Russia launches plan to cushion economic blow from sanctions

Yesterday, the Kremlin promised large-scale measures of economic and social support for the nation. Without disclosing emergency amounts to be mobilized.

Russian sustainability plan. The national support plan announced yesterday in Moscow will be launched “in the near future,” Vladimir Putin explained. The head of the Russian state wants to make this new plan a response to the West’s “economic blitzkrieg” against his country.

Even in this situation of suffocation from the outside, Vladimir Putin assures that the task of reducing poverty and inequality remains quite “achievable”. And to this end, he gave instructions to increase all social benefits, from the subsistence minimum to old-age pensions, and also undertakes to increase the salaries of all public sector employees.

The emergency amounts to be withdrawn from the state treasury have not yet been announced, with the exception of assistance to the agricultural sector in the amount of about 220 million euros (at current prices). But President Putin said the central bank “would not need to print money.”.

He insists: “We have income, market income, healthy income. The problem now is not money, we have the resources,” constantly referring to the budget and cash reserves replenished in recent years.

According to the Kremlin, the main difficulties identified are related only to the “availability of components, equipment and materials”, and then to the “new organization” that business leaders have to find. At the same time, the Russian president calls on the private sector to find “necessary solutions” in the field of “maximum entrepreneurial freedom”, and the goal is to fundamentally change the “structures” of the economy. Logically, the state should give up dominance over the national economy, which does not seem to be on the agenda.

Fixing a “fair” price

At present, direct control of inflation is a requirement of political power. Regional authorities are required to “carefully monitor unreasonable price increases.” Return to piloting the labels of the past, editorialist for an economic daily. Kommersant don’t believe it. Anatoly Kostyrev bases his demonstration on a symptomatic case of the current shortage of sugar on the shelves. The Attorney General’s Office on Tuesday ordered “information checks” on the increasingly rare item. But the economic journalist invites those who are tempted by “honest“, “remember market mechanisms (…), otherwise empty store shelves will become much more familiar.”

Research by Russian economists from Sberbank and the NAFI think tank, released yesterday, shows that the only household spending item that continues to rise is food, highlighting how much the population is stockpiling food for the coming “hard times.” Analysts at the Austrian bank RBI, still the Western European establishment most exposed to the Russian market, go so far as to consider the hypothesis of Russia’s “loss of wealth” comparable to that suffered by Iran after the 1979 revolution.

For now, the central government is working to reassure people of the availability of everyday goods. Yesterday, the Ministry of Industry and Trade signaled in this way that there is no risk of running out of sanitary pads and baby diapers, exposing levels of national production and stocks … Russian families will decide whether to convince or not in the coming weeks.

Citizens have something to lose

At the same time, the Kremlin believes that the answer to such concerns should first of all come from the regional authorities. The corresponding decree was adopted yesterday to give them additional powers, since, according to President Putin, it is the heads of regions who are best able to make “operational” decisions that suit the citizen.

However, for the recognized Russian specialist in national economic geography, it is the residents of the capital, to a greater extent than the residents of the hinterland, who will feel the scale of the major shock the most. Natalya Zubarevich, a professor at Moscow State University, insists that Moscow’s per capita income is twice that of the country.

More generally, according to the analysis of this scholar, who theorized the concept of “four Russias”, it is the city dwellers, because they have something to lose, and not the countryside who will suffer the most from the consequences of the economic downturn. to come. Then the whole fashion of post-Soviet consumption collapses for them, no matter what measures were promised yesterday.

Benauda Abdeddaim International Observer

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