian Federation. The course of “preserving” the population is no longer enough in the face of the prospect that Russia’s population will be reduced by half by the end of the century,

[Russian President] Vladimir Putin approved the national security strategy in early June, but he has only decided to discuss it now. Possibly because of summer vacation, and possibly because of an unwillingness to raise critical issues in the run-up to the State Duma elections. The plan states that its implementation will help improve the quality of life and the well-being of Russians, build up the country’s defense capabilities, and strengthen the unity and cohesion of Russian society. However, participants in Monday’s meeting did not feel the document offered enough specifics or was closely coordinated enough with other strategic documents. They also commented that previous strategies, including the 2020 version [of the final version adopted in 2021], which has yet to be implemented, contained specific indicators that made it clear that their goals were unachievable. There is no threat of this with the new document.

Russian Academy of Sciences academician Sergei Glazyev said that the new strategy’s goals are correct, but that there are no mechanisms to implement them. Not one of the strategic tasks proclaimed in the previous (2015) version of the strategy [see Vol. 67, No. 51, pp. 13‑14] has been implemented, he noted, adding that “many indicators show that the economic situation has deteriorated. Today, 8% of our economic activity is created by migrant workers, which reflects the country’s lack of a comprehensive economic policy.”

Yury Krupnov, chair of the Supervisory Council of the Institute for Demography, Migration and Regional Development and member of the Council, believes that an advantage of the strategy is that its main priority is preserving the people, a point he says was not included in previous strategies. However, he does not think that the new strategy’s approaches to preserving the population are sufficient. “Preservation of the population is a task for prosperous countries. Since the dissolution of the Soviet Union, since 1992, our country has been clearly dying out, and all official prognoses say that by the end of the century only half our population will remain.” “Preservation” in such a situation is similar to a hospice.

According to Bulat Nigmatulin, general director of the Power Engineering Institute, within the next 10 years, the country will lose 500,000 people each year. With medical expenses accounting for 3.1% of annual gross domestic product until 2024, it will not be possible to reach an average life expectancy of 78. He said that “80% of children are born to women aged 23 to 34, and the number of women in this group will fall to 10.5 million by 2027, compared to 17.5 million in 2014. Federal subsidies for families with multiple children won’t help in this case. To maintain the birth rate, we propose raising the level of support for families with two children to half the average salary in the region.” This is all the more necessary because his data show that the share of total wages in Russia’s GDP fell from 62% to 55% between 2013 and 2019, and the population became impoverished. For comparison, this share has held steady at 70% in new European member states and at 73% in “old” EU states.

Sergei Mironov, who leads the A Just Russia faction in the State Duma, does not believe that the goal of the National Security Strategy can be achieved without a consistent industrial policy. “The strategy says nothing about regulating the tariffs on natural monopolies or about regulating oil prices, but these are what is driving inflation, and this is having a detrimental effect on the socioeconomic situation in the country,” he commented. “The strategy also doesn’t say anything about the vitally important area of state procurement, which could be used to stimulate business, including small and medium-sized businesses, but for now is only a source of brazen corruption.”

Academician Glazyev says that the strategy’s provisions are difficult to implement in real life: “Our institution of bankruptcy is criminalized to such an extent that 98% of businesses are auctioned off, their assets are pilfered and the businesses cease to exist, and the main reason for this is our incorrect monetary policy.” He believes that Russia could develop two to three times faster if it could find the right combination of strategic planning and financial and economic policy.

Mikhail Delyagin, academic director of the Institute of Globalization Problems, thinks that “freezing money” in the federal budget is a problem that must be solved to guarantee the nation’s economic security and well-being. “Our government is continuing to put the money it has received from oil and gas revenue in a piggy bank. Over the next three years, it has planned to allocate 2.5 trillion rubles to support production, while it will take 7 trillion rubles out of the economy and send it to the National Welfare Fund. The government is ‘freezing money’ instead of eliminating the gap in production chains. At the same time, the market simply lacks components, and our manufacturers have become hostage to the situation: We can’t make the components ourselves, yet we dictate our conditions to our Western partners.”

Russian Federation adviser first class Arkady Samokhvalov says that Russia’s economy is still based on oil, but this approach is extremely detrimental to economic development and the future of the next generations. “State revenues from imports amount to almost 25%, while producing these same goods in the country could enrich the country three times more. But we’re still building up exports of raw materials, not our own branches of the real economy. There is clearly opposition to the necessary solutions and reforms at the senior management level. And without political will, there will not be any changes to economic policy,” he said.

According to Konstantin Babkin, chair of the board of the Chamber of Commerce and Industry of the Russian Federation on Industrial Development and the Competitiveness of the Russian Economy, the appearance of a new strategy is an important event, but the strategy has its internal contradictions in terms of economic issues and does not provide for a positive turn in the economic course. He said that some of the advantages of the strategy include a declared course of building an independent economy, decreasing dependence on imports in key industries, improving food and energy security, processing resources, relying on the country’s internal potential and reducing income stratification.

However, Babkin believes that many of the strategy’s premises contradict current government policy. “The strategy does not address the need to lower taxes and says that building up reserves strengthens our security. The reserve funds are now at 18 trillion rubles, and in August they increased by 250 billion rubles. How does it strengthen our security to deliberately remove money from the country and invest it in the economies of countries that often pursue a course of containing Russia? In order to build factories and plants so that goods are available for purchase, loans must become more affordable, but we are given to understand that the Central Bank’s policy will continue to be severe and that loans will be expensive. And the phrase from the strategy’s previous version that the Central Bank should be responsible for economic growth has disappeared.”

Babkin believes: “The strategy declares the goal of building a strong, modern self-sufficient economy, but this still hasn’t been guaranteed by anything. Based on the words written in the strategy, we must demand radical changes to tax, foreign trade, science and education policies.”