In China, they would have been shot for it, and we have these people to teach others life
From: Information Agency Novorossiya, 23 December 2015, 02:23, Interview with Sergey Glazyev
(Click to enlarge) Sergey Glazyev
*) look for in my dictionary Kassandary -> Yandexiana
– “WELL-KNOWN ECONOMIST, ACADEMICIAN OF THE RUSSIAN ACADEMY OF SCIENCES ON HOW THE EXCHANGE MAKES MONEY ON THE EXCHANGE RATE AND WHY TURKEY IS TRYING TO ISOLATE RUSSIA AND NATO
Only cheap loans and real sovereignty in the monetary system of Russia is capable to put our economy on a trajectory of growth above 8% per year, according to renowned economist Sergei Glazyev. In an interview with “BUSINESS Online” (given 9 December) Glazyev told why the system liberals are sabotaging Vladimir Putin’s “May decrees”, which prevents the stabilization of the ruble and Ukraine to get out from under American occupation. In addition, he explained why the Turkish military are acting against the interests of their country.
“THIS IS THE THIRD WAVE OF DESTRUCTION OF HIGH-TECH CORE OF THE RUSSIAN ECONOMY”
— Sergey, today all concerned about the state of our economy. Recently, the Minister Alexei Ulyukayev explained to us that the economic decline in Russia amounted to 3.7 percent, and the decline of investment is less than the government expected. That is, the situation is complicated, but not critical. Do you agree with this assessment?
— The state of The economy has to be analyzed on the basis of the reproductive process that are alien to our monetarists, on the economy they are seen as a “black box”. And if you look at a reproduction, we will see that the man created by the monetary authorities, the crisis has struck first of all by engineering the core of the economy that provides technological reproduction. Here the fall in the double-digits. In the high-tech sector for many industries, the production decline from 12 to 50 percent. And we must understand that this is the third wave of destruction of the Russian high-tech core of the economy, and the consequences of this third wave of destruction could be catastrophic in the sense of ultimate loss of self-reproduction technological base. She is now on 60 percent dependent on imports. And if we policy due to prohibitively high interest rates, the chaotic fluctuations of the ruble, which make it impossible for any investment, and contraction of fiscal support will lose the remnants of the scientific and technical potential, about any independent development in our country will not have to say. We are now barely visible in the scientific and technological space, but still have the opportunity to recover research and production capacities in critical for the reproduction of economic sectors, including the oil and gas sector, the sector of consumer goods, agro-industrial complex. And to maintain opportunities for self-development.
Unfortunately, our technological degradation occurs on the background of the enormous technological rise in the West and the East. World is moving by leaps and bounds to new technological way. Complex nano-and bio-engineering, information and communication technologies is increasing at a rate of 35 percent per year. And although we were leaders 20 years ago — we first set up the LEDs, and stem cells, and nano fabrics, today we are lagging behind tremendously. Americans are already producing 7 billion LEDs per year, and as we were at the level of experimental development, several thousand of experienced units, and left.
With this macroeconomic policy, our technological gap becomes irreversible and catastrophic. What is done by our Central Bank, the Ministry of Finance and the Ministry of economy, is contrary. to international practice at the present stage. Don’t know what they have in mind the model of market equilibrium, but the entire world in the last 8 years conducting monetary and industrial policies, literally pumping the economy with credit resources in order to stimulate investment and innovative activity. The fact that the transition to new technological way is a huge investment risks. Private business independently, this transition cannot do. If in the past the state helped to move to a new technological order through an arms race (the militarization of outer space in the 70-ies of the last century, or the militarization of Europe and America on previous structural transition), but now due to the congestion of the budgets of the tasks of socio-economic development of Western and Eastern countries went the way of credit management as a vital tool of economic restructuring.
And although our monetarists understand by money, gold coins and not have the slightest idea about the role of credit in the economy, both in Europe and in America, and in Japan, and in China, and in Korea the creation of cheap credit resources and management mechanisms of transferring these resources to the innovative sectors of the economy to support investment activity is the main direction of macroeconomic policy. For example, in the U.S., after the financial crisis the money supply has increased four times, Japan twice, in England — more than four times that in China the increase is even more rapid. This is a consequence of the fact that the monetary authorities of the advanced countries use the lending to the economy, cheap and varied as the main tool to support the transition to a new technological order and a new Kondratieff wave of growth. And as you can see, these countries are growing, and we fall, and this is due to the incompetence of our monetary authorities and the mad blind implementation of the recommendations of the IMF, for which the issues of economic growth in Russia do not have any value.
