Connect with us

RussiaFeed

News

Economy

Putin’s State of the Nation address: charting a course for a modern Russia

Alexander Mercouris

Published

on

40 Views

Information about President Putin’s State of the Nation address is still coming through as I write this.

Most world attention has been on the various military developments which President Putin outlined.  Though these are dramatic enough the main focus of the address was on the domestic economy.  That is the part of the address I will discuss in this article.

(1) Increase in economic growth rates in the 2020s

President Putin has charted a very ambitious project of increasing per capita incomes in Russia by 50% by the mid 2020s ie. by roughly the end of his next term as President (assuming he is re-elected), which will be in 2024.

Since the government and the Central Bank forecast economic growth to continue to be low (less than 2% per year) up to 2020, that implies a very rapid increase in economic growth rates after 2020.

This is in fact consistent with the recent discussions of the state of the economy published by the Central Bank.

Briefly, the story of Putin’s third term with respect to the economy has been one of the Russian government sorting out various accumulated problems in the economy in order to prepare for a marked but sustained acceleration in the 2020s.

This has required:

(i) a very tight monetary policy to bring inflation down from its historic double digit annual level to the 2-4% annual range which it has achieved now;

(ii) hard work to improve the business climate, with the World Bank assessing that Russia’s ‘Ease of Doing Business’ rating has improved from 120th in the world in 2010 to 35th in the world now;

(iii) the introduction of a floating exchange rate for the rouble (achieved in 2014);

(iv) a steady clear up of the banking system, with a policy of closing down bad banks and consolidating the banking sector into a smaller number of strong banks; and

(v) a programme of fiscal consolidation, whereby the national budget is first balanced and then brought into surplus, with the share of oil and gas revenues further reduced, so that the deficit in the budget once oil and gas revenues are take out of account has already fallen from 15% of GDP in 2015 to 7% now, with plans to reduce it further, with the eventual intention of eliminating it entirely.

The Russian government and the Central Bank have explained that the primary reason for reducing and then eventually eliminating the ‘non-energy revenue’ deficit in the budget is so as to make the national budget invulnerable to falls in energy price movements..

These measures have been accompanied with further technical steps to strengthen the financial system, for example by introducing a Russian alternative to the SWIFT interbank payment system (which Russian officials have confirmed over the last few weeks is not merely ready but is actually operating), a Russian debit and credit card independent of Mastercard and Visa (the Mir card) and by the redirection of the Russian state’s borrowing from foreign to domestic sources (ie. towards ‘rouble bonds’ in place of eurobonds), with Russia however taking control of its own eurobond placements.

This period of sorting out the accumulated problems in the economy – some of which extend back to the late Brezhnev era of the mid to late 1970s – is now practically over, with the Russian government and the Central Bank expecting that the process will be concluded by 2020.

Thereafter, it is hoped that the hard work carried out over the period of Putin’s third term will finally bear fruit, with economic growth rates rising sharply, and doing so in a sustainable way.

Needless to say Putin touched on all of this in his speech, stressing that it is the achievement of macroeconomic stability in Russia that makes the very ambitious economic plans he outlined in his address possible

In the last few years, we have enhanced the sustainability of our economy. The dependence of the economy on hydrocarbon prices has been substantially reduced. We have increased our gold and currency reserves. Inflation has dropped to a record low level – just over two percent. Of course, we all understand that the growth of prices for many basic necessities is much higher. This should be strictly monitored by different agencies, including the Anti-Monopoly Service. But on the whole, this low inflation level creates additional opportunities for development. Let me remind you that quite recently, in 2015, inflation was almost 13 percent – 12.9 percent to be exact.

In effect, Russia has formed a new macroeconomic reality with low inflation and general economic sustainability. For the people this is a condition for real income growth and cheaper mortgage loans. For entrepreneurs it means predictability in business and cheaper loans. Business should also adapt to these new macroeconomic conditions. Finally, it makes it possible to attract long-term loans and private investment into large-scale infrastructure projects.

Now we have an opportunity, without speeding up inflation, and maintaining a careful and responsible approach, to gradually cut interest rates and make loans more affordable. I count on the support of the Bank of Russia in that, while making its decisions, implementing monetary policy measures and developing financial markets, it will work in contact with the Government in the interests of the common goal of creating a proper environment for increasing the economic growth rates.

The major driver of faster economic development will be higher investment and increased productivity, with the stable macroeconomic conditions making it possible to achieve at a sustained level a rate of investment in the economy the like of which it has never experienced in the post-Soviet period

Increased investment is the second source of growth. We have already set the task of bringing it up to 25 percent of the GDP, and then to 27 percent. Unfortunately, this goal has not been achieved yet. To ensure sustainable growth, we need to do so at all costs. I hope that the new Government in conjunction with the Bank of Russia will present a concrete plan of action in this area.

A recent study by the Russian Academy of Sciences has suggested that growth rates in the 2020s could be as high as 4-6% annually, which would certainly be necessary if the increase in per capita income by 50% that Putin is talking about by the mid 2020s is to be achieved.

In his State of the Nation address President Putin spoke of achieving this objective as a difficult one but as an attainable one, and spoke of his confidence in achieving it.

Russia must firmly assert itself among the five largest global economies, and its per-capita GDP must increase by 50 percent by the middle of the next decade. This is a very difficult task. I am confident that we are ready to accomplish it.

