‘I am afraid there will be a lot of problems of making this message a reality’

Whom Putin’s message was addressed to in fact and why it mostly looks like a list of hollow promises

‘I am afraid there will be a lot of problems of making this message a reality’
Photo: kremlin.ru

Experts evaluate the Russian president’s address to the Federal Assembly that took place last week differently. On the one hand, it included a promise to support families with children and big infrastructural ambitions. On the other hand, we didn’t hear anything specific about many issues (for instance, about the environment). Thirdly, though businesses received lower insurance premiums on a regular basis, they didn’t hear anything optimistic. Realnoe Vremya has talked with Yevgeny Nadorshin, an economist, employee of Higher School of Economics National Research University, ex-adviser to the Russian minister of economic development, about economic aspects of the president’s message.

“It is very important for the authorities to garner support in the elections”

Mr Nadorshin, some experts named Putin’s message “greedy”. They say only mothers were supported financially, which is strange, especially while citizens in Western countries are receiving decent support. Why did the authorities focus on children and mothers only?

Hard to say. Perhaps, costs on the population’s support aren’t the key task on the agenda now. Perhaps, tasks of foreign politics prevail on the agenda. But the support for families with children (both nuclear and single-parent families) in the country combating poverty is a right and reasonable step: the authorities anyway had been ignoring this problem for years, but last year they did the correct step and continued doing it this year. This is good in general, it is a pity that families aren’t given much money.

Unfortunately, these measures can also be considered as an attempt of the authorities of currying favour with voters because money for schoolchildren is the loudest social measure this year. And it doesn’t matter how much a family needs it — the money will anyway be given in August too, shortly before the elections. It rather looks like an attempt of garnering support in the elections.

Does it mean it would be logical to support, for instance, students and pensioners at the same time?

Why don’t the authorities provide the general public with social support? The case is that uneasy relations between Russia and the West, particularly the USA, are expected this year, in 2021 and further. Democrats chaired by Biden, unlike Trump, seem to be going to pursue quite a consecutive policy towards Russia. Though Biden’s first anti-Russian sanctions turned out to be softer than the market had expected, they were very serious. The scale of Trump’s administration was smaller. Unfortunately, Americans have the foundation to tighten sanctions on Russia, and our authorities in the expectation of this aren’t ready to spend money on other social goals. I think the main task in our economic policy in general in the short term is to get a balanced budget. Of course, such a task had been set previously too, but this year its importance has notably increased. I think key additional resources, including additional incomes from those sectors that were given a respite to pay taxes and duties last year will be spent to perform this task.

The message in general was noted by the majority not as “greedy” but soft — it is motivated by the elections, hence the attempt of cajoling voters. Also, alleged care about the well-being was discernible. For instance, the president talked about ecology. Moreover, there weren’t offered any mechanisms to improve in this area, which is strange in general.

Why is it strange?

Ecology has been on Putin’s agenda for long, Russia has been in the Paris Climate Agreement for long, some documents are discussed every year. But in the president’s message on 21 April, we got completely raw statements about ecology. He said it is necessary to reduce emissions into the atmosphere by 20% in the largest industrial centres in 2024. It wasn’t specified what industrial centres he talked about and what emissions should reduce.

I remember the environmental programme Putin included in his May decrees in 2018. And so many years later, we still have only general statements that contain neither mechanisms, resources nor specific goals of the environmental agenda.

It turns out that we saw only a declaration in the agenda’s environmental issues.

The message can have a declaration but on new topics. Let’s say, if there is an occurrence the economy has faced for the first time, the president can set only a certain vector in the planning. But I am sorry, if you should have been developing and implementing the same environmental programme for three years already while you accepted restrictions within the international accord five years ago, you can’t forget this all and suddenly start with the declaration and hope it will be highly evaluated...

The environmental part of the message was likely addressed to the West first of all, not you and me. Not the expression of methods but declarations suit a world climate summit. By the way, the compliance with the international agenda explains the softness of the whole message.