“IF OUR PSEUDO-LIBERALS HAVE GOVERNED GERMANY AFTER THE WAR, SHE WOULD STILL LAY IN RUINS”“
– “— Many are familiar with the abstract “On urgent measures to strengthen the economic security of Russia and the withdrawal of the Russian economy on a trajectory of rapid development”. Are you suggesting there are mechanisms targeted lending. However, your opponents, even non-neoliberal fundamentalists, they say that it will be difficult to monitor money that goes through such a mechanism. They say, or they are just going to sit in banks for speculation or entrepreneurs will come up with some projects to receive these funds, and then it will be found that those projects are not, and we have no money. As everything is under control?
— You know, I was very amused by our liberals in power, which all are judged. If you are corrupt, if you can’t refrain from stealing, why do you think all around the same? They always tend to sit on public institutions, state corporations, ministries. And the first thing they do is kill any economic planning, goal setting and responsibility. They’ve completely blurred the system of state responsibility in government. If you’re a real liberal, then go into private business, do them at your own risk you have savings, build your firm and help her grow into a successful Corporation. No, we should enter the government, to ruin them and teach them to everybody’s life.
These Worthless statements. They are based, first, on understanding the patterns of modern economic development, and secondly, on the sense of irresponsibility and impunity in the management of its enormous resources, which are entrusted by the state. This is just a simple sabotage of the directives of the President, which requires Executive measures for the implementation of the may decree of 2012 on long-term state economic policy. Why do you need to raise investment at least one and a half times, to set the economy on a growth of at least 8 percent a year. And other ways of advancing economic lifting in addition to targeted credit issue does not exist.
If our pseudo-liberals and monetarists ruled Germany after the war, she would still lay in ruins, they would have waited until the people from 60 brands will accumulate 6 million. Clearly, this would never have happened. So in Germany, France and Italy you can carry targeted monetary policy, in Japan it’s just a rule of money management in the framework of public-private partnerships with low interest rates and issue long-term credit resources. In America, such as coping with monetary base, which increased by four times. And we as Papuan nothing can be trusted, we offer to live in the economy without credit! So think of our liberals, or rather pseudoliberal because they do not know how to do.
— But they remember all those stories with inefficient use of state funds in state programs and state corporations.
But the question was, where did they move the money? They sit 20 years in government and 20 years talk about corruption, about the rule of law, entrepreneurial climate. Power was fully within 20 years, except during the Primakov government, which could pull the economy out of crisis for 9 months, to achieve 9-percent rise of industry and decline of inflation by implementing approximately of the range of measures that we now propose to use.
So it’s not the lack of mechanisms and people. How to protect the state from theft, know of any banker. What is to control targeted use of funds at origination of the loan, known by any employee of any commercial Bank. You just need the desire to do it and the accountability mechanism. Stole, then they should be responsible. Various countries use different mechanisms of accountability. For example, manipulation of the exchange rate, which in the eyes of the whole country occur: the exchange within one year became the largest center of generating profits in our economic system, the income there is over 80 % . All stockbrokers and brokers know that the exchange rate is manipulated. All know who is manipulating. For these things in the US would give life and not one in England — fines in the tens of billions of pounds in China — would have been shot. And these people dare to preach all other life.
– The liberals themselves say that needs some structural reform. That is, and so everything is based on liberal rules, but they need even greater liberalization? Could it be that instead of your proposed mobilization model on the other hand we get a “perestroika-2” and a new wave of liberalization?
I don’t like the word “mobilization model”, but also do not like the word “liberalization”. As this implies each his own. Those who call themselves liberals, have created a mechanism purely administrative corruption economic governance, when each commercial Bank is sitting Commissioner and in the absence of clear regulatory documents decides what operation to skip and which not to miss. In random decisions, which banks to bankrupt, and to whom to give a loan at half a percent per annum, although it is nowhere provided. That is, these pseudoliberal arranged absolutely the subjective mode of economic management — as they want, and control. Already trillions of rubles from the real sector go in speculative, in the absence of available credit are crumbling industrial corporations, and some banks are getting tens and hundreds of billions of rubles under half a percent per annum. Is that a liberal Board? This is a subjective disorder, a chaos in which lovers of fish in troubled water feel good. This is absurd, they are not liberals.
