The sanctions work. Head of the Russian Sberbank rebels against Putin


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Article by: Andrey Kolesnikov

At the Russia Calling Forum, the head of Sberbank violated the strange etiquette pertaining to the current (Russian) elite, which is liquidating the consciences of Putin’s economic policy, but shies away from speaking about the reasons for such policies.

The chairman of VTB Andrey Kostin looked like a bronze monument to himself and methodically played with his pen, Central Bank chairman Elvira Nabiullina smiled shyly, Finance Minister Anton Siluanov turned to stone. The soundtrack to this scene at the forum with the ironic name Russia Calling was provided by Sberbank chairman German Gref, who spoke the truth from the Crowne Plaza booth. For ten entire minutes.

He essentially said everything the esteemed leaders in economics knew without him, but were afraid of saying out loud. In some sense he violated the certain strange etiquette for the current elite, which is fighting with all its might to liquidate the consequences of the economic policies on part of the Russian President and his state-capital inner circle, but does not have the confidence to speak about the reasons for such policies, their contents, nor their consequences.

Gref unveiled the root problem of the regime: money. Money at all costs. To the extent of introducing new taxes on small businesses, which, as the former Minister for Economic Development noted, is near death.

And as soon as business started lifting up its head, they decided to take from it.

Just to buy security and mass loyalty for themselves, the government: to give money to the man with the gun and the ‘swamp.’ Not the one protesting in squares but the one that works on inertia, if it does at all, which the government does not allow to fall below the poverty line with their payments – otherwise the government will lose the skeleton of its electorate: the almost declassified individual which some researchers humorously call ‘the below the middle class.’ And also to give money to those who suffered from the sanctions and can only get surplus revenues instead of hyper-surplus revenues as usual from their position within the court. Like Alkhen, they have their own ‘orphans,’ the citizens of the Crimean peninsula. The rest of the Russian population are also ‘orphans,’ but second-rate ones, compared to the Crimeans. It looks like the Chinese should care for those living in Siberia and in the Far East.

Speaking of which, Gref also made an example of the Chinese. He praised their inclination towards innovation, their market openness. In this sense, our government thinks in vain that the dividing line lies between China and Russia on one side and the U.S. on the other. In the economic sense everything is totally different: China and the U.S. on one side and Russia on the other.

When criticizing Russia’s isolation, especially in regard to import and loans, the head of the bank which had been subject to sanctions, did not tear into the West, which void its bank of capital, but his government. Thus noting that source of all evil without naming it directly.

And said heartily: “You can’t violate the laws. The laws of economics.”

In this light Gref mentioned Yegor Gaydar and his work The Death of an Empire, a detailed analysis of how the Soviet Union degraded and died economically. And, essentially, directly compared the current situation with the one in the late Soviet era… Kostin still played with his pen nervously, Nabilullina smiled, Siluaniov didn’t…

Speaking of which, Gaydar also wrote about laws of economics. In another work, which is very educational, Economic and Hierarchical Structures. It was written when the discussion of the design of reform slowly transformed into the search for the methods to execute life-support measures: in 1987-1989. The following words addressed to the government can be found within: “While it was impossible to put an end to economic autarchy immediately for objective reasons…, it is necessary to act in accordance with the laws of the market and not in spite of them.”

“I don’t want to stand in line at the old Soviet Sberbank,” said Gref. A figure of speech. Another smile is allowed. But it is also the conclusion that the current economic policy is turned to face the past instead of the future.

The person whose name is used for the unexecuted ambitious plan for second-wave reform, Gref’s program of 2000, also mentioned another thing: the fact that the system of government had reached the limit of its efficiency. There is no result whatever they do. The problems cannot be solved even if they are flooded with money. However, what is being solved are private issues of redistribution coalitions that are sucking from the state currents.

Gref’s words were permeated by tiredness and resentment.

He did not directly say the King was naked. But he hinted at this circumstance.

The rest pretended it was a comedic performance, not a satirical one, with borderline jokes about Vasiliy Illych. And Vladimir Putin spoke after Gref, for whom the same governmental suicidal logic once more became grounds for optimism, to ‘concentrate resources.’ The resources that don’t exist. And mobilization searches for which lead directly to the very same line to the Soviet Sberbank.

It is good to mention a quote from the Death of the Empire Gref noted. The book ends with the following words: “Russia has a market economy, which is incomparably more flexible than the socialist one. It is able to easier adapt to the changes in the global economic conjuncture. Its logic does assume that all the responsibility for changes in economic life lies on the existing government. But this does not mean that the risks tied to the loss of the ability to adapt, the growth of the country’s dependence on the parameters which are not under government control, have disappeared. This is the situation in which caution, a sober attitude towards the threats the country may face is an integral part of responsible policies.”

And Gref? What about Gref? He was too emotional. His nerves gave out – his business is subject to sanctions.

He made a funny speech. It’s okay. The audience laughed… It looks like there will be no conclusions.

Translated by: Mariya Shcherbinina


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  1. Avatar Rods says:

    Sanctions are all well and good in the long term as Russia has about 12 months of currency reserves with a weak oil price and 18 months to 2 years with a stronger one.

    However, this does not help Ukraine right now against Russian aggression. Now the West providing weapons to Ukraine on top of sanctions that would make a huge short term difference, while sanctions are given time to really bite.

    I can’t understand where Putin is going economically with Russia, however what is quite apparent is that the KGB does not provide any training in economics or any insight into how business works, including managing supplier-customer relationships! Soviet Russia’s economic failings of the past aren’t the solutions for the future which seems to be where Putin is heading. Where he is going the ‘arms before butter’ route again, it wasn’t a lack of military resources that sunk the Soviet Union, but the lack of will to use them against their own population to keep the Communist Party in power. Lets hope history repeats itself, soon.

    His substitute for a successful economy, nationalism, unfortunately makes Putin a very dangerous dictator in the short term as he is going to need regular popularity ‘top ups’, which will include more ‘military adventures’ which he can’t afford to lose and survive.

    1. Avatar LorCanada says:

      I dread to think Putin’s future plans are more about war and expansionism than about helping the ordinary Russians with public and health services to improve their lot. He is even ducking out of his responsibilities to the Russian soldiers killed in Ukraine, denying their existence there and thus skirting any monetary compensation to the soldier’s family. How low can Putin sink?

  2. Avatar Mat says:

    I have no idea what is going on in this article.