''It’s clear that price for all Russian feedstock will fall''

Dmitry Potapenko on the Russian economy, ''airbag'' in the form of the population

''It’s clear that price for all Russian feedstock will fall'' Photo: Roman Khasayev

''There will be changes in the energy paradigm of the world economy in 2020-2021 that will change the Russian economy, which, in turn, will change our so-called 'politics','' thinks famous Russian businessman and economist Dmitry Potapenko. In an interview with Realnoe Vremya, he told about inevitable bad times for the Russian economy, causes of the imposition of the tax on self-employed people and if waste incineration plants would do any good.

''The address doesn't set a goal of giving money''

Mr Potapenko, let's start the conversation with the president's state-of-the-nation address. How can Vladimir Putin's new measures of social support be explained? Can they be a reply to the discontent in society at growing prices, tariffs, falling incomes?

There is no discontent. How do you think it's expressed? In ratings? Ratings are rubbish! Are people coming out? No, they aren't.

What about the indignation in social media?

It's not indignation even if they will be indignant in social networks three hundred times, it's a chat in the kitchen. Being indignant is when you take a measure. The president's rating is as high as never before, and if you announce an election tomorrow, Putin will score his 86%.

Then explain the falling ratings of the Russian Public Opinion Research Center, which can't be called an opposition sociological structure.

Everything depends on how you will ask the question. This is why one should pay attention to the Russian Public Opinion Research Center's latest data up to a point. If people don't have the right to remove the president, and even a deputy or a ministry's functionary, they just let off steam.

How do you yourself assess the measures of social support expressed by Putin? A rise in social benefits for children, tax concessions on property for families, 450,000 rubles for large families to pay off a mortgage.

There are no measures there. It's like a slogan ''A man for every woman, a woman for every man!''.

''The people can ask the president about it even three hundred times, but the people don't have rights and possibilities to make take these measures. They can be said in several years in the end: ''Do you want it to be like in Paris or in the country of 'Khokhols'?'' Photo: kremlin.ru

Is it just intentions?

It's just an expression of intentions. There aren't 125bn rubles for such intentions now. The address doesn't set a goal of giving money.

But people will wait for these measures to be taken, remind of them.

The people can ask the president about it even three hundred times, but the people don't have rights and possibilities to make take these measures. They can be said in several years in the end: ''Do you want it to be like in Paris or in the country of ''Khokhols''?.. Or they will be shown some terrifying video about Navalny, and the people will anyway choose the strong tsar.

Does it mean we should rely on a 8% mortgage and a social contract?

At the moment, one should be treating the address as a normal propagandist activity. If you're a thinking person, you will understand one should be judged by actions, and the majority of intentions – the same 8% mortgage – are impossible. Putin has delivered 15 addresses, and none of them improved the population's quality of life.

What about the maternity capital?

The idea of maternity capital is carried out, but again, a question arises, if it's a great stimulus to increase natality. Not the maternity capital but a usual shipment of the Gastarbeiter raised natality, by the way.

''Changes in the energy paradigm of the world economy will change the Russian economy''

What awaits the Russian economy in the short run?

There will be changes in it, but they will gradually asphyxiate our economy. There will be changes in the energy paradigm of the world economy in 2020-2021 that will change the Russian economy, which will change our so-called 'politics'. And in this case, the authoritarian regime might be substituted by a regime close to military junta when there will be separated two of the existing seven groups of the Kremlin by asphyxiating the other five, and they will come to power. But the same junta might begin making some democratic changes after being at the wheel for some time.

Could you specify the changes in the energy paradigm of the world economy?

Many countries will try to refuse internal combustion engines by 2025, while hydrocarbons are the major Russian export. The situation will become sad in the conditions when alternative types of fuel are created, but Russia doesn't supply anything similar to the world market.

''Why should governors do something for small businesses if they understand there is oil and gas to meet their needs? The rest – small and medium-sized enterprises in particular – is expenses for them.'' Photo: Maksim Platonov

Don't you expect a big world crisis like, for instance, famous economist Ivan Grachyov? He thinks there might be a crisis in the next years, if not this year, and it will be provoked by shale oil produced in the USA.

Grachyov's this phrase can probably be applied by 2021-2022. Not only shale oil is the case – the world has plenty of points of tension in the economy. But it doesn't matter for Russia why a crisis will break out – because of shale oil or mortgage, as we don't take part in this economy. But it's clear that the price for all our feedstock will fall.

Will Russia be ready to survive the crisis well? Leonid Radzikhovsky has recently told our newspaper that we always have had an airbag, it's the point of our economic politics. Do you agree?

We are always ready for something, but North Korea is also ready for something. Yes, there is an airbag, but the population's quality of life has always fallen for some reason. By the way, the population is our airbag, and Russia can fall onto this airbag forever because our country's population thinks ''if only there weren't a war''. And the fear is the best commodity, this is why the Russians are ready to tolerate whatever. People are the best thing we have.

How do you evaluate prospects of small and medium-sized businesses? Isn't the state burying them?

