255 years of VEO Russia: the world at a crossroads

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Today the word from the editor will be extremely positive. I am sure that you will not only allow this but you will also fully support this mood, because, as you can see, the world is tired of worrying. It is for a reason that UNICEF, the United Nations Children’s Emergency Fund, initiated a worldwide flash mob, “How are you, really?”

          But we will not dwell on this in detail. We’ve had some truly inspirational events and developments.

I am glad to remind you that this year the oldest public organization in our country, the Free Economic Society of Russia, celebrates its 255th anniversary; its founding was fully supported by Catherine II. The Great Empress had great plans for the Society, and many of them were successfully implemented.

          This year, all of the Society’s major events have been (and will continue to be) dedicated to this glorious date. In this issue we recall the milestones in the history of the VEO, originally the Imperial, and now the Russian Free Economic Society.

Despite all sorts of pandemic waves – the second, the third or whatever they may be, this year we will be awarding our most prestigious prizes: «Economist of the Year» and «Economic Book of the Year», see the magazine for the list of nominees and the short list. Moreover, we did not refuse to hold the «All-Russian Economic Meeting» on November 11, the Day of the Economist – i.e. the professional holiday of Russian economists celebrated on the date of the establishment of the VEO. In this way the Russian government five years ago acknowledged the VEO’s accomplishments for the good of the country.

          We have been and remain optimists.

There are positive signals from economic forecasters as well, which inspire more optimism, not only from government officials, and not only from Russia. The Free Economy has collected some recent data. The Ministry of Economic Development believes the decline will be 3.9% in 2020, and the GDP will start to grow by 3.3% as early as 2021 and by the end of the third quarter will reach the pre-crisis level of 2019. Growth will continue in 2022, by 3.4%. Let me remind you that in May and July the Ministry of Economic Development predicted a fall in the GDP by 8.9 and 6.4 percent, respectively.
The Central Bank predicted a 4.5-5.5% recession in the summer and no growth in 2021. Now it calls its numbers «overly pessimistic.» Our colleague, a regular participant in the main events at the House of Economist, Chief Economist of VEB of the Russian Federation Andrey Klepach, also says the reduction in GDP could be as low as 4% thanks to the measures taken by the government, without which it would be approximately 5.5 — 6%.
The international rating agency Fitch has improved its forecast reducing the rollback of the Russian economy from 5.8 to 4.9%. Note that it is significantly better than the forecast for most Western countries. 

We see other positive signals: no full quarantine regime is being introduced, the national projects are being reformatted in connection with the current situation — the country’s scientific and expert community has been involved in this work and the subject has been most vigorously discussed at the VEO of Russia, see this issue of the  magazine for more information.

Importantly, a major role is being assigned to the development of industry; it means that in Russia and all over the world both members of the establishment and representatives of mainstream science — seem to have finally become realized that the neoliberal model with its dominance of financial capital divorced from production and uncontrolled and unplanned market are not able to address and solve all socio-economic problems. On the other hand, everything depends on the economic policy now: whether we will return to the old strategy or develop a new one which corresponds to the country’s goals. This is also important in the international context, as was mentioned at the presentation of the UNCTAD Trade and Development Report presented in Moscow before the VEO of Russia and the International Union of Economists by Igor Paunovich, Leading Economist of the UN Conference on Trade and Development.

So, it will not be an exaggeration to state that we are at a crossroads: whether we’ll be able to ensure positive sustainable development and build a highly civilized society comfortable for people will depend on which direction we will choose. Success depends on many factors, including the chosen ideology of development. To solve this problem, it is necessary to consolidate the efforts of all social strata. And it is fitting that solidarism has been enshrined in the recent amendments to the Constitution – it was the last, fundamental nail pounded into the ideology of «class struggle» and the conflictogenic ideas of social development.

           A benevolent and safe future can only be attained through joint effort.

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