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Saturday, February 17, 2018

Putin secretive meeting of the Economic Council: too many differences

After the first two years the meeting of the Economic Council under the President was held behind closed doors are very different in temperament, people gathered on both sides of the table, at the head of which sat Vladimir Putin. The President urged participants to refrain from theoretical disputes and focus on the specific tasks facing the Russian economy – according to the President, it is necessary to look for new sources of growth, because the old resources are not working as before”.

And if such sources are found, GDP growth will be around zero”.

However, short-term crisis management solutions, from the Council, no one is waiting – it is still the task of the government. “And we need to look beyond the horizon, to outline the key economic policy until 2025″, ” said Putin.

photo: Natalia Gubernatorova

Economic Council met in the same room, which usually sits in the Security Council. On the one hand, it was to emphasize the importance of the upcoming debate, and, if necessary, to ensure its total secrecy. After all, the hall of the security Council is the most closed place to the Kremlin, where never allowed journalists.

Members of the press, by the way, was surprised to find that the composition of the Economic Council is not part of Dmitry Medvedev. The Prime Minister and the business Ombudsman Boris Titov attended the meeting as a guest. Ex-Finance Minister Alexei Kudrin was deposited at the end of the table, away from Medvedev, the conflict which was the cause of his leaving government in 2011 goal.

It is noteworthy that in the list of participants of the new status Kudrin – he recently headed the Center for strategic research, and became one of Putin’s deputies in the framework of the presidential Council was not mentioned at all. He still bore the modest Dean of St. Petersburg University.

In his opening remarks, the President made it clear that the Economic Council will not become an alternative government. In its functions is primarily a discussion site that allows to engage a wide range of participants, including regional leaders, parliamentarians and representatives of the business community.

“In the Presidium is composed of people with different views. On some issues of socio-economic development of the country they adhere to sometimes diametrically opposed points of view,” the President said, apparently referring to such antagonists, as the eyes of Elvira, or Kalinin (the head of “Support of Russia”) and Sobyanin. “I think you’ll agree that there is no monopoly in the economic debate should not be”, – addressed the audience of GDP. He urged Council members not to become isolated within the professed theoretical concepts. And all the ideas and initiatives to push together with mechanisms for their implementation in practice. The main principle of work of experts and officials, he said, should become a healthy pragmatism.

As the Economic Council has not met for more than two years, the theme of the first meeting was formulated the conceptual – search of sources of economic growth for the next 10 years. Then, Putin said, will take a number of more specific discussions about the “new look” of the social sphere, the technological upgrading of the economy, improving the business climate and improving the system of public administration. In this “crazy” regime the Council will operate a year, if need be, and a half. In General, just before a new presidential election, which Putin, apparently, will go with the program developed on the results of this “brainstorming”. The President himself noted that the may 2012 presidential Executive orders already played its historical role. Now it was time to look further over the horizon, and to set new objectives and goals on a long-term period”.

Further discussion continued closed to the press mode. However, its content was not a secret to anyone.

To reduce the hype (and many called the resumption of work of the Economic Council neither more nor less “historic” event), the Kremlin deliberately allowed many plums in the media. But presidential aide Andrei Belousov before the start of the meeting announced that none of the concepts are prepared for presentation to the President, is not self-sufficient. (Recall that the Council requested proposals to increase economic growth to 4%)

President in his introductory speech said that the current trend does not suit him. It is obvious that the reserves and resources that drove the Russian economy in the early 2000s, not anymore. “If we don’t find new sources of growth, then GDP growth will be around zero. This will limit our ability and move forward”, – stated GDP.

It is noteworthy that all participants in the debate called the main source of growth of investment. But disagree as to ensure their inflow into the economy. The greatest resonance was caused by the offer of the Stolypin club, to enable the printing press to increase funding of promising investment projects. However, Kudrin and the Minister of economic development Ulyukayev did not support this idea. “Economic problems need to be solved by reform, not by pumping cheap money”, they say. Coming after the meeting to reporters, Alexei Kudrin said that Putin expressed his position: to withdraw money from the Central Bank no need for promising projects, the government has the NWF.

In addition, Kudrin voiced their proposals to increase the retirement age and reducing the tax burden. But Putin’s reaction has remained unknown. “It was a closed meeting, I’m not at liberty to repeat his words,” – said the former head of the Ministry of Finance. But criticism from Medvedev still could not resist: “the President has already given the order to cut budget spending by 5% a year in real terms, however, the government does not fulfill it”.

According to Kudrin, the bloated budget also hampers economic growth, and begin the painful sequester sooner or later. The first step would be removing subsidies to loss-making enterprises and acceleration of privatization, he advised.

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