This text is translated into Russian by google automatic human level neural machine.
EastRussia is not responsible for any mistakes in the translated text. Sorry for the inconvinience.
Please refer to the text in Russian as a source.
"No economist or expert can be smarter than the market"
Oleg Grigoriev on the prospects of development of Russia and its Far East
State Councilor of the first class, scientific director of the "Scientific and Research Center" Neo-Economics "Oleg Grigoryev told in an interview with EastRussia why we imitate the savages, wait for other people's planes and are unable to face the reality.
- While we are not moving anywhere. Our economy is in its rightful (or, as usual, slightly illegal) place. Since we do not follow all the established rules, we live somewhat better than we could. But this does not change the overall picture.
It is necessary to understand a few things. And above all - do not deceive ourselves by reasoning that we are a "developed country that has delayed a little with the transition to a post-industrial society" and therefore lags behind other developed countries. But when we finally make a jerk, we will all be happy ... This thesis is pleasant to the officials' hearing and is actively used in the reports to the leadership - but no more.
In fact, we are a developing country. Yes, with its rich and challenging history of ups and downs. But for many developing countries, the story is no less dramatic. For example, in Argentina, which in the 20s of the last century was officially considered one of the most developed countries in the world, but then hopelessly lagged behind. We spent much more effort than Argentina on reaching the “final”, all of these great things are remembered, but the fact is a fact: today we have lost our positions in many ways.
- And now what i can do? This, in your opinion, forever?
- Nothing wrong. You just need to understand your chances and opportunities as a developing country. For such states there are three basic models of existence in the modern world. The first is monocultural. This is how the Russian Empire developed at the end of the 19th - early 20th centuries. We acted as a classic “banana republic”, except bananas do not ripen in our climate, and we supplied grain to the world market. Oil, too, just for it at that time received little money, although they were the largest exporters in the world. The essence is the same - export is based on a limited type of production, as a rule - it is raw materials or food.
The second model is investment. Like the first, it keeps at the expense of low labor costs. A classic example is China, when peasants (of whom there are many, with little land) are put to the machine, they still pay a penny, but labor productivity is growing sharply. This is the basis of the “Chinese miracle”. In general, whenever we are confronted with a phenomenon that is commonly called an economic miracle, it is always a matter of a country embarking on the path of investment development. Since 2005, wages in China began to grow quite rapidly, placing production in the Middle Kingdom has become much less profitable, and now the economy of Vietnam, Indonesia, Myanmar and Bangladesh is developing according to the investment model. World investors invest their capital there, build factories, and the impoverished population works on them. So many workers do not need much, the cost of production is minimal.
The third option is a monoculture-rent economy. Just what we are now witnessing in Russia. In this regard, we are comparable, for example, with African Gabon, since we also have oil and gas, and in terms of per capita income in the world ranking we occupy the neighboring lines. True, they have much less inhabitants ...
"But Gabon does not exactly deliver weapons to the world market, are we ahead?"
"Weapons are an inheritance of our history." We took our positions in Soviet times, when the market for weapons and military equipment was bipolar. Now the poles are more "one and a half": we are gradually losing markets. The real effectiveness of such supplies is quite low. At least, incomparable with oil revenues. Revenues from the exports of defense products - 1% of our GDP, and the figure speaks for itself.
- There are other figures, which were quoted in official documents. For example, the fact that in today's budget of the Russian Federation the share of revenues from commodity exports has decreased significantly and is now only 41%. That is, from raw materials rent, we gradually move towards more technological productions. Is not it?
- Figures are good at cunning. Here, for example, the same oil. In this industry, a lot of people work - from drillers to the top-copper "Rosneft" or "LUKOIL". They, naturally, need to buy something in their country and there is something - so at least the bakery for bread should be nearby. And the baker is sure that he does not depend on oil in any way. But if there were no oilmen with their money and constant demand, there would not be his bakery. Everyone needs some goods or services, but you do not have to admit that the bread shop or cafe is working and paying taxes "on their own". They are built into the common chain. And as soon as the price of oil falls, and with it the wages of customers, the cafe empties and goes bankrupt. This is the simplest example of interdependence, in fact, of course, everything is much more complicated. But the essence is the same. Such things have to be taken into account, then not to be surprised - why something "suddenly" collapsed, "there was never and ever again." In addition, do not rejoice in too fast strengthening of the ruble.