I would add that if Russia is able to achieve a growth rate of 4-6% in the 2020s then by the mid 2020s its GDP in purchasing power parity terms its economy will be substantially bigger than Germany’s (thus Putin’s comment about Russia “firmly asserting among the five largest global economies”) and by 2030 it could be close to overtaking – and might have actually overtaken – Japan’s.

At that point Russian living standards would also be at least comparable and possibly higher than living standards in most of Western Europe, with all the huge geopolitical implications that flow from that.

(2) Embrace of the Fourth Industrial Revolution

I have previously written about how Russia’s leaders believe that Russia is strategically exceptionally well placed to exploit the ‘Fourth Industrial Revolution’ and how they believe that it plays to Russia’s strengths.

President Putin has spoken about this repeatedly, and in his State of the Nation address he returned to it and discussed it at length

As I said in the past, the state’s role and positions in the modern world are not determined only or predominantly by natural resources or production capacities; the decisive role is played by the people, as well as conditions for every individual’s development, self-assertion and creativity. Therefore, everything hinges on efforts to preserve the people of Russia and to guarantee the prosperity of our citizens We must achieve a decisive breakthrough in this area.

I repeat, a solid foundation has been created for this. Therefore, we can now set and accomplish new tasks. We already have substantial experience in implementing ambitious programmes and social projects. The Russian economy has proved its resilience, and the current stable macro-economic situation opens up new opportunities for surging ahead and maintaining long-term growth.

Finally, the world is now accumulating a tremendous technological potential making it possible to achieve a real breakthrough in improving the people’s quality of life and modernising the economy, the infrastructure and state governance and administration. How effectively we will able to use the colossal potentialities of the technological revolution, and how we will respond to its challenges depends on us alone. In this sense, the next few years will prove decisive for the country’s future. I reiterate, these years will be decisive……

……today knowledge, technology and expertise make the most important competitive advantages. They are the key to a real breakthrough and improved quality of life.

As soon as possible, we need to develop a progressive legal framework and eliminate all barriers for the development and wide use of robotic equipment, artificial intelligence, unmanned vehicles, e-commerce and Big Data processing technology. And this legal framework must be continuously reviewed and be based on a flexible approach to each area and technology.

We have all the resources to promptly implement 5G and Internet of Things technologies.

We need to build our own digital platforms. It goes without saying that they should be compatible with the global information space. This would pave the way to reorganising manufacturing processes, financial services and logistics, including using blockchain technology, which is very important when it comes to financial transactions, property rights, etc. These initiatives have real-world application.

We need to start making or localising key technologies and solutions, including those used in developing the Arctic and the sea shelf, and building new energy, transport and urban infrastructure systems. This is also important in areas related to improving the quality of life, such as cutting-edge rehabilitation tools for people with disabilities.

It is our duty to support high-technology companies, offer start-ups a favourable environment and introduce new industrial solutions. I am talking about a user-friendly infrastructure, taxation systems, technical regulations and venture financing.

Technological development should be firmly rooted in fundamental research. Over the recent years, we have been able to expand research, and are now leading in a number of areas. The Russian Academy of Sciences and Russia’s leading research institutions made a major contribution to achieving this.

Building on the advances made in the preceding years, including in developing the research infrastructure, we need to take our research to a new level. Projects to build cutting-edge mega science research facilities are already underway in Gatchina and Dubna. The Council for Science and Education has adopted a decision recently to build a powerful synchrotron collider at the Novosibirsk Akademgorodok and a new generation collider in Protvino, Moscow Region.

With these facilities, Russia will become one of the world’s leading countries in terms of the capability and performance of its research infrastructure. These units will give a serious competitive edge to Russian research teams and high-technology companies, for example for developing new medications, materials and microelectronics.

Of course, this infrastructure and ambitious research projects will not fail to attract our compatriots and researchers from abroad. In this regard, we need to create a legal framework that would enable international research teams to operate in Russia.

Large research and education centres should begin working to full capacity. They will integrate the possibilities of universities, academic institutions, and high-tech companies. Such centres are already being set up in Kazan and Samara, Tomsk and Novosibirsk, Yekaterinburg and Tyumen, Vladivostok and Kaliningrad, and other cities.

It is important to focus them on the implementation of major interdisciplinary projects, including in such a promising field as genome research. A cardinal breakthrough in this area will pave the way to developing new methods for diagnosing, preventing and treating many diseases, and will expand the selection possibilities in agriculture.

We need to reinforce the superiority of the national mathematics school. It gives Russia a strong competitive edge in the age of digital economy. International mathematics centres will also provide platforms for such work. These are already operating in Kazan and Novosibirsk. Following the adopted decisions, we will open more in St Petersburg, Moscow and Sochi.

(bold italics added)

However this enthusiastic embrace of the Fourth Industrial Revolution comes with a sharp warning of what will happen if Russia fails to embrace it

What I will say now has no connection to the domestic political cycle or even the presidential election. No matter who is elected President, each Russian citizen and all of us together must be able to see what is going on in the world, what is happening around us, and what challenges we are facing.

The speed of technological progress is accelerating sharply. It is rising dramatically. Those who manage to ride this technological wave will surge far ahead. Those who fail to do this will be submerged and drown in this wave.

Technological lag and dependence translate into reduced security and economic opportunities of the country and, ultimately, the loss of its sovereignty. This is the way things stand now. The lag inevitably weakens and erodes the human potential. Because new jobs, modern companies and an attractive life will develop in other, more successful countries where educated and talented young people will go, thereby draining the society’s vital powers and development energy.

