Boris Titov: policy Kudrin, we will fall into the list of third-world economies

Boris Titov: policy Kudrin, we will fall into the list of third-world economies

Moscow. August 18. The Stolypin club, the business Ombudsman, the leader of the “Party of growth” Boris Titov has developed the concept of economic development “growth Strategy”, the document will be presented to the President by the end of the year. About “growth Strategies”, an alternative program developed by the Center for strategic research,” Kudrin, methods of stimulating business and priority measures for overcoming the crisis Titov said in an interview.

Alexey Kudrin named economic development “growth Strategy” a political project. Is it really so?

– I read an interview with Alexei Kudrin, it is said that the project is political in the sense that I set it as the program of his party, because participate in the elections. Alexei Kudrin said that the draft – political content, he said that I put him at the mercy of our success as a party.

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I certify that this is a political project, but not from what I head the party. Because the project is important for the whole country, it is really political. But another issue is that we use all possible ways to move the program forward to gain public support. Kudrin about your project actually does not say anything, and, so to call it political or non-political is impossible. Because it is not clear what he wants. The only thing we know about the position of Kudrin: it offers a “stand” and not to develop, because for him the main guidelines for inflation of 4% and the budget deficit – not more than 1% of GDP. We understand that this financial “squeeze” is not moving forward, it is a continuation of the old economic policy. He says that the most important is macroeconomic stability, inflation plus budget and reforms, the implementation of which is, in our opinion, for a long time.

Is equal stagnation?

– It’s not even stagnation, and degradation of the country. We now have stagnation, which lasts for six consecutive quarters, and negative growth. Here if we do not make major economic decisions, the standard of living in the country we find ourselves in the middle of 90-ies. Currently, in dollar terms GDP per capita – our country corresponds to the 60-70-th years, which is equal to the level of development of the Congo.

– In this case, offers a “growth Strategy”?

Is a comprehensive integrated program, which has 10 main areas. The main point of the entire strategy: benchmark not the stability of the economy and its growth. That is, the active economic policy of the state that will focus on the growth of GDP. Today we look at what it takes. For example, in the United States is doing with quantitative easing, which was adopted during the crisis of 2008-2009. They take active steps to break out of the crisis, in particular, provide a cash infusion into the economy. Same thing after a long hiatus the EU does. They had also their “Kudrin” were economists Milton Friedman and Friedrich Hayek. But it was pre-crisis economy, when all the rapidly growing, rapidly developed, and the market was a lot of competition. In such circumstances, the state had to conduct tough policy of the state to hold and prevent imbalance. In crisis, everyone realized that the old policy is not working. In the United States had such a serious discussion: keep the old, tight fiscal policy, to tighten their belts and wait for the recession to end, or try to escape from him, holding the easing of financial policy, giving the business to grow by lowering taxes – that is, to do everything possible to the business withdrew the country out of crisis. In all the countries won by those who adhered to the policy easing. We offer the same option.
In our program in the first place, monetary policy. We offer to spend $30 billion on long-term loans to the flywheel of the economy has not stopped, continued to move, and we’d be out of the crisis. No economy without credit cannot develop. Today very high interest rates on loans and no way to attract “long” money.

– In your opinion, what needs to be done in the first place?

We believe that there should be lowered taxes, at least for new facilities. It stimulates the inflow of investments. The tax base will grow due to the emergence of new enterprises.

Also tax incentives for business. For example, if the enterprise buys new tech equipment, then 25% of the cost of this equipment can be deducted from the payable enterprise taxes. Or, the company creates high-tech jobs and pays reduced social tax not 30%, and 14%.

You also need all the taxes brought into line with international standards, when the taxes of the enterprise on production and taxes on natural resource rents is higher.

– What other priority measures should be?

– First, you need to separate the current situation from the management of the development. For this you need to create a headquarters that would be involved in the only formulation of economic policy. Should work group focused on the development of specialists, who would not have a headache about “patching holes”.

Secondly, it is necessary to systematically reduce the interest rate. You can enter zero currency position that banks have not exploited the market. I’m talking about the presence of private money in Bank accounts, not currency for customers. That is, banks could not buy foreign currency for their own needs. This was not done in a period of crisis, now is not applied.

– Growth strategy ready?

– She finished in the form of the concept.

– That is written? And where will be presented the final version?

– The President instructed us to move from concept to strategy. Its program we must submit to the economic Council under the President in December.

– That is, your “growth Strategy” will form the basis of the economic programme of Vladimir Putin, if he will participate in presidential elections in 2018?

Yes. He instructed to develop a program Kudrin and us.

– By the way, Kudrin considers, it is necessary to increase by 1 percentage point of GDP in the next 3-4 years and the cost of 3 areas: education, health and infrastructure.

But, he writes, where to get the money. Where the money for the same education? It’s all expensive mechanisms. How to make money to create jobs? I can say that over the past three years to 6.3 million jobs fewer. Tell the speaker what to do to not stop the enterprise? Now here I go, including on the southern Urals, and all say that businesses are that this crisis is the most difficult, even compared with 2008-2009. When the Central Bank in December 2014 raised to 17% key rate, with his own hands had dug a huge pit for the Russian business. On the one hand, falling demand, other costs are rising. This all will continue. Where the decision, Kudrin? He first talked about five years, which are necessary for the preparation of the strategy, and then the period from the end of 2016 and beginning of 2017. But for this time, we will die.