What we offer… I would not say that this is the mobilization model. This model is based on the understanding of patterns of modern economic development, mechanisms for strict accountability with respect to resources, control over target use of credits. A mechanism that combines strategic planning and market organization. Public-private partnerships, but not on the principle of “friend or foe”, but on the principle — if you are ready to work on the development of the economy, to receive loans and a stable macroeconomic environment.
“WE WERE VERY CLOSE TO THE ROUBLE BECAME RESERVE CURRENCY OF THE EEU”
— As the current crisis of the Russian economy affect the process of Eurasian integration?
— Russia is 80 percent of the economic potential of the EEU, respectively, the state of the entire Eurasian Union critically depends on the state of our economy. Need stabilization. The extreme volatility of the ruble exchange rate, it is unexpected for the partners of the collapse caused enormous damage to Eurasian integration, in ruble now, do not believe, it will take 10 – 15 years in order to restore confidence in the ruble. We were very close to the rouble became reserve currency of the Eurasian economic Union. In Belarus the rouble is already used as a reserve currency.
Maybe if the monetary policy of our authorities will be more effective and reasonable, will be able to convince our partners to return to rouble system of calculations before, in three or four years, but this requires much more skilled work than I do now. Need to invite in the integration process, the Central banks of the countries while they stood a little apart, to form a General financial-monetary space and to protect it from attempts of destabilization from the outside. For example, the Russian financial market is now three-quarters controlled by foreign speculators, the share of non-residents ranges from two thirds to 90 per cent in different segments. Until our financial market is so dependent on external threats, it is difficult to count on stability. This is one side. The second side is a common development strategy. When we formed the Eurasian economic Union, we believed that the percentage of the total market in the integration effect will be one-third and two-thirds is a common development strategy in the framework of the General integration space. Agree, big difference whether you are creating this space for your own competitive goods, or it serves as a sales platform for European, Chinese and other imported goods. Therefore, the total development strategy gives two-thirds of the effect, which we evaluate on the turn until 2030 as plus 6 per cent of GDP, and in absolute terms about a trillion dollars.
— What are the prospects of transition to settlements in national currencies? This idea has repeatedly been expressed by the leadership of EEU member countries, but something is not implemented.
— The main task is the stabilization of the ruble. If the rate is unstable, there would be few people willing to trade in rubles. So the first and last condition for the creation of common money market, where we worked in national currencies, the ruble and of course effect of Russia’s economic potential would be a reserve currency is stability of the ruble.
— How do you assess the economic situation in the Donbass? How generally in this region, the LC and the DNI can operate the economy, existing actually in combat?
— The problem is not that the economy there lives in the face of constant military threats. The key problem is that it’s impossible for the economy to function normally in the absence of a system of state regulation. The Ukrainian system of state regulation does not work there, and its system has not been created. In conditions when it is not operating normally custom, no system of property rights protection, no institutions of state regulation, there is anarchy. And I think that was made a big mistake in the beginning, when the formation of the system institutions was deferred pending a political settlement of the conflict. As we see, the Ukrainian Nazis are not going to retreat from their aggressive plans, they want in whatever was to take over the region, a political solution is always being delayed, and the economy there for two years functioned without laws, without government institutions. Any complex activity in such conditions is impossible.
Donbass is not only coal. The coal in these conditions you can still get. Donbass is including advanced engineering, the production of a large number of technically sophisticated products, goods for industrial cooperation. To produce, you need to import components. The market of Donbass small for such goods, export outside. Need customs, customs clearance, certificate of origin, technical regulations. For this to work these institutions of government regulation of the economy. The delay in the establishment of these institutions was the cause of severe the crisis in the Donbass, which has always fed himself, which gave the lion’s share of exports and was the main engine of economic growth in tsarist Russia and in the Soviet Union, in the once-friendly Ukrainian Republic. And now she is living on humanitarian aid. Because it is not created by these institutions.
– But how can we solve this question if a political settlement is really not yet in sight?