As I have said, changes concern the entire civilization, and the sheer scale of these changes calls for an equally powerful response. We are ready to provide it. We are ready for a genuine breakthrough.

My confidence is based on the results we have achieved together, even though they may seem modest at first glance, as well as on the unity of Russian society and, most importantly, on the huge potential of Russia and our talented and ingenious people.

In order to move forward and to develop dynamically, we must expand freedom in all spheres, strengthen democratic institutions, local governments, civil society institutions and courts, and also open the country to the world and to new ideas and initiatives.

It is high time we take a number of tough decisions that are long overdue. We need to get rid of anything that stands in the way of our development and prevents people from fully unleashing their potential. It is our obligation to focus all resources and summon all our strength and willpower in this daring effort that must yield results.

Otherwise, there will be no future for us, our children or our country. It is not a question of someone conquering or devastating our land. No, that is not the danger. The main threat and our main enemy is the fact that we are falling behind. If we are unable to reverse this trend, we will fall even further behind. This is like a serious chronic disease that steadily saps the energy from the body and destroys it from within step by step. Quite often, this destructive process goes unnoticed by the body.

We need to master creative power and boost development so that no obstacles prevent us from moving forward with confidence and independently. We must take ownership of our destiny

In other words, a failure by Russia to embrace the Fourth Industrial Revolution would put the whole future of the country and its independence at risk.

As Putin says, Russia has all the resources and potential it needs in order to embrace it successfully.  It would be an unforgivable disaster if it failed to do so.

At a more practical level, what embracing the Fourth Industrial Revolution requires is a sharp increase in funding for education and science, and this was indeed an important part of Putin’s address.

(3) Higher education and science spending

One of the most frequent criticisms of Putin which I hear from Russians is that education and science during his time in power have been neglected, with some Russians making unfavourable comparisons with the high priority education and science were accorded during the Soviet era.

There is some force to this argument, though in my opinion it underestimates the pressure on Putin’s government in determining priorities.

Now that macroeconomic stability is close to being achieved Putin clearly recognises the need to accord more budget spending to education and science and his comments about this were lengthy and detailed

International experts agree that Russia has one of the best primary school systems in the world. We will keep up our proactive efforts to develop general education at all levels. Let me emphasise that every child should have access to a quality education. Equal educational opportunities are a powerful driver in terms of promoting national development and social justice.

We need to shift to completely new education methods, including personalised learning, in order to cultivate in our children a readiness for change and creative curiosity, and teach them to work in teams, which is very important in the modern world, and other life skills applicable to the digital era. We will absolutely support talented teachers who are motivated to pursue continuous professional growth. And, of course, we need to build an open and modern system for school management selection and training. School administrators are the ones in charge of building a strong faculty and productive morale.

We will continue to enhance the comprehensive system to support and develop our children’s creative skills and talents. This system must extend to the entire country and incorporate the resources of such projects as Sirius and Quantorium, as well as extracurricular education centres and children’s creative centres all over Russia.

We need to build a modern career guidance system where schools partner with universities, research groups and successful companies. I propose starting a new early career guidance programme for schoolchildren, Ticket to the Future, from the next academic year. The programme will allow kids to try out real jobs in major Russian companies. We will allocate 1 billion rubles for this project this year alone…..

Technological development should be firmly rooted in fundamental research. Over the recent years, we have been able to expand research, and are now leading in a number of areas. The Russian Academy of Sciences and Russia’s leading research institutions made a major contribution to achieving this.

Building on the advances made in the preceding years, including in developing the research infrastructure, we need to take our research to a new level. Projects to build cutting-edge mega science research facilities are already underway in Gatchina and Dubna. The Council for Science and Education has adopted a decision recently to build a powerful synchrotron collider at the Novosibirsk Akademgorodok and a new generation collider in Protvino, Moscow Region.

With these facilities, Russia will become one of the world’s leading countries in terms of the capability and performance of its research infrastructure. These units will give a serious competitive edge to Russian research teams and high-technology companies, for example for developing new medications, materials and microelectronics.

Of course, this infrastructure and ambitious research projects will not fail to attract our compatriots and researchers from abroad. In this regard, we need to create a legal framework that would enable international research teams to operate in Russia.

Large research and education centres should begin working to full capacity. They will integrate the possibilities of universities, academic institutions, and high-tech companies. Such centres are already being set up in Kazan and Samara, Tomsk and Novosibirsk, Yekaterinburg and Tyumen, Vladivostok and Kaliningrad, and other cities.

It is important to focus them on the implementation of major interdisciplinary projects, including in such a promising field as genome research. A cardinal breakthrough in this area will pave the way to developing new methods for diagnosing, preventing and treating many diseases, and will expand the selection possibilities in agriculture.

We need to reinforce the superiority of the national mathematics school. It gives Russia a strong competitive edge in the age of digital economy. International mathematics centres will also provide platforms for such work. These are already operating in Kazan and Novosibirsk. Following the adopted decisions, we will open more in St Petersburg, Moscow and Sochi.

The one point I would make about these plans for higher education and science spending is that they do appear very narrowly focused on turning out more technically qualified workers for the economy.  There is nothing said at all about the humanities, and very little about culture.

I have commented in the past about how the one important constituency in Russia that Putin fails to reach is its large, very articulate and at times absurdly self-important cultural intelligentsia.  This despite the fact that his government provides heavy subsidies to Russian cinema and theatre, and – as he touched on in his address – is actively engaged in museum building.

