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For a New Russia : New Economic Restructuration

Russia is the richest country in the world … but has a poor population. Any team of future reformers will inevitably face a political demand for a pragmatic economic policy, an orientation towards domestic problems and a rejection of geopolitical revanchism. From my point of view, due to the ruinous policy of Russian President Vladimir Putin, Russia will need 15-20 years to restore the economy and social sphere, as well as to grow strong political institutions that would no longer allow one person to usurp power in the country.

Today we will touch upon the general lines of economic reforms. Fortunately, there are no special secrets here, and recipes for launching rapid growth are known to any average economist. I would divide the reforms into three main parts - related to the institutions of power, foreign policy and the demonopolization of the Russian economy.

First of all, economic development is impossible without clear guarantees of property rights. Vladimir Putin in the early 2000s gradually built the judiciary into his vertical of power. Judicial reform is called upon to form the institution of an independent court in Russia. Without it, long-term investments and long-term development are impossible in Russia. Significant lustration of the judiciary and limitation of the rights of chairmen of courts is necessary. Many judges themselves will have to be judged, but the main task is to remove the court from subordination to the security forces or the presidential power. Also critical is the institution of an independent Central Bank, whose task should include inflation control and banking supervision. The Central Bank should not be accountable to the President - here it is appropriate to borrow Western experience and entrust the formation of its leadership to the parliament.

Second, Russia desperately needs a peaceful foreign policy and openness to Western investment and technology. The Russian economy is a promised land for Western capital, which can make much more profit there than, say, in Europe or North America. Ensuring friendly relations with the European Union and partnership with the United States is the most important economic task. Important points would be the implementation of a visa-free regime with Europe, which would make it possible to attract qualified personnel to Russia.

Thirdly, the development of the economy is hampered by monopolization and the excessive presence of the state. Especially, of course, this applies to the oil and gas and banking sectors - Gazprom, Rosneft, Transneft, Sberbank, VTB, etc. Monopoly in any area leads to a decrease in efficiency and an increase in corruption, a drop in the quality of work. And if Sberbank is a kind of exception - thanks to the professionalism of the team - then the rest of the companies from the list serve the interests of contractors and oligarchs close to Putin. I would suggest partial privatization of the state's stake in these companies and the transfer of share portfolios to the Pension Fund.

Of course, this article only outlines the reforms Russia needs. For example, one of the most important points would be the abolition of the 2018 pension reform, which will be supported by the vast majority of Russian citizens. We can also mention budgetary federalism, which would be designed to redirect budgetary flows to the regions. However, it is impossible to grasp the immensity of the task, and the list of reforms can be continued. They will require political will and a willingness to go all the way in their implementation. However, their success will undoubtedly lead to decades of powerful economic growth - what will later be called the Russian economic miracle. Russia will become a space for economic freedom and the scope of entrepreneurship. The opportunity to earn honestly will reveal fantastic prospects for our Fatherland, raise the incomes of citizens and allow us to rebuild a new country.

Russia will be free.

Article written by the Architect (economist)

Approved by Vladlen ZVEREV


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