- Why? How can this be bad?
- I will explain. Let's say we export oil, the price for it grows, the ruble strengthens, it becomes profitable to credit us, and foreign capital goes to Russia. This is a well-known carry-trade system: borrow money where the percentage is low and take it to a country where the percentage is high. Compare: the Fed discount rate is 1%, at the European Bank it is generally negative. And here we can earn up to 8% per year, if the ruble strengthens, then for dollar deposits up to 12%. The Americans are buying our federal loan bonds (OFZ) - and as long as the US Senate has not banned this operation, they earn very good money on such deposits. However, in developing countries there are always high bank interest rates, but inevitably there is a threat of currency devaluation. Kerry trade is always a bubble that cannot live forever. Therefore, the strengthening of the ruble is dangerous for a developing economy, such as ours. If outside investors suddenly 200 billions flowed in, this in itself is oppressing domestic production. And when suddenly capital begins to "go" back - the economy simply collapses. Therefore, for our authorities at the beginning of this year, the main task was to prevent excessive ruble appreciation. Behind him comes a lot of speculative capital, mainly loans from abroad. And as soon as the pendulum swings back, the situation can become very alarming.
- We will take into account the possibility of terrible remote forecasts, but let's still return to reality. With the crisis 2014-th already passed three years. What awaits us in the near future?
- For now everything will remain more or less well, and no one argues with the head of the Ministry of Economic Development Maxim Oreshkin. The economy after a series of shocks was balanced, and we, apparently, are waiting for a decade of stagnation. At least six months, the oil will remain at a decent price level - 60 dollars per barrel and a little more, and therefore next year is likely to be better than this year. Positive and negative factors will add up to zero. The budget is shrinking, although it is investments from the treasury that support GDP growth, but the price of oil is growing ... and so on.
- Is it possible for Russia, in principle, the very "breakthrough", about which there is so much talk and dream more?
“Unfortunately, for our economy, by its type, still“ rental ”, the path to the transition to the investment model of development that provides such jerks is closed. We have too high the cost of labor, too strong currency due to the receipt of excessive income from the inflow of speculative capital from abroad, and the budget policy does not contribute to this. To provide the country with rapid economic growth, as in China itself, it would be theoretically necessary to drastically reduce wages to a certain acceptable level. But to what - it is not clear. Moreover, there are many other developing countries in the world who are ready to accept any investments. Actually, this is what happened in the 70s, when large corporations began to transfer production to Asia or Africa on a massive scale. Even Russia could move by investment as far back as the 20s of the last century. Now I can’t even imagine to what level she would have to be impoverished for such a transition to other rails - even for the sake of economic success in the distant future. Naturally, no one will do this.
- And how, in this case, will it be possible to develop, for example, the Far East solely through investments? If you remember, this has been talked about for a long time, the discussion was only about the size of capital investments and methods of attracting them (ex-plenipotentiary Viktor Ishayev in his program proposed to allocate 2-2,5 trillion rubles of public investment, Yuri Trutnev - by creating external investments, provided that investors preferential regimes, the establishment of TOR and the Free Port of Vladivostok).
- In fact, our conversation started from this. Investments - this is, if you will, a scientific chimera. Any economist will say that "growth is related to investment." But you always need to have a complete picture. Investments will come if there is a developed infrastructure on this territory. For example, a port to carry raw materials and materials, an assembly plant, electricity, road and so on. This is indeed so. But even if you invest in infrastructure construction, investments can not go to you if you have expensive labor. In rental economy, of course, also has its own flow of investment, it's just different. It is no coincidence that the inflow of capital to us was felt in the 2000-ies. And already then it was accepted to say that we gradually cease to depend on oil and gas. Although it was, to put it mildly, not so.
Most investors are determined to come to our country and set up an export production for foreign markets. But in Western economic science there is what is called the "home market effect". Also I will explain with a simple example. At the beginning of 90, we began importing imported juices in cardboard bags instead of the usual 3 liter cans. I somehow saw with my own eyes in the warehouse how these packages are loaded to customs clearance. In fact, we then "took the water" instead of importing the concentrate and on its own, fairly simple production to bring it to the desired condition. And the poor were there, and there were few consumers. And then people began to live better, the market expanded, there were own manufactures from imported materials or raw materials. In addition to the aforementioned juice, we import cars or household appliances from imported components, we produce medicines, that is, we attract foreign raw materials or spare parts for the production of products that the domestic market needs. But the trouble is that the whole reserve of such investments in the domestic market has already been practically dug out in zero years.