— No objective difficulties to create in LNR and DNR separately or in conjunction with regulation of the economy. In the Donbas are very qualified and competent people. The region gave our country a whole galaxy, hundreds of prominent public leaders. There has never been a problem with senior staff, with experts who for several months could create and their customs, and technical regulation system, and the state Bank and the Finance Ministry, and tax service. Externally, Yes, the Republic depend on them. Including from us. Unfortunately, this an intermediate position between the Ukrainian jurisdiction and independence has created a vacuum of uncertainty, and the longer it continues, the deeper falls and degrades the economy there. We need to put an end to this issue. This is either an independent territory, which has its own system of institutions of state regulation, or is a self governing territory in the Ukrainian jurisdiction, but having a completely independent Kiev political power and power structures on the principle of broad autonomy.
“UKRAINE IS NOT A STATE BUT AN OCCUPIED TERRITORY”
— And what is the future of Ukraine, she will live on external loans, the IMF money? Whether to wait for the collapse of the Ukrainian economy in connection with the retaliatory measures of Russia on the entry into force of the economic part of the Association with the EU?
— Let speak frankly. Ukraine today is not a country, it is not a state, but an occupied territory. There’s even no Constitution. It was canceled last amended by Yanukovych, and the new and not adopted. In Ukraine American power, and decision-making center is the us Embassy and Washington, as we have seen in the recent visit of Biden, who came as the führer on their territory. The entire Ukrainian government is formed in staffing against the Americans and the Ministers, and lists of political parties, and political leaders, all agreed with the American Ambassador and the state Department. The SSU essentially is a variation of the Gestapo.
The last historical example of life in the Ukraine under the occupation of Nazi occupation. There too were the burgomasters, was local government, the police, but it was occupied territory. Nobody considered it as an independent state, for the third Reich it was a resource colony. USA needs Ukraine as a springboard to weaken Russia for aggression against Russia. The Americans use their power to turn the Ukrainian people into cannon fodder against the Russians. And hatred of Russia, Russophobia, the cultivation of Nazism in the most extreme and archaic manifestations is the goal of the American occupation administration. Therefore, there is no legitimate President, no government, no Parliament. This is a puppet pseudoplastic structures that conduct the wrong policy, which is necessary for the Ukrainian people, and absolutely not interested in development of Ukraine, but simply following orders from Washington.
If we talk legally, after a violent illegal coup and the imposition of Ukraine-EU Association, the country has lost sovereignty. If we are talking about the economy, Ukraine is part of EU jurisdiction. In the framework of the Association agreement, it should unquestioningly follow the directives of the EU trade policy, customs and financial regulations. In fact, not being a full member of the EU, it has become a colony of Brussels, which has no possibility to influence the normative European documents, but must strictly comply.
Therefore, the current Ukrainian government has nothing to do with the national interests of Ukraine and will be in addition to disaster, humanitarian, economic and, unfortunately, most likely, soon and man-made. The latter follows from the fact that as an American company “Westinghouse” trying to use Ukraine NPP for the marketing of their nuclear fuel the risk of a repeat of Chernobyl is now South Ukraine, where dozens of accidents have occurred with U.S. TVEL. This catastrophe, which is developing before our eyes, and it will be deeper and deeper, while Ukraine remains occupied territory.
— Can we assume that economic contradictions and problems lead to the downfall of the current regime in Kiev?
— You know, the Nazi regime quite resistant to economic difficulties. First, it is repressive. In Ukraine today, tens of thousands of repressed political prisoners — people who raise their voice, try though as that to doubt the legitimacy of the Kiev authorities, immediately subjected to repression, imprisonment, torture, harassment and even murder. Circle of the terrorist organization operating under the guise of natsbatalony*). In Ukraine the Nazi government combined with chaos and terror. And those people who create all this chaos and terror, feel great. They Rob, steal property, appropriating assets. Full of iniquity. And people just running. The only possibility of resistance to this regime for a person who is not ready to risk their lives to leave. We see millions of refugees from us, some goes to Europe. And to expect that this fascist regime will collapse by itself despite the fact that the US supported him, I would not. In Georgia, once was the same occupying American regime. They fed power structures, and people in poverty were without work, but there was nothing I could do.
— But in Georgia the situation has improved?
But the price was the loss of territorial integrity. Ukraine, too, has lost territorial integrity. And the process of disintegration will only grow. This mode tries to keep the whole country under severe pressure, but the stronger it is, the more people wish to secede from this monster Nazi and American occupation authorities.
