SERGEY DROBYSHEVSKY: NATIONAL PROJECTS HAVE NOT STARTED YET
Sergey Drobyshevsky, Scientific Director of the Gaidar Institute, was interviewed on January 23 by business journal “Invest-Foresight” and tackled the most acute macroeconomic issues, such as severity of monetary policy, governmental intention to accumulate major part of state revenues in reserve funds, impact of national projects on private business.
— Sergey Mikhaijlovich, is it true to say that there is a consensus among economists nowadays that Russia no longer needs such a severe fiscal and monetary policy?
—- I think, at least among a certain group of economists whom we usually call the liberal group and, accordingly, economists who usually cooperate with the government, such a consensus has been largely achieved. As for other groups, to be honest, it is hard for me to say not because they have a different opinion but simply because at present, actually, there is no discussion after rather broad economic discussions in the situation of 2017 - early 2018 prior to presidential election.
If we consider the same “Growth Party” or “Stolypin Club”, I have not seen their ratings recently. At the same time, based on the positions expressed by alternative groups before 2018, I would not say that we became close with them. We still consider a number of their provisions, in particular the idea of zero interest rates, and extensive lending, to be economically harmful rather than positive. I would say that there is a certain evolution of views on fiscal policy among liberal group of economists. However, it seems to me that talking about consensus is not entirely correct
— Do national projects and new presidential demographic initiatives mean mitigation of fiscal policy? What is your opinion?
— May be yes, may be no. In the long run, it all depends on whether these planned expenditures will be financed via reduction of budget surplus or whether budget funds be redistributed. We simply do not know yet.
— Speaking at the Gaidar Forum, you saidthat national projects are a tugboat or an icebreaker followed by private business?
— Private business could follow national projects. In any case, implementation of national projects, construction of roads, construction of healthcare, educational institutions, the same social projects and support rendered to construction create certain aggregate demand and as a result, private business is able to sell their goods either under state orders or simply as part of an expanding purchasing power of the population and companies. Accordingly, if business faces additional demand initiated by national projects and does not have enough production capacities, it means that it is making new investments, etc. In this sense, national projects and state expenditures can generally have a multiplier effect ..
—Have we already seen this effect last year?
— No, we did not. Therefore, I spoke about it at the Gaidar forum that, regretfully, they have not been actually launched so far, though, one and half year passed since announcement of national projects. Then, consequently, the main thing is not that they do not directly contribute to economy but that they do not provide any motivation to private business to join someone or to go somewhere when these national projects have not started.
Interviewed by Konstantin Frumkin
—- I think, at least among a certain group of economists whom we usually call the liberal group and, accordingly, economists who usually cooperate with the government, such a consensus has been largely achieved. As for other groups, to be honest, it is hard for me to say not because they have a different opinion but simply because at present, actually, there is no discussion after rather broad economic discussions in the situation of 2017 - early 2018 prior to presidential election.
If we consider the same “Growth Party” or “Stolypin Club”, I have not seen their ratings recently. At the same time, based on the positions expressed by alternative groups before 2018, I would not say that we became close with them. We still consider a number of their provisions, in particular the idea of zero interest rates, and extensive lending, to be economically harmful rather than positive. I would say that there is a certain evolution of views on fiscal policy among liberal group of economists. However, it seems to me that talking about consensus is not entirely correct
— Do national projects and new presidential demographic initiatives mean mitigation of fiscal policy? What is your opinion?
— May be yes, may be no. In the long run, it all depends on whether these planned expenditures will be financed via reduction of budget surplus or whether budget funds be redistributed. We simply do not know yet.
— Speaking at the Gaidar Forum, you saidthat national projects are a tugboat or an icebreaker followed by private business?
— Private business could follow national projects. In any case, implementation of national projects, construction of roads, construction of healthcare, educational institutions, the same social projects and support rendered to construction create certain aggregate demand and as a result, private business is able to sell their goods either under state orders or simply as part of an expanding purchasing power of the population and companies. Accordingly, if business faces additional demand initiated by national projects and does not have enough production capacities, it means that it is making new investments, etc. In this sense, national projects and state expenditures can generally have a multiplier effect ..
—Have we already seen this effect last year?
— No, we did not. Therefore, I spoke about it at the Gaidar forum that, regretfully, they have not been actually launched so far, though, one and half year passed since announcement of national projects. Then, consequently, the main thing is not that they do not directly contribute to economy but that they do not provide any motivation to private business to join someone or to go somewhere when these national projects have not started.
Interviewed by Konstantin Frumkin