In my opinion this resentment of the cultural intelligentsia towards Putin is in part the result of his lack of engagement with them, of which his failure to speak about them in his State of the Nation address is another example.

(4) Faster house building

Before discussing this topic, I should say that in my opinion one of the greatest causes of the underestimation of Russia’s GDP relative to those of other developed economies is the undervaluation of Russia’s large and rapidly growing housing stock.

The average price of a home in London is now $680,000, and $300,000 in the Britain as a whole.  Though comparisons with Russia are difficult, with Russians tending to value properties by the cost per metre rather than by the cost per unit, during a recent trip to Moscow I heard that the price of what I suspect was a higher end property in a suburb of Moscow – Russia’s capital and richest city – was below $200,000.

I suspect that high prices in Russia outside Moscow are significantly lower, save in St. Petersburg where a market in luxury homes is apparently emerging, driven it seems mainly by foreign buyers.

Anyway Putin had much to say about the need to increase Russia’s housing stock, with the emphasis in his address being on affordable ie. low end housing

In 2017, three million families in Russia improved their living conditions. Now we need to reach a stable level (I emphasise this: it is the first time in the history of modern Russia) – to a level where at least five million families improve their housing conditions annually. This is a difficult task – to jump from three million to five. We reached 3.1 million last year, but we need to make it five. Yet, it is an attainable goal.

I see three key factors for increasing the affordability of housing. The first is the growth of people’s incomes. I have spoken about this in the past, and we must ensure this. Next, a decrease in mortgage interest rates and, of course, an increased supply in the housing market.

I would like to remind you of something that few people remember, which is that only 4,000 mortgage loans were issued in 2001. Only 4,000. The interest rate was as high as 30 percent, including on foreign currency loans. By the way, half of the mortgage loans were issued in foreign currency. Few people could afford to take out mortgage loans then. Last year, the number of mortgage loans almost reached one million. In December, the average interest rate on ruble loans for the first time decreased to below 10 percent.

We know, of course, that loan terms are individual and may differ from one borrower to another. But we must continue to lower the average interest rate to 7–8 percent. We held long discussions on the figure I should say here. I am sure that the target figure should be 7 percent. In the next six years, mortgage loans must become accessible to the majority of Russian families, working people and young professionals.

Here are some more figures. In the 1950s through 1970s, we annually built approximately 60 million square metres of housing a year. The figure rose to 70 million by the late 1990s. Now we annually build around 80 million square metres of housing every year. We built even more housing in some years, but the average figure is 80 million. We must move forward and reach new heights in this sphere, that is, increase the volume of housing built every year from 80 million to 120 million square metres. This is an ambitious but realistic goal, given new technologies, the experience our construction companies have accumulated, as well as new materials. The rise from 80 to 120 million square metres is what we need and can achieve. I will tell you why: if we want 5 million families to receive new housing every year, we must reach the figure of 120 million square metres.

Those who invest their money in housing projects must be securely protected. We should gradually proceed from unit construction to project financing, when developers and banks, but not people, shoulder the risks.

This is a hugely ambitious housing programme, setting out to improve the housing conditions of five million Russian families each year.

To someone who lives in Britain, where just 184,000 homes were built in England last year (around half the peak levels achieved in the mid 1930s and the mid 1960s) these are staggering figures.

In my experience there is no single more important measure for most people – especially middle and lower income people – when they assess their standard of living than the state of their housing.  If Putin can achieve his target of improving the housing conditions of five million Russian families each year, then he will have made more Russians feel better off each year than any set of statistics can show.

I would add – though Putin did not mention the fact – that the rapid and continuing growth of mortgage lending since 2000 which Putin is referring to in these comments not only shows the immeasurably greater sophistication of the financial system since 2000.  It also greatly strengthens the financial system by providing it with a bedrock of secure mortgage assets which it can leverage in order to make possible higher investment lending.

Obviously this has to be watched closely to avoid the situation which has repeatedly arisen in the US and Britain, where mortgage borrowers repeatedly become over-borrowed, and where excessively low interest rates cause banks to lend to mortgage borrowers in preference to the more productive side of the economy.

However Putin’s comments show that he is aware of this danger, and I would add that the Russian government and the Central Bank’s policy of keeping interest rates positive (ie. higher than the rate of inflation) should allay it anyway.

(5) An infrastructure programme for Russia

In my opinion the single biggest constraint on economic growth in Russia are not the often mentioned ones of corruption, excessive state involvement in the economy, and opacity of laws.  Other economies where these problems arise (and for the record I question whether state involvement in the economy is necessarily a “problem”) have thrived economically despite them.

The single biggest constraint on economic growth in Russia is rather in my opinion the country’s underdeveloped transport and communications infrastructure, which is simply inadequate for such a huge country.

By contrast a visit to China last summer impressed on me the enormous spur to economic growth that China’s massive investment in infrastructure has provided to the Chinese economy.

It would be untrue to say that there have been no improvements to Russia’s communications and transport infrastructure during the Putin era.

The single biggest change – and one whose social importance quite simply cannot be overstated – is that for the first time in Russia’s history the entire population is connected by telephone, with almost 50% of the population now having continuous access to the internet and with more than 70% saying they use the internet regularly, as compared with only 25% who used the internet regularly in 2008.

