Streetwise Professor

December 8, 2007

Yup.

Filed under: Economics,Politics,Russia — The Professor @ 11:20 am

Here’s an excerpt from an interview with Yevgeny Yasin of the Supreme School of Economics (H/T JRL):

Yevgeny Yasin: When the authorities start meddling in economics just to promote their own selfish interests, they are begging for trouble. Payback inevitably comes, sooner or later. Finance Minister Aleksei Kudrin stashed oil and gas export revenues in the Stabilization Trust and kept refusing all suggestions to use these finances. In any event, he was forced to give in earlier this year. The soaring inflation is one of the results of his weakness. As for what will happen after the presidential election, yes, another price-rise is a distinct possibility. New programs are charted and adopted, finances are invested in institutes of development. The state in the meantime never invests in development. Is it too busy? Perhaps it is. We see vicious infighting in Putin’s administration. Cherkesov’s men get picked up, then the deputy finance minister. The Union of Right Forces was actively smeared and compromised in the course of the parliamentary campaign. If you ask me, it is Sechin’s siloviki mounting a campaign against liberals.

Mark my words, it all will cost us dearly one fine day.

Question: How will all these games in the Kremlin affect the lives of average Russians?

Yevgeny Yasin: My calculations tell me that the fall of business activeness in Russia has cost the country 2% of the GDP every year for several years already. Businessmen fear for their assets and their property. As things stand, state corporations serve as a formal smoke-screen for the so called distributive coalitions within the corridors of power. This process should be put an end to or Russia will find itself in the periphery of global economy. A lot is at stake.

Instead of dealing with the oligarchs who have never had anything to do with him, Putin should focus attention on the ones from the inner circle, from his own entourage. He never does, though.[Emphasis added.]

Yasin echoes two common SWP themes. First, the erosion of property rights in Russia, and the concomitant effect of this on the Russian economy. (I’d like to know the basis for his 2 percent of GDP number.) Second, as I noted most recently in an post from earlier today, the use of the state to direct resources to individuals in power, i.e., the return of patrimonialism.

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