– How much, in percentage terms, decreased consumer demand?

– When I travel around the country and discuss the consumer market, everyone is talking about reduction in demand, at least 20% to 30% this year. And heavy consequences yet to come if the demand does not increase, many will be ruined. The process has already begun, but the precipitous character he can acquire very soon.

– You are talking about the year 2017?

– If the oil is not “bounces”, then the collapse could happen before the end of this year.

– You visited Magnitogorsk, and Zlatoust, where he met with entrepreneurs. What they mainly complain, if the officials continue to “nightmare” business?

– Today there are the old problems with the regulation of business and government officials, and at the same time in first place out of economic problems. Particularly acute is what we saw in Zlatoust, from where leaves a huge number of people because of difficulties in industry. There is no effective authority. We also saw that the management of Magnitogorsk is not aimed at business development. In the city there is an acute problem in transportation, utilities and trade where practically there is a “squeezing” of small business. Seeing the same problem in Zlatoust, we invited the cities to the status of territories of priority socio-economic development.

I believe that we need new economic policy. Our business always went as a residual, the chief of the state has always been oil. But today we need an economy that would be based on domestic industrial production, agriculture, development of small and medium-sized businesses. This requires a clear and precise measures.

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The question “kashmiriana the business-as-was, and still is. It is surprising that this is happening at a time of crisis. The power of “drowns” the business, instead of to help and to save jobs. For example, the Ministry of internal Affairs has begun check of legality of obtaining small business grants and subsidies, a huge number of inspections conducted by the tax authorities.

In a crisis we need to provide installments for the debts and to provide the terms of restructuring. And we have the opposite, “stifle” in full – open criminal cases against businessmen.

– But isn’t that what violations need to close your eyes?

The government in such a situation should help the business because he was in a difficult position because of the policies of the government. Today on the first agenda should be the issue of demand, which is currently falling in the market, and issues related to taxes, costs and interest rates on loans.

I, Vladimir Putin has presented a report where there are, including sociology, business studies. So, in first place among all issues entrepreneurs raised the unpredictability of the economic situation. That’s what business needs: show him whether to decrease taxes or to grow? Future development of the internal market or external? We live at the expense of low wages or high? Tell me, what policies will the state? Businesses need certainty and the government is no certainty does not. But Kudrin this issue “halts”. In fact, the policy pursued is a policy of Kudrin, which he created in the early 2000-ies. The fact that he is gone, that doesn’t mean it’s not coordinated. Of course, there is the financial unit, the Central Bank, but that’s his policy. Thus, we fall into the list of third world economies.

– What about discussions about raising the retirement age?

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– This “trick” Kudrin, because the whole country is against raising the retirement age. I think that this is overrated because it is not key for systematic development of the economy. You need a stable cohesive society in order to reform the economy. Therefore, it is better (raising the retirement age) to migrate.

The logic is clear: currently in the country there is an increase in life expectancy. However, if kudrinskoe decision is made, we will become the only country in the world where the male population during the transition to retirement immediately go to the cemetery. The amount that we save, are not basic to the economic development of the country – about 400 billion rubles, plus the event is very much stretched for time.

– But you said – “move”. I believe that to raise the retirement age still need?

Yes. But I emphasise that if increase, then it should be done later, when the economy stabiliziruemost. Generally, worldwide, the decision to raise the retirement age. In Russia it can be done provided that the increase in life expectancy of the population. If there is a well-developed economy, then, of course, and medicine is at a high level, which in turn affects life expectancy.

– In your opinion, what is the situation in Russian education?

– Deplorable. To date, the catastrophic gap between labour market and education. Discovered a huge number of universities that offer no knowledge, but only diplomas. And what University to teach, if he has a solid public funding? No need to allocate a specific University. Today we have to put the education system, at least secondary, dependent on number of students. You must tell the University that if he gets a thousand students, will receive, for example, 1 billion, if 2 thousands 2 billion. Is the focus on the end result.

– What do you think about the postponement of privatization of “Bashneft”?

– “Bashneft” now to privatize it is not necessary. It was the government’s attempt to quickly find funds to plug holes in the budget. However, due to the fall in oil prices “Bashneft” now is much cheaper than it cost a year ago. We live under sanctions, so now comes the real investor with big money. It seems to me that “before death will not inhale”, and the money that will be received from privatization, will not solve the problem of the Russian budget. The deal had to migrate to more prosperous times, that is, sell high, and not go by the principle “just to sell”.

Yes, now the budget deficit, but nothing wrong with that. It is necessary to develop economic policies that will allow to earn in the non-oil sector. We need to develop a credit policy. All live in debt. In many countries take a loan, the business is growing, then the money is returned. Our old paradigm says that all the Finance you need to keep firmly, that in no case do not need to borrow that the most important is the fight against inflation. But in the crisis after the fall in oil prices have another way to conduct economic policy.