This in a country where in the 1980s only 20% of the population had personal telephones (though the percentage was much higher in Leningrad and Moscow).

Russia has also witnessed a significant increase in road building and railway construction during the Putin era, and as Putin commented on in his State of the Union address, there has also been a drastic upgrade in the cargo handling capacity of Russia’s port

In 1990, the ports of the Soviet Union had an aggregate capacity of 600 million tonnes, but after the country broke apart, we lost almost half. In the early 2000s, Russian ports could handle only 300 million tonnes. Over the last 17 years, this figure has tripled. In early 2017, the aggregate port capacity in Russia exceeded 1 billion tonnes for the first time in history. As you can see from the charts, this exceeds the level reached by the Soviet Union by more than two thirds. By the way, these are the figures for early 2017, and the capacity currently stands at 1,025 billion tonnes.

Even before today’s State of the Union address the sums allocated for infrastructure development in Russia are staggering

The government is pumping vast amounts of cash into upgrading Russia’s existing ports, railways and roads, or building new sites. By 2030, it is estimated Russia will have spent a monumental $969 billion on infrastructure projects. Over 325 such developments are in the pipeline, helping provide a stronger environment for transport and logistics……

In 2017, Russian Railways (RZA), Russia’s national rail operator, plans to take supply of roughly one million tons of new track. This goes to show the titanic scale of Russia’s rail construction ambitions. By 2030, some $464.2 billion will have been pumped into building fresh railways or existing facility enhancement….

Roads are something of a priority for Russia. Due to its sheer size, the nation needs rugged highways and roads to keep people and goods flowing freely. Over $548 billion has been allocated towards for construction of roads in rural areas, whereas Moscow’s ring road is looking at $1.5 billion in reconstruction investment.

Over 1,000 kilometres of new roads are planned for 2020. 36 individual construction projects, featuring new bridges, are to be implemented before 2030 too, suggesting Russia’s road network will be greatly expanded making road transport an easier, cheaper prospect.

It seems from what Putin said today that the tempo of infrastructure spending is to be increased still further

Overall, in the next six years, we must almost double the spending on road construction and repairs in Russia and to allocate more than 11 trillion roubles for this from all sources. This is a lot; keep in mind that we have allocated 6.4 trillion rubles in 2012–2017, but we need 11 trillion (ie. $193 billion for further road building and repairs over six years – AM)…….

The volume of transit shipments on our railways must grow almost fourfold. This means that Russia will become a global leader in transit shipping between Europe and Asia…..

The Northern Sea Route will be the key to developing the Russian Arctic and Far East. By 2025, cargo traffic along this route will surge tenfold to 80 million tonnes. Our goal is to make it a truly global and competitive transport route. Let me remind you that the Northern Sea Route was used more actively in Soviet times compared to how we have been using it so far. We will definitely develop this route and reach new horizons. I have no doubt about it……

We will renovate and expand the network of regional airports across Russia. In six years, half of the regions will be connected between each other by direct flights. The situation where you had to make a connection in Moscow when flying to a neighbouring region will become a thing of the past. We are already working on this. This includes efforts to develop aviation and airports.

…….we must introduce new technologies for the generation, storage and relay of energy. In the next six years, we plan to attract some 1.5 trillion rubles in private investment for modernising our power generation sector. All power systems throughout the country must convert to digital technology. We must use the so-called distributed generation method to supply electricity to remote areas.

By 2024, high-speed internet will be available throughout the country. We will complete the construction of fibre optic lines in the majority of populated areas with a population of more than 250 people. Small remote towns in the Extreme North, Siberia and the Russian Far East will access internet via a network of Russian satellites.

We will use advanced telecommunications to give our people access to the digital world. As we know, this is more than just modern services, online education and telemedicine, although all this is very important. More than that, people will be able to use digital space to conduct research, organise volunteer and project groups or run companies. In our vast country, this combination of talent, competencies and ideas amounts to a huge ground-breaking resource…..

Though Putin did not specifically mention the fact, it is clear that this huge infrastructure programme dovetails closely with Xi Jinping’s One Belt, One Road programme

Large Eurasian transport corridors will also be developing. An automobile road that will become part of the Europe – Asia-Pacific corridor is already under construction. Our Chinese and Kazakhstani partners involved in this project together with us have already completed their part. Their sections have already been opened, so we need to speed up our work…..

The volume of transit shipments on our railways must grow almost fourfold. This means that Russia will become a global leader in transit shipping between Europe and Asia…..

Russia must not just become the world’s key logistics and transport hub, but also, which is very important, a global centre for the storage, processing, transfer and reliable protection of large volumes of information, so-called big data.

Overall, infrastructure development must take into account global technological changes. In other words, the projects we are now considering must include practical solutions for combining infrastructure with drones and digital marine and air navigation, as well as use AI to streamline logistics.

There has been much criticism in the Western media not just of Putin’s decision to stand again as Russia’s President but of China’s pending decision to end term limits for its President, enabling Xi Jinping to continue as China’s President beyond his second term.

In my opinion these are not vanity decisions by two insecure and power crazed autocrats as the Western media represents them.

Rather they are joint decisions agreed by the two men and their respective leadership in order to guarantee that the massively ambitious ‘Greater Eurasia’ project which they have jointly sponsored – linking together China and Europe by a gigantic series of road, rail and maritime links constructed across mainly Russia – will be brought into effect.