“The main filling of the message can be described in Russian this way: ‘Pigs might fly...’”

Nevertheless, 1,5 trillion rubles are promised to be spent “inside” — to develop Russian science. Though it wasn’t specified again what the money will be spent on. Although the Federation Council says that this money will particularly be spent on medical research, we would like to hear something specific from Putin. How to assess such a number for science?

Firstly, the president may not go into details in some issues. Secondly, it doesn’t mean the money will be spent on absolutely new areas in science. It is just the total amount of public and private resources that are used for science, and it isn’t news. We have the Russian Academy of Sciences with its staff and areas, and this is just the next expenditure on science the Russian Academy of Sciences and many other scientific organisations in the country deal with.

Can the mention of science be a reply to the criticism that scientists leave the country because of paltry wages?

I think the thing is that science is considered a topical issue today, and it would be suitable to mention it in the message. Education or health care or culture when money was given to build culture centres and libraries were mentioned in the same breath.

Here we are talking about such a concept as human capital: how able-bodied, smart and productive we are. This concept characterises the state’s ability to get high productivity numbers from its population for the economy. While these numbers come from our ability to use some basic things.

Look here (hypothetically): you have a pen, and a Frenchman has a pen, you have a computer, and the Frenchman has a computer. With these things, we communicate better and produce better than the Frenchman. Science gives us the opportunity to become more productive, it opens new ways. Health care ensures our readiness to work, it keeps us healthy. Culture gives us a high moral spirit. So human capital accumulates this way, to put it simple. Besides, it was said about science in the context of Russia’s aspiration to become a leading country promoting innovations.

While the main objective of the message was image-related given that a meeting with Biden awaits Putin. The main filling of the message can be described in Russian this way: “Pigs might fly...” While the president didn’t offer resources and specific methods, and I have already mentioned it. We’ve seen all the agenda Putin voiced on 21 April for long. News is just a background of the message. But this backgrounds matters for the external image the most now.

“The idea of the Moscow-Kazan highway with the prolongation of the road to Yekaterinburg is a good idea”

Are the infrastructural ideas — to prolong the highway from Moscow to Kazan till the Urals, build the metro somewhere, railways in Yamal — also expressed for the sake of image?

Here the story is different. The better connection on the territory of Russia and its regional centres has already been a sore point for long. It contains two moments. The first one is objective: it is linked with a lack of investment in infrastructure because of which the country has few quality roads, especially outside big regional centres. Yes, Moscow and Kazan have quite a good road coverage in their closest neighbourhoods. But the same highway from Moscow to Kazan leaves a lot to be desired. So a plane is considered a normal way to travel from the capital to you. This is why the idea of the Moscow-Kazan highway with the prolongation of the road to Yekaterinburg is a good idea.

Secondly, regions need development, and the highway will allow the same Kazan to get another element for this. I think that other regions will build normal roads leading to this highway and a lot of people who would like to live and work in Kazan will be able to get there. Because low employment is a hot-button issue for many big cities of the country. There is a deficit of workforce in growth points (for instance, in Kazan). In a word, the highway from Moscow via Kazan to Yekaterinburg is not bad.

Another thing is what other regions were offered to develop the same metro and other transport infrastructure. Only loans. I don’t argue that a loan at 3% until 2029 is not bad. But this money must be repaid, and there is a question: what roads should the regions build to pay the 3% back together with the main amount of the loan? Does it mean that only toll roads should be built everywhere?

I don’t understand this moment. On the one hand, it was offered to develop regions. On the other hand, the resource offered by the government for this is for some reason not free though inexpensive. I think such an approach won’t be very popular from the regions. Also, regions have other problems, they don’t care about infrastructure development. Note that President Putin offered the regions loan restructuring to repay the debts. It is said: “Let’s replace commercial loans with budget loans”. Yes, of course, these loans will become cheaper, but it won’t dramatically solve the problem of the regions’ incomes and debts. Many haven’t been in the mood for development projects for long, and the replacement of some loans with others will change nothing for them.

