caveat emptor wrote:This is the time that they should start investing cycle, as there's more than enough reserves and they've been running crisis budgets for almost a decade. I've seen propositions to increase oil price cut off to $50 and that is a good step. Also, infrastructure and spending in science and R&D should be increased. God knows that Ru economy is underperforming considering all the natural wealth and good educational structure of population. Some of it is due to geopolitics, but Putin's admin has to take the blame, as well. I hope they give Mishustin free hand and let him work. Just keep politics outside of economy.
Some truth here. The issue at hand is that Russian government doesn't want to "overheat" the economy. What we are seeing in other nations they are overspending without having a clear cut goal or how to achieve such goal. In the instance of the US, they are doing both - overspending without such goal, and borrowing such money to overspend. So not only are things not developing or being done, it is overblowing the budgets of individual projects and inflation booming.
Russia is trying to be careful in its spending and this isn't a bad thing as its a byproduct left over from hard learned lessons of the Soviet Union. Do not forget, many of these politicians are left overs of the old guard and while many consider them old dinosaurs that need to go, I do not see it as such. Such men and woman are aware of the mistakes made as they lived through them, and in doing what they are doing they feel that it is the much safest route. As I see things, experience outweighs the academic learned in that with experience sees both sides of challenges and gains with a tangible example. Something that new generation of people who like to call the older "boomers" do not understand.
I am not an old man by any means, that title is reserved for Franco (sorry friend). But I have lived through enough and seen enough to know that I rather have a slow but steady growth with the odd drops here and there, than a boom then a bust. What I am referring to is both China and the United States. China's massive boom is now coming at a cost - human development and the migration flow of its people. China is having a hard time keeping up and is doing nearly anything possible to sustain high growth rates, even with those growth rates now slowing down (by most measures, still a lot compared to most, but to China's recent past, it is low). And in the end, there really isn't anything China can do. Slow and steady can win the race as the old story goes in the Tortoise and the Hare. China will continue to face rather slower growth which may still be higher than most, it will be rather low for its population. If China did it slower, they may be behind right now than they actually are, but their growth would continue for far longer and be more sustainable, while being able to have better control of migration and development of areas outside of south east China. China could be an entirely different entity and be paradise compared to now with its urban jungles and slow decay of its vegetation along with a culture and history so beautiful, but nearly gone.
I wouldn't say this is all the exact case of Russia in that its all about trying to be slow and careful. There are of course obstacles such as what KVS pointed out with the nonsense the Central Bank of Russia is doing. But we must not forget, Russia has only recently in the last 10 years started to regain itself after the collapse of the USSR. For up to 20 years prior, it struggled to not only keep itself together, but to start to rebuild. Now it is at the stable point in its journey, and it will be another 10 years that we go from this stable point to real growth and development far beyond what it was capable of doing. So long as the old guard and the new guard keep the vision and the structure, it will thrive.
Mishustin is a brilliant man and I suspect he along with the old guard and new guard will guarantee the development. Already along with Shoigu's smart idea of creating new planned cities, this will revitalize east of the Urals and drive development not seen since the Soviet times. We have witnessed how their rather smart and strict budget rules have managed to get BAM developing which was something very hard even during USSR times. It also helped create the Crimean bridge which is a feat that most nations cannot do.
TL;DR - Slow and steady development makes it much easier to maneuver and adjust to any challenges thrown at it, rather than having a boom and bust so bad it is a make or break situation.
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caveat emptor