As to the scale of Russia’s infrastructure programme, its scale of $1 trillion can be compared with $1.5 trillion allocated to President Trump’s infrastructure plan.

There is much talk in the US of how President Trump’s infrastructure plan is utopian.  Unlike President Trump’s plan President Putin’s plan is already being carried out, and already has results to show.  Yet in a much smaller economy it is two thirds the size of President Trump’s supposedly utopian plan.

Will it all happen?

These are very ambitious plans, and there is no guarantee of their fulfilment.  Much could go wrong.

However a starting point is President Putin’s record.  In the 18 years he has been Russia’s leader Russia has transformed.  To assume that it cannot continue to make progress is – depending on one’s perspective – unduly pessimistic or unduly complacent.

As President Putin pointed out in his speech, Russia now possesses the macroeconomic stability and the resources to make change happen.  Provided political stability is maintained, there is no reason why it should not.

Liked it? Take a second to support The Duran on Patreon!
Advertisement
Click to comment

Leave a Reply

avatar
  Subscribe  
Notify of

Latest

Second group of Su-57 stealth fighters to be requested in 2020

The second Su-57 contract will feature fighters with the advanced engine design that was under development while the prototypes were made.

Seraphim Hanisch

Published

on

The contract for a second order of Russian Su-57 stealth fighters is expected to be signed in 2020, according to an unnamed source in Russia’s aircraft-making industry. TASS, the Russian News Agency, reported on this on Wednesday, 16 January:

The second contract to manufacture 13 Su-57 fighter jets for the Russian Aerospace Forces is to be signed next year, a source in Russia’s aircraft-making industry told TASS on Wednesday.

“In 2020, we plan to sign the second contract to manufacture and deliver 13 Su-57 fighter jets, some of them equipped with the second-stage engines,” he said. “The preliminary timeframe for the new contract is five years.”

The first contract envisages the delivery of two fifth-generation aircraft in 2019-2020.

“In line with the contract signed in 2018, one serial Su-57 jet with first-stage engines will be delivered to the Aerospace Forces this year, the other aircraft featuring the same type of engine – in 2020.”

The aircraft’s manufacturer, the United Aircraft Corporation, refrained from commenting on the report.

The Su-57 is a fifth-generation multirole fighter designed to destroy all types of air targets at long and short ranges and hit enemy ground and naval targets, overcoming its air defense capabilities.

The Su-57 took to the skies for the first time on January 29, 2010. Compared to its predecessors, the Su-57 combines the functions of an attack plane and a fighter jet while the use of composite materials and innovation technologies and the fighter’s aerodynamic configuration ensure the low level of radar and infrared signature.

The aircraft has been successfully tested in Syria.

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

Latest

Kaspersky Lab snags former NSA contractor stealing hacking tools

Semi-buried article did see publication on Politico and Fox News, but Kaspersky Lab was not vindicated for its help in solving this case.

Seraphim Hanisch

Published

on

In a time known for Smear Campaigns of the Strangest Kind, we have seen Russia blamed for being there, for interfering and preventing the election of Hillary Rodham Clinton to the Presidency, putting Donald Trump in the White House instead. One of Russia’s companies, Kaspersky Lab, has a particularly notable history of late; that is to say, this computer security company has found itself on the receiving end of quite frankly, illegal levels of slander and punishment without cause from the US government. Kaspersky Lab owner and CEO tried very hard to come to the US to discuss these matters with a Congressional committee, only to have the meeting shelved into limbo.

However, the truth made itself manifest when it became known that Kaspersky Lab actually helped the American FBI catch Harold T. Martin III, who was found to be attempting to steal some of the American government’s most sensitive hacking tools. This fact emerged on Wednesday, January 9, 2019, when sources familiar with this investigation spoke to The Politico magazine. Politico says the following in its report:

[Kaspersky Lab’s] role in exposing Martin is a remarkable twist in an increasingly bizarre case that is believed to be the largest breach of classified material in U.S. history.

It indicates that the government’s own internal monitoring systems and investigators had little to do with catching Martin, who prosecutors say took home an estimated 50 terabytes of data from the NSA and other government offices over a two-decade period, including some of the NSA’s most sophisticated and sensitive hacking tools.

The revelation also introduces an ironic turn in the negative narrative the U.S. government has woven about the Russian company in recent years.

Under both the Obama and Trump administrations, officials have accused the company of colluding with Russian intelligence to steal and expose classified NSA tools, and in 2016 the FBI engaged in an aggressive behind-the-scenes campaign to discredit the company and get its software banned from U.S. government computers on national security grounds. But even while the FBI was doing this, the Russian firm was tipping off the bureau to an alleged intelligence thief in the government’s own midst.

“It’s irony piled on irony that people who worked at Kaspersky, who were already in the sights of the U.S. intelligence community, disclosed to them that they had this problem,” said Stewart Baker, general counsel for the NSA in the 1990s and a current partner at Steptoe and Johnson. It’s also discouraging, he noted, that the NSA apparently still hasn’t “figured out a good way to find unreliable employees who are mishandling some of their most sensitive stuff.”

The Politico piece as well as Fox News’ variant still seem somewhat determined to keep that negative narrative in place, with Fox assessing that the FBI had a “strange bedfellow” in the investigation, and what appears to be an absolutely enormous presumption in Politico’s piece:

The first message sent on Aug. 13, 2016, asked one of the researchers to arrange a conversation with “Yevgeny” — presumably Kaspersky Lab CEO Eugene Kaspersky, whose given name is Yevgeny Kaspersky. The message didn’t indicate the reason for the conversation or the topic, but a second message following right afterward said, “Shelf life, three weeks,” suggesting the request, or the reason for it, would be relevant for a limited time.