However, the effect of the internal market is not enough to ensure development on the basis of the internal market. There is such a thing: the trap of average income. This is a situation where the incomes of the population are already high enough for the country to start losing competitiveness on foreign markets, and are still insufficient for the domestic market to become a motor for development. And there is a pattern: the later the country begins investment interaction, the lower the income level at which the average income trap occurs. Say, Germany and Japan started right after the Second World War, and today they are stuck at the level of 75% of GDP per capita of the US level (even slightly lower in consumption). South Korea and Taiwan, embarked on this path in the 60s, have long been unable to tear themselves away from the level in 50% (the very notion of a trap of average income, as far as I know, appeared precisely in relation to South Korea). Today, many economists say that China, which turned to investment cooperation a decade later, is trapped in the middle income. At the same time, per capita GDP did not even reach 20% of the American level.
So all the calculations that China suddenly becomes the leader of the world economy, do not have any basis. There, on the contrary, it is more likely to expect new shocks for the world economy: there is a rapid growth of debts, while the effectiveness of lending is rapidly falling, which is fraught with a serious crisis.
So, according to the nature of the model of its development, Russia is initially trapped in the middle income. Only here, this "average income" fluctuates depending on the dynamics of oil prices.
When we talk about the possibility of development, we should always keep in mind that today in the world there is no problem to produce something. The problem produced is to sell. The crisis of overproduction is not empty words, the main problem is that everywhere in the world and capacities are lacking, and technological problems are solved, and logistics are established, but demand is not growing as quickly as production. Plus, of course, other problems - for example, pressure on small and medium-sized manufacturers by large network companies. Such a ball in one fell swoop can not be cut. In a separate region - even more so.
- If, as you say, China is about to risk becoming a zone of colossal instability, then we, developing our Far East in the immediate vicinity of the pool, are at risk of being pulled there? Especially since this region is very uncrowded. Or do you think that in the east of the country it is necessary to more actively create urban agglomerations as “outposts” of the economy - like, for example, Kazakhstan plans with its idea of creating million-plus cities?
- China is not so scary for us - just do not rely too much on it as a possible partner. As for the big cities - yes, it really is a way out. One of the opportunities for development is a change in the system of settling people. Sometimes it is really worth listening to orthodox economics: a technological breakthrough is made when former peasants get to the machines. That is, from the rural model it is necessary to move to urban civilization. The difference in labor productivity between a peasant and an industrial worker is enormous, in dozens of times. Therefore, even agriculture is now moving to qualitatively different technological rails. Naturally, this also dictates new approaches to the development of cities. As shown by experts' calculations, if the country is trying to make a "jerk", it is possible only with a few megacities in the form of growth points. And the city of three million is much more stable and independent than a millionaire. Eight- and twelve million, naturally, in a more advantageous position, but this is unrealistic for us. If we create a three million city in our Far East, it will give the region a powerful impetus to development.
In this sense, the idea of "Far Eastern hectares" seems to me unviable. In my opinion, this is some kind of nonsense. Hektar, or two, or even twenty together, will not give much, except for bravura reports on executed orders of the authorities. This reminds me very much of the call to create "ancestral estates" in an unfortunate and hungry province, which at the beginning of the zero years was put forward by some ultra-patriotic organization, something like "Cedars of Russia". Even in the Central region, near Smolensk, Rostov, Belgorod or Samara, such things are unprofitable and impracticable. Especially in the Far East. The bet can only be made for large cities and agglomerations.
Naturally, at the initial stage, large state investments will be required. In the same, for example, social infrastructure, so that people have an incentive to move to such a city, to simple rental housing and “furnished rooms” for visitors, to sewage treatment plants and power grids ... But then the commercial project itself begins to work. To feed such a city, agriculture is needed, and it is “pulled up” to it. New jobs, manufacturing, the construction sector, furniture factories, power engineering and much more - all this is concentrated around the 3-millionth, which is becoming a very promising sales market and production center at the same time.
We have so far considered such projects solely in theory, without specific calculations and links to the locality. Kazakhstan went a little further - the president of the republic put forward the idea of four large cities as the basis for future economic growth. Using the example of Aktobe, it became clear that there are quite a few pitfalls in such projects. But this is no reason to bury the idea in the bud.
