Tuesday, May 19, 2015

Escaping the Empire: The Putin Economic Model

How to build a bulwark ‘gainst the banksters and their ilk:

 . . .

Modern Russia is a normal European country, with a rising
standard of living, now the sixth largest economy in the world, just above Canada and almost the same as Britain.
Putin came into office on New Years 1999-2000 with an
agenda. It was the radical proposition that Russian interests
should be considered equal to American. “Heresy” was
shouted from Harvard, where hippy peaceniks suddenly
were demanding a mass invasion of Russia and China,
preferably at the same time. Cooler heads prevailed. Of
course, they believe that only weak states that no one
knows really anything about should be invaded, because:
a) they won’t put up a fight; b) have no nuclear weapons;
and c) their obscurity means that the media can say anything
about them and it will be believed.

So, why are Putin’s popularity ratings still at 85-90%,
even after 15 years?

First, 1992. The Yeltsin regime, bossed around by the
United States, abolished the export duty on petroleum
products. In August 1999, Yeltsin appointed Putin prime
minister and Putin’s government in September increased
the duty to 7.5 euros per ton, and from Dec. 8, to 15 euros
per ton. Later on, the duty only increased, but still, against
all the “free market” hacks, oil is now exporting at about
50% of its 1995 price.

Two, Russia in terms of retail auto sales is ahead of
Spain, ranking fifth in Europe after Germany, the United
Kingdom, Italy and France. All this is a consequence of the
increase in demand, and therefore income growth. This is
a completely objective factor and it is a consequence of the economic policy pursued by Putin and nothing else. In
Asia, Russian autos are in high demand.

Third, for 10 years as a whole, the budget for social programs
(desperately needed) increased by 30% yearly. Pensions
were below the poverty line by 25% under Yeltsin.
Now, they are more than 50% above this line and are increasing.

Fourth, Putin nationalized Yukos Oil even as Michael
Khodorkovsky tried to sell it to Exxon-Mobil. When
Khodorkovsky was jailed, Russia cheered. Only hanging
him would have made Putin more popular. After that, tax
collection increased massively from all businesses fearful
of ending up like Khodorkovsky. It was nothing short of a
miracle that has never occurred before. Sending a few people
to prison made Putin so popular that the name
“Vladimir” tripled in popularity among newborn boys.
Putin massively increased tax revenue so that even arrears
were covered. Putin proved the “free market” wrong again
and, thus, revived the state. This all had a snowball effect
that no one predicted—except Aleksandr Solzhenitsyn.
Unfortunately, no one in the United States was listening.

Fifth, in 2004, in a little-discussed move, Putin finally
abolished the law called the “Production Sharing Agreement.”
Under this law, Russian deposits of natural resources
were under “international” jurisdiction. That
meant that British Petroleum and Exxon controlled Russian
natural resources de facto. The death threats poured in. Apparently, this only increased Putin’s popularity. Suddenly,
a whole bunch of people no one in the world ever
heard of before were being paraded in front of Western TV
screens as “dissidents.” Now, we know why. Russian oil
was not benefiting Russians at all, but had been going to
the accounts of foreign banks and oil companies. The
money from oil production was primarily going to the
British-Dutch company Shell. Putin was condemned as
being “against the free market” on these grounds. Putin
stated simply that Russian resources belong to Russia.
Now, that commonsense statement was Putin’s death sentence. Unfortunately, carrying it out has been difficult.

After the liquidation of this ill-advised agreement, the
Russian national budget increased by 300-400% almost instantly.
Putin was ostracized by the entire Anglo-Saxon
world, but Germany and France saw a winner and bet on
Putin and Russia. Putin was tagged by Russians as the
leader of the “National Revolution” as his simple agenda
went against the system created by the Americans.

Sixth, he eliminated the influence of the West on most
political processes. In 1992-1995, the Russian state apparatus
was created by foreign advisers.
All legislation in Russia from the
1990s, including tax laws, was written
from foreign grants. In total, 10,000
foreign advisers were working in
Russian ministries and departments,
including all economic centers, both
public and private.

The “sponsorship assistance” of
the Soros Fund created school history
textbooks, in which the battle of Stalingrad
received two pages, yet U.S.
presidents were mentioned far more
than Peter the Great or Nicholas II. Russian students were
given notebooks with portraits of four American presidents
on the last page. It’s true. I’ve seen them.

Seventh, Putin ended the war in the Caucasus, with the
separatists destroyed and all, more or less, of the well known
militant leaders eliminated. Separatism died out
naturally, but only when the Chechen elite felt the power of
Moscow and the benefits of cooperation with a huge and
growing market. Attempts by Western intelligence agencies
to feed anti-Russian hatred led to more specific attacks
on targets, but this is the maximum that can be
expected. The war was and is no more.

Eighth, Putin’s economic policy has been designed
against debt bondage. Under Putin, Russia significantly increased
the volume of the economy focused on the elimination
of poverty, raised real incomes, and created
reserves that now allow the country to pass through crises
with minimal losses of the standard of living. Moreover, in
the midst of the 2007 crisis, Russia was able to significantly
increase pensions and other social benefits.

The Russian constitution is written in such a way that
the president does not fundamentally affect everything that
happens in the state. Omnipotent power is nowhere to be
found and, now, impossible. This logic is used against Putin
to criticize him, but does not exist where the economy is
concerned. The work was done by Russians; Putin only
made the fruits of labor more secure. He proved that Russians were
nationalists at heart, and would support any policy
that put their interests first. It was not that hard to do.

So what do we have?

Foreign exchange reserves at the end of February 2011
were at $487 billion in gold—third in the world. This is
4,000% higher than in 1999, when Russian gold reserves
were at $12 billion. Russia today has approximately the
same gold reserves as the European Union.

Public external debt in 1999 stood at $138 billion, or
78% of GDP. By January 2010, it decreased by 3,400% and
now is $40.7 billion, or 2.75% of GDP. Inflation in 1999 hit
36.5%, while inflation in 2010 was 8.8%.

The Foreign Direct Investment total in 2010 was at
$114.7 billion. In comparison, FDI in China’s economy in
2010 amounted to $105.7 billion—or
$79 per capita compared to $98 for
every Russian soul.

Average life expectancy for women
has increased by 2.5 years up to
almost 75 years, and has already exceeded
the highest figure in Russian
history, which was 74.3 years in 1990.
The death rate from accidental alcohol
poisoning in 2003 was recorded at
45,045 cases, but dropped in 2010
To 14,381 cases. The birth rate in 2010
was 12.6 children per 1,000 inhabitants—
41% more than in 2000.

 . . .

Source:  Father Matthew Raphael Johnson, ‘Vladimir Putin: Russia’s Deliverer’, The Barnes Review, March/April 2015, XXI.2, http://www.barnesreview.org/vladimir-putin-russias-deliverer-by-matthew-raphael-johnson-phd-p-681.html?cPath=89_124, posted n.d., accessed 28 April 2015

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