However, there are many people in the world named “Yevgeny” (Evgeny, or Eugene) in Russia, and presumably many Evgenys in Kaspersky Lab itself. The notion that the CEO of the company would be involved in this appears to be an absolutely enormous leap of logic.

The maintenance of a negative narrative about Kaspersky Lab has been one of the most frustratingly effective examples of American propaganda in use since Russia overall became increasingly used as America’s newest scapegoat.

This is also not the first time that Kaspersky Lab saved the day for an American intelligence agency. In 2017 the same company’s services found 122 viruses on an NSA employee’s computer.

Kaspersky Lab itself is a highly sophisticated company based in Moscow, Russia, specializing in securing computers against malware, viruses, ransomware and all manner of invasive efforts by the bad guys out on the ‘Net, and among the providers of such services it consistently rates among the best in the industry, including in US surveys. While US retailers Best Buy, Office Depot and the US government have banned selling or running Kaspersky Lab software, European allies of the US have not even breathed the slightest bit of discontent with the AV provider. The narrative is the only thing that is actually wrong, and since Evgeny Kaspersky’s education was largely at the Academy that trained former KGB personnel, (now called FSB), the anti-Russia narrative in the US the acronym “KGB” is usually enough to alarm most low-information American news readers and watchers. 

However, logic and awareness of life in modern Russia, point to the fact that getting an education on security at the FSB Academy ought to be equivalent to the same education at the CIA. Who would know better about how to create security than those people specially trained to compromise it? However the propaganda vantage point that Kaspersky afforded the US government in its drive to get rid of President Donald Trump made the Russian company too juicy a target to ignore.

Over the last year or two, however, this narrative has slowly been falling apart, with this Politico article being a significant, though still small vindication of the company’s prowess and abilities.

That a Russian Internet Security company could succeed where American enterprises failed, and especially where it helped the Americans catch a man who was stealing very powerful hacking tools, is a significant story, indeed.

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

Latest

Russia’s court jester that tells the truth: Meet Vladimir Zhirinovsky [Video]

While Mr. Zhirinovksy failed in his presidential run, this man is unafraid to speak truth to power. He has done this in Russia for years.

Seraphim Hanisch

Published

on

The ancient tradition of court jester is not dead in the world. In Russia it is manifest in the person of Vladimir Volfovich Zhirinovsky, the leader of the Liberal Democrat Party of the Russian Federation. This man is Russia’s answer to the legendary late comedian Rodney Dangerfield, with his famous “I get no respect at all” shtick. However, Mr. Zhirinovsky does his act in full view of Russian President Vladimir Putin, Metropolitan Tikhon Shevkunov and others who are extremely important in the government of Russia.

His “jestering” is often utilized by the government because he has a way of presenting information that other people are reluctant to talk about in such company as the Russian President, and so among Russians he has earned this reputation as a court Jester to President Putin. However, like some jesters have done in history, this affords Mr. Zhirinovsky the unique ability to speak very freely and directly about all manner of topics. Wikipedia refers to him thus:

He is fiercely nationalist and has been described as “a showman of Russian politics, blending populist and nationalist rhetoric, anti-Western invective and a brash, confrontational style”.[1] His views have sometimes been described by western media as fascist.

In this video, just released by VESTI News, the fiery politician made his first major appearance since the 2018 Presidential elections, and he spoke about his views on foreign policy, not only of Russia, but of the United States, China and the rest of the world. What he had to say is nothing less than fascinating:

Some of the more salient points:

[00:15] – Nobody knows how to go on across the whole planet. The age of empires is over.

[00:40] – The US became the sole ruler of the world after 1991, but that time is over. It is neither willing nor able to remain the sole ruler.

[01:00] – North Korea became a nuclear power, able to negotiate on even terms with the US, though it is very small

[01:20] – The Middle East is following a relatively peaceful (!) scenario, tending toward peace.

[01:40] – China has unleashed its full potential, but it doesn’t know what to do next. China knows it could be on top but it isn’t because it doesn’t know what to do with such power, and the US is visibly having problems with such a role.

[02:13] – Ukraine is the nastiest problem. Zhirinovksy predicts they will become more fascist over time, and eventually will “Balkanize” into separate countries.

[03:11] – He goes on to point out how the Russian “elite” who is essentially pro-Western, have essentially sold Russia out, but in so doing, they have lost their happiness because the West used them to punish Russia.

Mr. Zhirinovsky does not stop here. He actually discusses a common phenomenon among the Russian “elites” which is that they often take citizenship in other countries, such as England, Germany and even the United States. Their children attend fine European schools. Yet they keep their Russian citizenship as well. When the Western powers started leveling more and more sanctions against Russia, sometimes it was these elites who took the brunt of the hit. For Mr. Zhirinovsky, Russia’s response should be to strengthen, to let the West know that Russia will never be on the same side as the West, nor will it ever become part of the Western world.

No doubt the Western press, if it picks this story up, will lift this sort of rhetoric out of context, taking it as a “sure sign” that Russia is trying to take over the world. To that end they would refer to Mr. Zhirinovsky’s hopes of Russia stretching from the Mediterranean to the Indian Oceans, and say that this “fascist” leader wants Russia to do something similar to what the West charges President Putin of wanting.

