Amid the news of a new government, The Bell founder Elizaveta Osetinskaya did a wide-ranging video interview (Rus) with economist and financier Andrei Movchan. A former banker, Movchan now heads Movchan’s Group and his book, Russia in a Post-Truth Era: Common Sense vs. Information Noise, was published last year. We have translated some of the best bits of the interview into English.
Why Putin is re-writing the constitution. “The ‘collective Vladimir Putin’ had a think about how to ensure a power transfer did not end up in cataclysm…. He [Putin] really doesn’t want to leave the country in bloody chaos… many people, including myself, have said this for years — under Putin, we suffer as we suffer, but if something happens to him we will suffer in ways we haven’t even dreamt. There is nothing worse in Russia than a battle for power.”
Where the economy is headed. “The government’s task now will be to take everything they can from people, and hand it to the right people in the right places. We will increase social spending, returning to the system used by the USSR when the state had everything. In other words, the state takes all it can and then gives it out again. The overwhelming majority of people will be fed so much they will feel almost no hunger. This is how we do it — there will be very few people in a really bad way. At the same time, no-one will worry if everyone is in in a bad way. Can such a country lead the developed world? Of course not. Can such a country survive for a long time? Of course, it can — what else can it do?”
Why the ‘Chinese miracle’ is not a model for Russia. “The Chinese political model seriously obstructs economic growth. The problem is one of absolute numbers — 5 percent annual growth for China is worth $500 billion, while 1 percent annual growth for America is $640 billion. At the moment, China is a country where per capita GDP is the same as Russia. People say China has been very successful, but this is linked to it having a low starting point. As well as to the fact that a group of developed countries graciously allowed China to grow. China is big business for developed countries. They thought it would be profitable, but now they are starting to realise that, in some ways, they are damaging themselves.”
What will happen to Russia when no-one needs oil. “It will be the same as when no-one needed the USSR’s oil… Gorbachev, perestroika, Yeltsin, bandit democracy, carving-up of everything that is left, love for the West, Western credit, humanitarian aid. And if [the price of] oil then recovers, all the rest will be the same as well. Overall, I think this will only end when we join the European Union, in one form or another. Because Russia is a huge sales market and a source of resources for the European Union. And the European Union is a massive source of technology, management structure, communication systems and trade for us. Our real historical destiny is entry into Europe.”