"But the state has an iron argument against such projects:" There is no money. "
- The state has money. Just do not smear them like semolina on the table, citing famous characters. To create such cities it will be necessary to concentrate investments, "taking away" funds from inefficient programs. This requires political will. And such a solution must be comprehensively prepared economically, socially, and so on - in all aspects. No less important is the ideological content - the country will need to explain what is being done and for what.
There is, of course, an option-light, which is now spoken about a lot, - the creation of industry clusters. Although the big city is also a kind of “cluster” of general orientation, capable of attracting money, business, and everything else that is needed. In any case, the cluster must demonstrate a higher efficiency than the environment that surrounds it. We see examples, for example, in Korea, where the shipbuilding cluster was created. Before that, something similar was observed in Greece. By the way, few people remember that at one time there was such a phenomenon as the "Greek miracle." And then, as it should be, the trap of average income, debt growth, and we all heard what is happening with Greece today. The meat and dairy cluster in Denmark was formed in the 19th century; now the Danes are leaders in the production of not only meat, but also equipment for the meat and dairy industry, veterinary products, vaccines, feed additives, and biochemistry. The experience of China is interesting, where a powerful impetus to the development of electroplating industries was given after the construction of huge sewage treatment plants, without which such enterprises cannot work (they use a lot of alkalis, acids and other chemicals and are generally very "dirty"). In our country it turned out to be economically unprofitable, our electroplating gradually dies. China has attracted about 40 thousands of electroplating enterprises to its cluster where sewage treatment plants operate. Foreign partners keep their laboratories there too.
We do not have such vivid examples. Is it possible to recall a titanium cluster based on enterprises of Soviet times on the deposits of this metal. The largest enterprise in it is VSMPO-Avisma, which makes accessories for Boeing. But in any case, creating clusters does not mean mechanically "putting everyone in one place." The first and main task is to put the business in such a way that the efficiency of production is higher than the world average, otherwise the idea of the cluster will lose its meaning. A country can afford several clusters, since millions of people will work there. It will have to be geographically dispersed, since it will not only need enterprises, but also research institutes and other research and production structures.
- Are there any distinct state programs on this account?
- For today, alas, no. Although this is not the first year and not the first decade. By the way, your humble servant was the first to write this word in the state document. In 2004, I headed an expert group to prepare a program for the development of the military-industrial complex for 2006-10, and we introduced this notion in it (I had to explain in the Ministry of Finance, the Ministry of Economic Development and other agencies for a long time what to quote Michael Porter's 1989 year of publication, which we had translated into 1994 year ...). But now I almost hate myself then. Especially when people accuse me of “not realizing how useful clusters can be.” Of course they can. If it is not profanation and not fiction.
- The administration of Kamchatka proclaimed its program for the development of a cluster - a tourist one. It is planned that by the year 2025 a million seven hundred thousand tourists will come to the region annually. What's wrong with this idea?
- Its utopian. Today in the world tourism is an industry of extremely low profitability. Looking at the beautiful hotel, which someone built in a beautiful place, do not make a conclusion about the wealth of the whole country. It speaks only about the wealth of those who arrive there on vacation. Hotels for wealthy tourists can only create jobs in the framework of "social security" of residents of a particular territory. This happens in agricultural Turkey or in Greece. The tourism industry is not in a position to seriously advance the economy of the whole country and a separate large region.
The profit is received by the one who solves another's problems. And the global problem now is to sell what someone produced. Everything that contributes to this (from logistics to Facebook) is profitable and promising. Others - dreams, illusions, conscientious errors or conscious deception.
No economist or expert can be smarter than the market. In this sense, our theories must always be related to reality. Let me explain by a good example.
There is such a term - cargo cult. During the war in the Pacific between the Americans and the Japanese, local tribes living in Micronesia built military airfields there, worked for them, and lived quite well. But then the war ended, the planes flew away. Revenues dried up. However, the people on the islands are simple, not sophisticated in the housekeeper and dialectic. They maintain the old airport infrastructure and occasionally perform some religious rituals there, calling for the planes to return. They depict how they are going to land, as they rule on the runway. They argue among themselves whether the priests are correctly sending this cargo cult - since there is no effect so far ... They explain in which direction to bow and from which side to catch the wind. But there are still no airplanes. And will not.
Something in this is seen to the insulting native and familiar. Do not you think?