However, this is not exactly the gloom and doom scenario Zhirinovsky envisions. As one continues to watch the video clip there is history, viewpoint and a stunning assessment that excessive focus on capitalist notions like wages, taxes and salaries is a source of great unhappiness in Russia. Far from focusing on “progress” as merely economic development of free markets, Mr. Zhirinovsky goes a different direction, pointing out although the monarchy cannot be restored to Russia, there are elements of it that Russia might call on to get to a better place.

A deeper study of Mr. Zhirinovsky’s context reveals some interesting features that even made it to Wikipedia’s pages in English. We include a few select points that appear interesting:

Zhirinovsky has expressed admiration for the 1996 United States presidential election contender Pat Buchanan, referring positively to a comment in which Buchanan labeled the United States Congress “Israeli-occupied territory.” Zhirinovsky said that both countries were “under occupation.” and that “to survive, we could set aside places on U.S. and Russian territories to deport this small but troublesome tribe.” Buchanan strongly rejected this endorsement, saying he would provide safe haven to persecuted minorities if Zhirinovsky were ever elected Russia’s president, eliciting a harsh response by Zhirinovsky: “You soiled your pants as soon as you got my congratulations. Who are you afraid of: Zionists?”

Zhirinovsky has Israeli relatives, including his uncle and cousin, [and]… [he] has led a number of official Russian delegations to Israel, on behalf of the Russian government. Visiting Israel, he says that he is concerned particularly about the economic situation for the more than one million Russians living in Israel. He also states that “Russia will never allow any kind of violence against Israel.”

Besides expressing his concern for Turks and Caucasians displacing the Russian population from their settled territory, Zhirinovsky also advocated for all Chinese and Japanese to be deported from the Russian Far East. During his 1992 visit to the United States, Zhirinovsky called on television “for the preservation of the white race” and warned that the white Americans were in danger of turning their country over to black and Hispanic people.

In 2004, Zhirinovsky spoke at the City Court of Saint Petersburg, in reference to the assassination of Galina Starovoytova. After accusing Starovoytova of having worked for foreign intelligence, he said “I have always said openly that for democrats of pro-Western orientation there are only three roads: prison, the grave, and emigration.”

In August 2016, Zhirinovsky prayed for the Republican presidential election nominee, Donald Trump, whose antics were similar to Zhirinovsky’s but different in backgrounds, to defeat Hillary Clinton, whom he considered dangerous, in order to take his party’s ideology global. He also expressed his desire to test his DNA to determine whether he and Trump were related. In April 2017, Zhirinovsky promised to drink the champagne for Donald Trump’s impeachment, saying: “A half of Americans voted for different foreign policies. Trump breaks his promises, and if he continues breaking them, his impeachment is inevitable.”

The Last Break Southward (1995) is the magnum opus of Zhirinovsky in which he expressed his worldview. “Since the 1980s, I have elaborated a geopolitical conception—the last break southward, Russia’s reach to the shores of the Indian Ocean and the Mediterranean.” This is “really the solution for the salvation of the Russian nation … It solves all problems and we gain tranquility.” Russia will rule the space “from Kabul to Istanbul…” The “bells of the Orthodox Church must [ring] from the Mediterranean to the Indian Ocean.” And Jerusalem becomes close. It is necessary that “the Christian world reunifies in Jerusalem.” The Palestinian problem can be solved by partial transfer of the Palestinian population to the former territories of Turkey and Iran. The great Russian language and Russian ruble would wield Near Eastern and Central Asian peoples into one Russian citizenship.

Along the Russia southern sphere from India to Bosporus, other spheres of influence will stretch from north to south in the forthcoming world order, Latin America would be in the American sphere, Africa in the European sphere, and Japan and China will rule Southeast Asia, Indonesia and Australia. Everywhere “the direction is the same—north-south. “Geopolitically, it is logical. “Hence, the distribution along such a geopolitical formula would be very beneficent for the whole of humanity, and all over the planet would be established warm and clear political climate.”

But his talk in the video makes another stunning point: The spirit of the Monarchy must be returned, rather than thoughts only of wages, spending and taxes. “We must restore the sanctity of power”, says Zhirinovsky, and this is a radical departure from the viewpoint of market economics such as is held in the West.

There is much about the rhetoric of Mr. Zhirinovsky that would, at first and even second glance, would alarm readers schooled in the Western way of viewing the world. But this is also the function of the court jester in motion. Mr. Zhirinovsky has never earned more than about 9.5% of the vote for any of Russia’s recent Presidential elections and he earned only 5.65% in the most recent 2018 election, probably because he dug into a nasty row against the supremely unqualified but nonetheless female candidate Ksenia Sobchak in debate.

However, his function is no less important. In listening to and reading his works, such as “The Great Break Southward”, there are salient points that he has made in the past that turn out to be true. The Jester was able to speak such truth to power and remain unassailed, and yet, this ability does help get people to think.

 

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

JOIN OUR YOUTUBE CHANNEL

Your donations make all the difference. Together we can expose fake news lies and deliver truth.

Amount to donate in USD$:

5 100

Validating payment information...
Waiting for PayPal...
Validating payment information...
Waiting for PayPal...
Advertisement

Advertisement

Quick Donate

The Duran
EURO
DONATE
Donate a quick 10 spot!
Advertisement
Advertisement

Advertisement

The Duran Newsletter

Trending