“I personally don’t believe that the loans will change something in the regions

Ex-Economy Minister of Russia Andrey Nechayev told our newspaper in an interview that now regions need, first of all, to have tax payments redistributed. Do you agree with it?

I would formulate this softer. Regions need to find new income sources. Perhaps, they can be found not only in new taxes but also in them. By the way, Putin said something about the region’s bigger autonomy in his message. But I don’t think that this sudden phrase means something.

Regions really need more opportunities of their own they could turn into their resources, not loan restructuring, not new longer loans. They should be provided with more power. While I think the offers of loans made by the president won’t become a reality. It is the same declaration. I personally don’t believe that the loans will change something in the regions, moreover, such a modest amount (500 billion rubles for the whole country for three years).

Last year was especially tough for small and medium-sized businesses. Amid the unhappy situation, entrepreneurs got only a decision to leave the rate of insurance premiums, which was lowered last year. Is this “greediness” again?

It is already good that the rate of insurance premiums stayed at 15% for SMEs. When you earlier talked about tax initiatives, I was strained a bit, and here’s why. When taking office again in 2018, the president promised that he wouldn’t touch taxes. But this promise was forgotten. Some natural persons’ taxes have already increased. This decision will probably be beneficial, but the authorities anyway didn’t keep the promise. In this message, Putin, in fact, threatened all businesses. He said that the biggest profit was expected in the economy soon, and we will see how businessmen will use it. And then they would increase the taxes. Don’t you think it is rather a threat?

“It is impossible to have a good quality of life without combating corruption and lawlessness of security workers”

Can we say in general that Putin reasonably responded to public moods? Or didn’t consider only a small part of them? Because nothing was said about pensions, nothing was said about salaries...

Hard to say. The words in the message were beautiful, and they are within the context of wishes of many citizens of the country. This could strike a chord with many. But the question is different: what generated precisely this kind of message? I have already told you about the foreign context and elections. Unfortunately, a big part of the authorities and personally the president’s promises haven’t been kept until recently was nothing but a declaration.

Has anything completely changed in the actions of security agencies? Has the number of complaints about their activity decreased? I think that they have started to violate law more. I am not a lawyer. But looking at their actions towards some organisations, I start to ask myself: is this legal or not? And I have to admit that the measures against both Navalny and other people — the same human rights advocates — law enforcement agencies took simply cannot be applied according to Russian laws.

The same businesses haven’t stopped complaining about the misuse of power, complications and problems with law enforcement agencies. Of course, businesses’ complaints aren’t heard as much as what happens in public life or politics. And did Putin note these problems in his message? He didn’t. Earlier, he had tried to somehow criticise supervisory and law enforcement agencies, while nothing similar was said this time. Can we hope for a better quality of life, a more attractive environment for investment if we don’t provide a worthy and independent court, if we don’t provide normal work of law enforcement agencies? No, I am afraid. Because any owner investing money on the territory of the country will feel unprotected. As a result, he will refuse to invest, consequently, there won’t be conditions for workers’ income to grow.

Unfortunately, practice shows that it is impossible to have a good quality of life, strong science, strong business, a favourable environment without combating corruption and lawlessness. There is no such a country in the world, I think.

This is why I am afraid that after trying to paint a glittering image of the country for citizens, the president only wished this. There won’t be any actions, while this message will fit only to get additional votes of voters and foreign consumers.

It isn’t hard for the authorities to know people’s thoughts. Surveys were conducted, they found out what people wanted... Another thing is that these requests have been old for long, and they should have been addressed constructively for long. I am afraid that there will be a lot of problems of making this message a reality because the Kremlin doesn’t understand how to come to a normal state of economic and social life. And there is no understanding, all the values that this message had will simply disappear.

Interviewed by Sergey Kochnev. Photo: kremlin.ru