Small and medium-sized businesses will always survive, with any power – they will live even when this life has nothing. There are small businesses even in Somalia. But there is a question, how will these small businesses look? A small business is always characterised by an ability to turn into a medium-sized business, we almost don't have it. The state itself impedes it, that's to say, different groups managed by the state.

Can't regional governors help small businesses?

Why should governors do something for small businesses if they understand there is oil and gas to meet their needs? The rest – small and medium-sized enterprises in particular – is expenses for them.

''Imagine that if someone else in Europe takes offence at us, stops supplying spare parts to equip factory farming, software or antibiotics? Everything will go back to normal – we will see we substituted chicken as a product, but we didn't substitute its production technology.'' Photo: selo-exp.com

''Anti-sanctions were imposed to share the meat market among structures close to the government''

This year will mark the fifth anniversary of the country and the Russians' life under foreign sanctions and anti-Russian sanctions. What's the result at the moment?

Anti-sanctions were imposed to share the meat market among structures close to the government, the same goal was in the fish market. These anti-sanctions fight nothing more. As for European and American sanctions, I see it was a fixed deal: if Europe and the USA wanted to somehow influence the regime in the Kremlin, real economists would say to their countries' leaders in Europe and US leaders what ''buttons'' to push. Generally speaking, they like everything that's going on here. What's the most important thing for Europe? Russia's supplies of cheap hydrocarbons, and nobody pushing the nuclear button. This is why they are perfectly happy with our country's management regime.

Has import substitution worked in general? This phrase has stopped being pronounced for some reason.

Import substitution can't work, as much as they talk about it. Yes, apple imports from Poland stopped, we have had the so-called ''Belarusian'' or ''Serbian'' apples. In fact, it's the same Polish apples, they just had the fifth ''calibre'', here it has become third, and the price has doubled. Only the logistic scheme has changed, while the commodity has become more expensive and got worse quality.

Important substitution arises when you substitute technologies, not products, you know, this is the main difference. But the substitution of technologies is a lasting and dull process. Substitution of a product is rubbish, in this case, we've got nothing. Yes, we fully provide ourselves with allegedly our own pork, but it's 25% more expensive than pork from same Poland because equipment, slaughter, maintenance, shots are also associated with imports, while the pedigree stock is Holland, Polish, German – we see the same assembly of the product.

And when you hear that our chicken became Russian a long time ago?

One should smile broadly like Gagarin in answer to it! In answer to ''reports on successes'', we should ask what's the share of import of fodder, equipment of complexes, software, the same shots. Imagine that if someone else in Europe takes offence at us, stops supplying spare parts to equip factory farming, software or antibiotics? Everything will go back to normal – we will see we substituted chicken as a product, but we didn't substitute its production technology.

Generally speaking, are we very dependent on products and technologies of Europe and the USA?

We depend on them almost in everything. Now it's said about an isolated, sovereign Internet. But this is impossible! It's said in Russia like ''we will supply servers for the sovereign Internet''. Do it, for God's sake. But who will make the servers?

Probably China?

It's not clear that China will constantly be our friend. And if it is, it will ''destroy'' Irkutsk Oblast, Khabarovsk Krai with its influence. And where is our independence here?

''It's more profitable for our authorities to have landfills. This is why they will go on breeding not littered France but littered Australia on the territory of our country,'' Photo: Maksim Platonov

''Our authorities can't solve the waste disposal problem because this doesn't have a political benefit''

The waste disposal problem is one of the discussed themes. Are waste incineration plants a serious solution to it?

France has been physically ''buried'' on the territory of Russia. In other words, our landfills can cover this not small European country. Our landfills, in fact, have been created for 100 years, that's to say, since the existence of post-tsarist Russia. An ideal society should start with recycling food wastes and segregating solid wastes into at least three-four types and send to collection and recycling points, then a waste sorting or waste incineration plant appears for them.

It's more profitable for our authorities to have landfills. This is why they will go on breeding not littered France but littered Australia on the territory of our country. Our authorities can't solve the waste disposal problem because this doesn't have a political benefit – their lifespan is short, while we should have been solving the problem created for 100 years for 200 years. Why do we need it?

What can be expected from the future waste incineration plant outside the same Kazan?

If there isn't a normal sorting system supporting this factory, it will have all the emissions because it will receive waste it shouldn't bury. Authorities will make such a plant work, though the ''blasted bourgeois'' can have an operating waste incineration plant even in the city centre, moreover, skiing slopes are created next to it.

Can this situation be changed?

For this purpose, the country's president should show he has started to sort waste out. Is he ready to do it? Here there must be not just state politics, not a national project, it must be a normal life. Now I don't see the president focus on this problem – it doesn't exist for him. There is a problem of bombs for him, indeed.

Have presidents in Europe shown with their example how to get rid of waste correctly?

Society is managed in a different way there. Our society is authoritarian, that loves the tsar but doesn't elect the president. When our society sees the day in order to really choose a president, then the deadlock over waste disposal problem will be broken.

By Sergey Kochnev
Analytics