3083 Grigory YAVLINSKY: Economy cannot survive these political decisions

The anti-European movement, to the historically reverse side will not lead to the crisis but to crash


Anna Artemjeva / Novaya Gazeta

The position of Yabloko Party and its leader Grigory YAVLINSKY was always uncompromisingly pacifist. But today the matter of how to treat the war has crossed the line of just ethics and the politics itself. That is why the talk between the Economy Department editor of The Novaya Gazeta and the author of “500 days” was also about the war. And about how to rescue our country and from what to rescue it. 

- The US President said that the western sanctions had tattered Russia’s economy. How true are his estimates – both about “tattered” and specifically about what has happened due to the sanctions?

- Last time we heard such a rigorous statement from Ronal Reagan when he called the USSR ‘the evil empire’. What was happening at that time? The USSR invaded into Afghanistan, then the South Korean Boeing was shot down, then started Star Wars Arms Program, which was profanation, but became a giant load on the budget, oil prices started to decrease from 1985 and as it is known, in five years the country was destroyed. And here there are analogies: the war with Ukraine, Malaysian Boeing shot, the decrease of oil prices, statements from Russia like: “We can turn America into radioactive ash”, and they say that Russia is as dangerous for the world as Ebola or terrorists from the ISIS.  That is why the Obama’s words are more than just words, they are particular signs, and quite certain logic is built after them; although the statements about the “tatters” refer to the genre of political rhetoric they speak for the gravity of the situation.  

- Regarding the issue of historic analogies. I have read an interesting research of yours that establishing correlation between the oil prices and international politics first of the USSR, and then Russia. There are almost no doubts that expensive oil makes our country more aggressive. The same as the longtime ascending trend damps political and economic life of the country. The question is the following: in the second half of the 80- s, the USSR tried to make perestroika, and the international policy was moderated by times – and nevertheless, the country was destroyed. Is that such a historic doom; is the curve of our history pegged to the curve of oil prices?

- No, it is not. I do not share a popular point of view that the Soviet Union crashed due to the oil price decrease or deficit, or because people did not have anything to eat. I do not know whether you remember the times of late 80s…

– I went to initial school.

- The shops were empty, but there was no hunger, and the Soviet people often stood much more severe hardships. The Soviet Union crashed owing to another reason: Gorbachyov allowed people to say what they think. The state stopped putting into prison, punishing, even firing, and that was allowed to publish, say and show on TV.

Since the whole system was built on lies, then, as soon as the lies stopped, the Soviet system crashed. It did not have mechanisms of natural political life, but the lie was an artificial foundation. The lie was necessary for legitimization. As soon as the lie stopped working, the legitimacy disappeared and the system crashed. The oil price was not a determining factor.

- Now the system reacts in an opposite way: the space of liberty is getting narrower, we can say almost nothing now – for that they put into prison, close the editions, block access to information. Would this seem to be more appropriate reaction?

- It means only that the lies and crimes on a national scale will be revealed later and this system will crash again. Other reasons can accompany this. Now our country entered into conflict with all at once, simultaneously. This situation does not have even the least positive perspective. Moreover, the system does not go forward, but back. Russia accepted the program of demodernization, which initially referred to economy, but now it has covered almost everything. The country has moved to the anti-European vector - backwards, to the remote past. But the movement to historically reverse side will not lead to a crisis but to a crash.

– In political meaning, if to read outstanding apologists of demodernization, XV-XVI centuries are considered to be the “golden” in the history of Russia. But where are we going economically? To demolition of capitalism?

-In Russia, in the 90s, there was created a system of peripheral capitalism. This is the capitalism which is not independent but is attached as an auxiliary one to the group of major mostly developed countries; it supplies them with raw materials and various resources. But it itself is at rather remote periphery because it does not have relevant economic and law institutions or modern drivers. The systems of the developed countries (which it was attached to) performed all these vital functions for it. And now this peripheral system has cut itself off the center, having imagined that it can live independently. What will be with it? It will be degrading because it is not connected to the main core, periphery of which it is…

Moreover, it is breaking ties intentionally…

- Yes, exactly. The economy of our country was made a victim of policy. The problems of our policy are political. Everybody is discussing the rates, some interests, whether the Central Bank of the Russian Federation works properly… But the point is different – it is the line of policy.  It is the line of policy, not the Central Bank of the Russian Federation, that destroys our economy. How else can the Central Bank act in the conditions when it is told: “Stop the rouble falling, but do not touch the reserves?” It looks like a situation in Gianni Rodari’s book when countesses Cherries told earl Cherry: “Learn! But do not touch the books! Don’t you understand that they are spoilt of this? <…> Learn by heart”.

Only from the fact that the key rate was increased up to 17% in the night (!), the economy could be paralyzed. The people start to think that the government panics if they take official public decisions in the middle of the night. Besides, speaking to the point, if the rate increases and interventions are not held it does not help. They had to look at the Indonesian experience, for example: there, in an instant, the rate was increased up to 50% but there were no interventions because there were no reserves and the rupiah went on falling as before.

But this is not the matter. It is useless to discuss completely economic issues. The economy might not survive these political decisions. This is what matters. The economy alongside with the whole country was removed from the big world, exposed to self-insulation, assigned with some absurd tendencies. It is a manmade thing, it is done deliberately…

- The Prime Minister said the same: “A conscious choice”.

