Most domestic experts, assessing the prospects for the country's economic development, say that our GDP by the end of 2023 will see a moderate decline, in the range of 1%. Forecasts by foreign analysts are slightly more pessimistic, but they all agree that Russia will not face any global shocks related to the Western sanctions pressure or the need to finance the ongoing conflict.
Is this really the case? And, most importantly, what actions should the government take in order to change the negative trend? Forpost addressed this question to Vladimir Litvinenko, a leading expert in the field of the fuel and energy complex and rector of the St. Petersburg Mining University.
- Vladimir Stefanovich, you are a supporter of the concept of state regulation of the economy. How relevant is it in today's realities? And won't excessive centralization of decision making be a problem for business?
Vladimir Litvinenko: Many entrepreneurs - and not only entrepreneurs - think that the liberal model of economy, where the main condition is minimal government interference in business, is the only possible paradigm of progress. But in fact this is not the case. In my opinion, the government should play the leading role in managing all the processes of development of the national economy and society. Its mission should include the development of transparent and beneficial to all, including the market, standards and requirements, while the function of employer, of course, should remain with private companies.
The implementation of such an approach in practice has already repeatedly proved its feasibility. The most recent example is the transfer of domestic enterprises of the military-industrial complex to virtually round-the-clock operation, which has significantly improved the supply of the Russian army. If the only true ideology, as in the nineties of the last century, remained liberalism, denying the need for a single control center, it would be very difficult to achieve such a result. After all, many companies would have found achieving the previous targets to be an appropriate outcome of their activities.
But if state regulation yields such impressive results in one of the priority areas for our country, it would be quite logical to apply this strategy in other areas as well. For example, to create clusters engaged in deep processing of raw materials and producing consumer goods in demand, as well as to develop science for the purposes of the economy.
- Today they talk a lot about our dependence on imports in a number of industries and the need for import substitution. But are our scientists ready to generate new knowledge and introduce it into production?
Vladimir Litvinenko: I don't like the term "import substitution" too much. Its etymology seems to hint at the necessity of patching up some holes. In fact it is not about this, of course, but about creating technologies which are competitive in price and quality and replace foreign analogues.
Russia has enormous potential for realizing its unique natural and intellectual capital, because during the Soviet era, our scientists were the first in various fields of scientific knowledge: the conquest of space, the use of the atom for peaceful purposes, and so on. They managed to turn our country into a highly developed, self-sufficient power, and today there are all the prerequisites to nurture a new team of talented, highly qualified researchers and engineers on this foundation.
In order for this to happen in reality, we must first recognize the scale of the problem, and the obvious fact that it is not scientific or technological. Its roots lie in our society itself and its attitude, for example, toward the system of higher education. Let's face it: many more applicants prefer to enroll in bachelor's degree programs rather than the specialist program. Because it is easier to study there, and you can get a diploma in four years, rather than in five and a half years.
Many parents welcome this approach. The child will finish university quicker, get a position and start earning money on their own. The fact that he will be less competitive in the labor market is perceived as a secondary fact. The priority is the search for easy ways of life, not professional growth. As a result, our state is living with a constant shortage of competent engineering personnel required to effectively exploit the subsoil, increase the profitability of production and ensure the principles of sustainable development.
- What is the way out of this situation?
Vladimir Litvinenko: First of all, it is necessary to get rid of a number of stereotypes of thinking and behavior which were inspired by the liberal ideology. For the last thirty years after the collapse of the Soviet Union we have been forming an alternative political and economic environment based on market relations in the society. The declared goal is to turn Russia into a high-tech power at the expense of the knowledge economy. At the same time, when choosing a methodology to achieve this goal, the Government before and often now continues to be guided by Western standards of science and education development, although they have repeatedly proved their invalidity in relation to the Russian realities. As a result, the main competitive advantages of the domestic economy - mineral, natural, and intellectual potential - have been working to exhaustion for all these years.
