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Mikhail Kasyanov: Do Not Flatter Yourselves
// The London forum
Yesterday, Russian Economic Forum was opened in London. Its idea is to propagandize Russia’s economic progress and attract investments. It turned out differently from what had been planned, however. The star of the forum, ex Prime Minister Mikhail Kasyanov summoned the audience not to be flattered by the current figures, but to objectively evaluate the risks of the future development of the Russian economy.
The forum presidium’s table was empty, when sensation had already been hanging in the air. Nameplates of speakers testified of the fact that the only official representative of Russian government in London would be President’s Counselor Andrey Illarionov, who has been nicknamed in the Kremlin as “built-in stabilizer.” However, there was also a nameplate reading “Mikhail Kasyanov,” whose speech became the main sensation.
There is no doubt that had Kasyanov remained Prime Minister, or headed up some state bank after his dismissal from the post, his speech would have been different. However, having failed to receive proper support, he chose the route of opposition, not excluding the possibility in 2008 presidential elections. So that is the reference point from which he spoke yesterday.
Strictly speaking, Kasyanov was not able to avoid the subject of his metamorphosis. His first words were: “This is time to speak not only of success. This is the time to speak the truth.” And here is what the truth was in Kasyanov’s opinion. The main threat to the Russian economy is “unpredictability of actions of the authorities,” resulting in capital outflow. The government has left reforms, and postponed reforms underline the weakness of the most significant economic institutions. To provide an example Kasyanov used the “nonbanking crises” of last summer. He called the administrative reform “Comedy of disguise,” which led to expanding the field for applying pressure on business, especially in the area of taxes. Other problems, like loss of control over the inflation and increase of state interference in economy were also named. Most of the forum speakers supported Kasyanov in the last two points.
The ex Prime Minister’s conclusion was that the government needed a clear program of actions for the nearest future, which was supposed to return the presumption of innocence to the taxpayers, and to tame the inflation. Kommersant reporter asked Kasyanov whether the draft of mid-term program, prepared by German Gref, could be considered as such, and Kasyanov said that although Gref’s document was “normal,” the real need at this time was that measures should be applied immediately. And if the government continued to make profits on the oil prices, any economic growth could be soon forgotten.
The official representative of Russian government was Andrey Illarionov, who spoke before Kasyanov. His speech contained a number of optimistic moments. For instance: GDP per capita in the last six years has been growing by 7.2 percent per year, foreign debt has decreased to $110 billion, while there were $140 billion in the gold and currency reserves and $30 billion in the stabilization fund. However, Illarionov agreed with Kasyanov’s main point – the events of 2003-2004 (YUKOS) made Russia’s economic growth potential questionable. Illarinov thinks that in 2005, attempts to improve the economic climate in Russia have been made, although, the government’s economic activity was rather dangerous. He again compared Russia and Venezuela. The example was rather frightening – up to 1957 Venezuela was third after the United States and Switzerland by the GDP per capita. In 1957 Venezuela underwent nationalization of the oil sector, which had been previously controlled by foreign companies. As result, not the GDP per capita in Venezuela is 47 percent of what is was in 1957. In other words, Illarionov practically supplemented Kasyanov, demonstrating what awaits Russia, if today’s economic policy, characterized by widening of the area for spreading strategic fields and enterprises, where foreign investors are not allowed, will be continued.
Nikolay Vardul, London
All the Article in Russian as of Apr. 12, 2005
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