- I would also like to understand: is destruction of the Russian economy in exchange for Crimea a conscious choice? When they were making this “conscious” choice, did they realize what consequences would there be and who would be responsible for this? The talks that our economy had and has very serious problems and it requires profound reforms is a trivial true, but in practice we had economy; even though it was weak, it was still possible to live with it.

Anna Artemjeva / Novaya Gazeta

– Until the time when oil prices crash?

- The modern economy of a huge country should work at $20 per barrel, and at $10. They just had to develop the domestic demand. For example, the most efficient way is massive construction of private residential houses for families, and infrastructure. Then, everything would start working: machine building, electronics, consumer goods industry. But they have not done it – and the reasons are clear: these tasks are not solved in a nomenclature-corporate oligarchic state. Such a hybrid cannot exist long and efficiently: not to have competitors in politics and to have the same governance for decades without changes, but to have competition in economy. How could happen that the policy, which is pursued, is absolutely against the long-term interests of the whole country?

- I cannot say how, but I understand approximately when – from the very beginning of the third tenure.

- No, the matter is not the tenure and even not the person. The confluence of governance and ownership implemented in the 90s led to absolute absence of control of the governance, mass media paralyzing and absence of the independent civic society. As a result, in this system anybody who controls the Kremlin can do anything. 

In 2012, the period of “familiarizing” was over, the movement “into the history” started. They decided to close the theme of modernization and fasten the country on the anti-European movement, an absolute heresy. Why this tendency was chosen? Because the European movement leads to competition in politics and change of governance. And heresy only conserves the governance and creates an illusion that it becomes irremovable.

- Well yes, Churov stated that the next generation of our people would live at communism. But some symptoms remind me early 90s - significant and continuous rouble falling and increasing inflation. How real can be falling into hyper-inflation and, let us say so, in hyper-devaluation?

-Now - unpredictability, anything may happen. And we have to think about the perspectives in the political paradigm: whether they conquer Mariupol tomorrow or not.

- In my opinion, the main package of sanctions is already introduced; it means that to create a worse situation for us externally is already difficult. We can consider now whether they cancel the sanctions or not and whether it becomes better with this regard or not…

- I think that the sanctions are at least, for long. Why do the western countries need such a factor of risk? They tried to treat the issue like “bad guys, good guys”. If the “bad guys” change for “good guys” – everything will be fine. It turned out that in Russia it does not work – it is the system that matters, and the citizens fall easily under almost any propaganda and any lies and believe them. What shall we do with that? They have to be put into the category of Nigeria or Zimbabwe.

-  I cannot get past the question how adequate are the actions of the West? Since the isolation of the big country with nuclear weapons….

- What can you do with that? Now this is force-majeure. Now it is we who must think what to do, how to save our country.

- You mean that we have not passed the point of no return?

- There are several such points. Some of them we have passed, some not, but we still have to turn back.

-  How could it be done in practice?

-Three things must be done. First, initiate an international conference with regard to Crimea. Second, all these “vacationists” and what they drive to go “on vacation” must be really taken away from Eastern Ukraine. Third, Russia must become a part of coalition struggling against the ISIS. That’s the minimum.

- I understand that the situation can change quickly and unpredictably, but if to imagine that the system in the state of “new balance” now, what is your forecast of further development?

-  What is the oil prices falling more than two times? It has been already reflected in the dollar exchange rate, and it means that if the salary does not change the price of the consumer goods basket must grow by 50-60% minimum. Then the inflation growth up to 15-20% is a hopelessly optimistic scenario. Then, there will be incomes correction. They have grown almost two times and half for last ten years, now they will be corrected, that means that the real incomes will be sharply decreased. If to keep the prices and restrict entrepreneurship, there will be deficit, money overhang, unemployment. It will result in something like the end of the 80s.

-Why I am asking this… Because TV propaganda, which appeared to be extremely efficient, plays, of course, a huge role in what happens to the society. But still can the passivity of thinking be overcome when evident contradictions between what happens on TV (where we do not have an economic crisis) and those social-and-economic consequences which are evident occur?

- I do not think so. I think everything is more complicated and more dangerous. As a response to social discontent, they will appoint the main guilty one. For example, that can be Obama. Obama is a wonderful target, it is impossible to reach him, but it is easy to get united around Putin against Obama.

- How can this idea be sold to non-zombified people, big businessmen, for example?

- Our big business, a successor of criminal loans-for-share auctions is intimidated so much that nothing needs to be “sold” to it – it is “glad to be deluded”. Of course, business understands that the crisis is political but it is afraid even to think about it, because it is deadly tied with the governance. Sometimes something forces through, certainly. I wonder whether Deripaska is back from Davos?

- I think Putin does not care about the expressions of people with regard to economy, i.e. he also understands that this matter is political. Just economy distracts him from the mission….

- There is no mission, because there no perspective. Before this situation, the perspective existed: to build the country like in Europe, to build the economy like in the whole world. And what is now? If you fight against the whole developed world and you have 2% of GDP and they have 42% of GDP… That is the dead end. There was made a tragic political mistake. It has very deep roots. But in fact, this is the stylistic absurd of Belovezhskaya Pushcha  bleeding. That is the payment for all that.

- There is a passionate part of society that likes a lot everything what is happening but they think it is good but little. Does the fact that these fringes are in mainstream now create risk for the regime? I mean aggressive expansion of the Russian World to Russia…

- For me the Russian World is liberty, creativity and justice. Banditism, shady affairs and obscurantism do not belong to this. What is the vital interest and perspective of the Russian World is for Russia to become, at last, a modern, free, European country. While choosing a historical way, there are a million of wrong options but the right one is only one.


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