This is the essence of the "Western" trap for our economy. The U.S. and the countries of the Old World, with their rich experience of colonial rule, were well aware of our strengths from the very beginning. These are, first and foremost, the unique natural resources in Russia and the huge potential of our talented scientists and engineers capable of creating breakthrough innovations. There is no exaggeration in this statement, because, as I said earlier, we have inherited a remarkable tradition of generating new knowledge, which was established under the specific conditions of the Soviet Union. The imposition on Russia of a two-tiered system of higher education, suitable for the humanities but totally unacceptable for technical universities, was aimed not only at lowering the overall level of graduates. No less important for the West was the quantitative and qualitative reduction in the number of engineers and scientists in our country, which led to an excessive dependence on foreign specialists and technology.
This is the main result of the dominance of economic liberalism - the transformation of domestic technology, production, science and education into ruins. And what is most surprising, despite such obvious negativity, a significant part of our society continues to perceive this ideology as the only correct mechanism for turning the country into a high-tech superpower. In other words, they sincerely believe that Russia's destiny is to become an ordinary Western country that has abandoned its historical and cultural values.
The problem is that in reality this is impossible. This would not only be contrary to Russian traditions and mentality, but would not take into account the peculiarities of the geopolitical environment, the competitive advantages of the domestic economy, and the geographic location of our country, most of whose regions live in sub-zero temperatures for six months or more. Try, for example, to heat the residents of Vorkuta or Khanty-Mansiysk exclusively with wind turbines, solar panels, and electricity. No way, they will freeze to death in their apartments, while paying ten times more for heating than they do now.
This is just a small example of the fact that the ideas that the West is trying to impose on us, which may be good for Europe or America, are completely unacceptable to Russians. And the supposedly easy and correct way under the flag of "true" democracy is not at all aimed at increasing our welfare, but at transforming our homeland from a country of citizens into a country of subjects, whose standard of living will not get better. There is, in fact, nothing behind the pretty wrapper. And until we understand this, until we get rid of the stereotypes of thinking and begin to act in the interests of the state and, therefore, in our own interests, the socio-economic development of our country will be artificially hindered.
We must become a leading player in the international high-tech market, but to achieve this, first and foremost we must reform our society and change the mentality of our citizens. In particular, their perception of business, establishing the understanding that an entrepreneur, who makes a profit from creating innovations, deserves respect, as he/she makes a feasible contribution to the real prosperity of the country. It is also necessary to reform the educational and scientific environment, so that the educational and scientific processes are an integrated whole and lead to the emergence of outstanding scientists who would be engaged in the practical implementation of the new knowledge they acquire into production.
- What exactly do you have in mind? Manufacturing companies?
Vladimir Litvinenko: There are many directions for the development of science for specific tasks of the economy. One of them, as I said above, is the creation of clusters involved in the deep processing of raw materials. But in order for our country to have as many of these production chains as possible, beginning with the extraction of hydrocarbons and ending with the production of consumer goods, we must again change our mentality. We simply must perceive our natural capital not as raw materials that bring export revenues, but as an element of high technology - the first link in the chain of creating high-margin products of high redistribution.
For example, when hydrocarbons are processed into polypropylene products, which requires up to six process steps, the surplus value of the end product increases 10-12 times compared to the price of crude oil. Furniture, pipes, medicines, varnishes, paints, car tires, clothes - these and many other things that surround us are made from fossil fuels at petrochemical plants, and the demand for them is constantly growing. The state must initiate and regulate the process of systematic implementation of profile projects. In particular, to create conditions for investment in the industry, to determine what volume of raw materials and from what field should be involved in deep processing, to intensify the process of generation of new scientific knowledge, their introduction into production, to set specific tasks before scientists and business and mobilize society to solve them.
Such a strategy will allow for a relatively short period to dramatically increase the number of jobs, stimulate domestic demand, ensure the growth of the welfare of the population, increase tax revenues to the budget and in the foreseeable future will contribute to the task of doubling the GDP of our country. Of course, such an ambitious goal can only be realized if the government becomes the center of decision-making to promote the development of the most important sectors of the economy. Strengthening of state regulation in this direction will allow Russia to become a real superpower, to create innovations for production, to modernize infrastructure and laboratory base as an integral part of obtaining new knowledge, and to form conditions that motivate those who are able to create in this field to engage in science.