Ukraine has two options for the future. This federalization or even Confederation with the refusal of the armed forces, with the abandonment of repressive bodies on the example of Bosnia and Herzegovina, but under external control, for example, joint EU-Russia, and the departure of the American occupying authorities. And after the Tribunal, the trial of criminals that destroyed tens of thousands of people in Ukraine. After this you can improvement is a Confederate state with broad powers of regions without repressive Central authority. The other option is a collapse.
Much depends on the position of the EU. The American occupation in Ukraine rests largely on the international recognition of the legitimacy of events. And in this recognition of the key role played by Europe. If she’ll get over it, if you think that only 70 years ago we finished off the Nazis, who occupied the whole of Europe, and shudder from the horror that is due to reincarnation of fascism in Ukraine, and will remember also how very large was the role of American capital in the formation of the military-economic machine of Hitler, then there may come a reinterpretation of the events in Ukraine from the European public opinion.
— Do you think that the Europeans can break the current stereotypes about Russia and Ukraine?
— The situation is changing, as you can see, for example, in France, in England. Le Pen is considered right. In England, for example, the left gaining weight, and in the labor party coup. It is now important in Europe not which party is the name of today’s changing political landscape. And the fact that come honest people, if you’re right, the right, if the left, the left. In Europe, politicians have completely lost the person that left, that right. And the Europeans are tired of endless lies, they want politicians who say what they think and doing what you promise.
“THE TURKISH MILITARY USED TO PROVOKE CONFLICT WITH RUSSIA NATO”
— We are now officially a belligerent country. And not the fact that Syria is our last front. The situation with Turkey shows how everything is unstable and unpredictable. Do these circumstances a role in the choice of economic model? Reinforce a choice in favor of national-oriented strategies, or Vice versa, as some believe, “war will write off” when a country is at war, not to problems in the economy?
— It is impossible to conduct a sovereign foreign policy without economic sovereignty. Our sovereign foreign policy today has a very weak economic base, because the financial system is entirely dependent on outside influence. Having a completely open monetary and financial system, where financial market running the show non-residents, we are extremely vulnerable to American sanctions, although we are a donor country, we give to the outside world by 100 billion dollars a year. We shouldn’t have to suffer external sanctions in General, when balanced monetary policy. We have enough sources of income for self development. But because of this colonial dependence on americanocentric financial system, on the periphery which we find ourselves, our financial market depends entirely on the sentiment of foreign speculators. They, in turn, are manipulated from Washington is quite understandable political structures. Therefore, keeping such vulnerability to monetary and financial area, to conduct a sovereign foreign policy is very dangerous, may not be enough resources.
If we want to apply the policies and to defend the world in its interests, we must ensure the economic sovereignty, to ensure the independence of our monetary and financial systems from speculative attacks and attempts to destroy it from the outside. And destruction before our eyes — nowhere in the world national currency does not jump so as the ruble, although the ruble is the most secured currency in the world, never feel so at ease speculators, nowhere is this manipulation of its own currency as we do. And with such chaos in this field to conduct foreign policy on independence and defending national interests is extremely difficult. It is necessary to reinforce the policy of the President the independence of the monetary and financial system.
– Tatarstan and Turkey have significant mutual economic relations is investments, and joint ventures. What to do business? Economic relations with Turkey will be completely destroyed or restored?
— It is necessary to look at the root. Turkey is not an independent country, is a NATO country aspiring to the EU. It very much depends on Washington. And what do the Turkish armed forces, is being manipulated by the US. And as if Erdogan did not represent an independent President, Turkey is used in anti-Russian campaign. We should bear this in mind. As long as we allow the Americans to wage hybrid war against us and put the world on the brink of world war II, all the satellites will act according to their instructions. Illusions can not be here. We, unfortunately, had the same illusion about Ukraine, which is now occupied by the Americans. And the actions of the Turkish military show that they are not acting in the interests of Turkey, and certainly not in the interests of the Turkish business. That is, Turkey today is losing a lot because of this monstrous provocation, but the Turkish military today are used to provoke conflict between Russia and NATO. Therefore, we must approach the work with Turkey carefully and to understand the alignment of forces.
— How do you feel about the predictions about the recovery from the crisis by 2019 for Russia, which will entail all of the EAEU?
— All depends on our macroeconomic policy. While the policy of our Central Bank we do not see any hope, they pull us, on the contrary, back in 90-ies.
— What can we expect entrepreneurs next year? Can the economy be catastrophic?
— Wait for catastrophe is no need to work. But will have to rely mainly on their strength.