Kommersant: "A More Precise Version of the April Theses"
Mr Putin's report to the State Duma on April 6 was not defined by any specific economic ideology, and prompted a wave of amendments that went much further than the Russian White House's original anti-crisis programme.
Yesterday, officials and experts as diverse as President Medvedev to the head of Sberbank German Gref proposed a variety of initiatives, including but not limited to state regulation of interest rates on loans and a commitment from the Government to refrain from cutbacks to federal targeted programmes. Moreover, it is unclear as to what stage of the crisis we are currently in: different Government officials were talking about the prospect of growth in several months time, stagnation that will last until 2010, and a depression that will last three years.
Despite the April 6 release of Mr Putin's report to Parliament and the Government's anti-crisis programme for 2009 (which was approved on March 19 and then submitted for consideration), the White House's plan will continue to be refined, said First Deputy Prime Minister Igor Shuvalov yesterday.
Yesterday, which Mr Shuvalov began with a speech at a round table discussion at the Skolkovo business school, also witnessed a panoply of initiatives and amendments to the programme, as well as assessments of and projections for the Government leadership. However, Government officials often contradicted each other as well as the Prime Minister's report.
The most serious initiatives were put forward during President Medvedev's meeting with the leadership of United Russia. After praising Mr Putin's report, the President immediately offered several of his own amendments. Mr Medvedev first proposed changes to the Law On Bankruptcy, which would prevent the collapse of major construction companies, saying that the law was not dogma and could be amended in light of the financial situation. While discussing investment in Internet companies such as search engines and social networking sites, Dmitry Medvedev made the surprise announcement that it was necessary to monitor foreign investors' involvement for security purposes. Finally, the President said that he thinks that the "special approach" could include Government regulation of interest rates on bank loans for a period of "six months to a year". The President offered no specific details.
The same day, First Deputy Prime Minister Igor Shuvalov rejected the idea of directly regulating the lending market, calling such measures extreme. Mr Shuvalov himself said that in this regard, Russian companies have adapted to the crisis, that companies are eligible for support after adapting in such a way, and that the Government will use the three-year financial crisis to carry out "structural reforms". He also told those present, which included the leadership and co-owners of major companies operating in Russia such as Inteco, Severstal, Microsoft and TNK BP, that the relationship between government and business had changed. He said that the state would offer credit to those business sectors that generate the most "national prosperity". Later, the First Deputy Prime Minister said that the White House could oversee measures for the purchase of "toxic assets" from financial entities, and could even return to the idea of "a bank of bad assets", which in January was rejected by members of the Government, including the very same Igor Shuvalov, due to "the high risk of corruption".
Economists' assessment of the situation only added to the confusion. For example, the head of Sberbank German Gref talked about the Russian economy's "long and difficult" road to recovery from the financial crisis, and then went on to remind everyone that "nobody had believed" his October predictions of a 4% decline in GDP during 2009 and an 18.7% slump in bank shares.
Andrei Klepach, the Deputy Minister of the Economy, echoed the Sberbank executive's pessimism and talked about the economy's possible stagnation through the end of 2010. Mr Klepach added that "growth could be as low as 0.5-1%, which is almost a loss."
Conversely, Alexei Ulyukaev, the first deputy head of the Central Bank of Russia, said during a conference at the Higher School of Economics (HSE) that "the economy has already survived the crash landing," and that "the worst is behind us."
Mr Ulyukaev discussed a possible decrease in the Central Bank of Russia's refinancing rate. At the very same press conference, Presidential Aide Arkady Dvorkovich said that the current interest rate on loans, which the Central Bank has been urged to lower, was in fact "well-founded" and was connected with the difficulty of predicting risk. "Lowering the interest rates would not definitely lead to an increase in lending. All the same, the reward for this risk will play out on a massive scale, and today no one can assess the risks adequately," said Mr Dvorkovich, explaining the bank's inability to explain its future actions.
The issue of interest rates, like many similar, related issues, was not something on which Mr Putin commented directly in his report. However, at the HSE conference, as on other occasions, experts and officials put forward ideas that directly contradict the report.
For example, a group of experts led by Yevgeny Gontmakher announced in its report both that the White House had not allocated sufficient funds to support the labour market and that the high unemployment rate was good for the economy. In fact, the White House declared combating unemployment a priority in both the anti-crisis programme and in the Prime Minister's report on April 6. Meanwhile, the head of the Ministry of Trade and Industry, Viktor Khristenko, announced in Yekaterinburg that it was vital to ensure that that federal targeted programmes remain fully financed in order to "to modernise industry" and create "its new image". If you recall, Vladimir Putin's report followed the presentation of the new 2009 budget to the State Duma, which stipulated overall cuts of about 25% to the federal targeted programmes, including those mentioned by Viktor Khristenko.
Both Mr Shuvalov and Mr Khristenko used practically the same language yesterday when they said that the government could not make up for falling private demand in the Russian economy during 2009 with its own spending. Essentially, the anti-crisis programme and the new 2009 budget hinge on that exact idea. Nevertheless, taking into account the significant lack of detail in the "range of measures" proposed by Vladimir Putin's Government, it is impossible to describe those who spoke yesterday as contradicting him.
By Dmitry Shapovalov
